Canadian Tire Deal Delayed One Year If Retailer Pays $200K Deposit

If Canadian Tire wants to continue with their new proposed retail development on Thatcher Drive East they had better be ready to part with some cold hard cash.

In a 4 – 3 vote Council approved delaying the deal for one year but there is a catch – they need to pay a $200,000 non-refundable deposit to do so.

At Monday evening's Council media – where local media were not allowed to attend due to COVID – 19 pandemic concerns – Council was told two and a half week’s ago the deal to build a new Canadian Tire on Thatcher Drive East was dead.

Despite Canadian Tire deciding to cancel the deal Mayor Fraser Tolmie said he had personally spoken to the retailer and the City was able to raise it from the dead.

“Due to the pandemic Covid – 19 Canadian Tire was reluctant to proceed and we were able to talk to them and look towards a year postponement of the project itself and we can say to our knowledge we are the only project that in Canada is being postponed as compared to being cancelled,” city manager Jim Puffalt said.

Canadian Tire in October 2016 announced they planned to build a major retail development on Thatcher Drive East on land occupied by the Moose Jaw Exhibition Company.

After renegotiating the original deal Canadian Tire made a deal to buy 11.95 acres of land for $3,172,725 including off-site levies.

SEE RELATED – Canadian Tire Deal Details

Puffalt said the new agreement would extend the deal for a year and once world economic conditions improved the project could proceed.

Mayor Tolmie explained to Council how he had helped resurrect the deal.

“I had received some paperwork on my desk with regards to Canadian Tire deciding to pull out of the program…I did reach out to Canadian Tire and asked them to reconsider. The amount of time we put into this project, the amount of time they put into this project…I put in a call and Canadian Tire had gone back to think about it and have come back,” he said.

“To be considered (to continue) the deal (by Canadian Tire) is certainly a win for the City of Moose Jaw.”

Despite the Mayor's glowing report others on Council expressed concerns.

The proposed location for the Canadian Tire retail development - MJ Independent File Photo

“I'm really struggling with this one,” said Councillor Scott McMann. “I don’t believe Canadian Tire has dealt with us in good faith.”

Issues McMann had with the deal was how long the process was taking and how Canadian Tire had acquired the property without it being on the open market first.

The City had met with Canadian Tire in May 2017 to get the project moving and the property had never been offered to the public, he said.

“Very little skin in the game from their end and potentially the $50,000 if that does come to pass…some of the conditions in there like right of first refusal are deemed fairly generous…they have had access to this property for four years and haven’t done anything with it.”

Councillor McMann said he had reservations about Canadian Tire's sincerity in the project.

“In my estimation they are just stringing us along further and further.”

Puffalt said that “up to two and a half weeks ago proved to proceed. Covid – 19 hit them as bad as most retailers.”

He said everything was good to go but “with the start of the pandemic bang it was done.”

Councillor Brian Swanson questioned whether or not Canadian Tire was truly interested in proceeding with the project due to the length of time it had taken

“This deal was approved the last Council meeting in October 2016 and last September the deal was renegotiated and the City got less money,” Swanson said. “If Canadian Tire had wanted to their building could have been open for the last two years.”

He said Canadian Tire was moving away from capital projects and re-focusing on on-line sales and not very interested in brick and mortar stores.

“If they had wanted to do it they would have done it. That we are the only project in Canada when they don’t have any skin in the game. I don't think it’s a tremendous accomplishment on the part of the City of Moose Jaw I think we have been kind of played on this.”

Councillor Swanson made an amendment the deal requiring Canadian Tire pay a $200,000 non-refundable deposit by May 15, 2020.

He felt without the restrictions the land leased to the Exhibition Grounds could have been sold years ago without the conditions Canadian Tire wants on 19 acres of land directly north of their project.

Mayor Tolmie said he did not doubt Canadian Tire was sincere in their desire to continue with the project and it was no recent phenomenon Canadian Tire was involved with on-line sales.

“They realize their clientele likes to go in and see the product they are selling and that is why thry have a lit if stores…they were very receptive we reached out to them…they are not coming back to us and saying we want a better deal what they are asking is they want the same deal,” he said.

“I think it sends a bad message to the community if you want to vote this motion down, the whole motion as it is.”

Councillor Heather Eby said she felt what was being proposed put the City in a bad position.

She spoke about the deal's history and his in 2016 how there was a major rush to complete a deal to get the project secured.

“I think we are getting in such a bad spot with this and I don’t know that it is a victory if we go ahead with this as we have had it presented earlier to us…Canadian Tire could come back to us in a year and say we are walking and we are at five years.”

Puffalt said some of the project delays could be attributed to the City and not just Canadian Tire.

“I believe Canadian Tire is sincere they were planning on coming before Covid – 19…In the economic conditions we are in I don't believe anybody is lining up to do (retail) projects.”

Puffalt said the Canadian Tire deal was better than nothing.

“What is lost by having a delay with a company that may be willing to proceed?”

Councillor Crystal Froese said she had hesitations with the project due to the time frame.

She felt the amendment requiring a non-refundable $200,000 deposit may be asking too much given the present economic climate.

Under the proposed extension Canadian Tire would not begin actual construction until 2022.

“I’m really torn because if we should not pass this what are the chances of selling property for this amount after the economic stress we have going on?”

In a 4 – 3 vote with Councillors Dawn Luhning, McMann, Eby and Swanson in favour the amendment to require Canadian Tire to pay a $200,000 non-refundable deposit was approved.

Mayor Tolmie said with the amendment he would do his best to get Canadian Tire to agree.

“I can’t make any promises but I will do my best on my part.”

In a unanimous vote Council approved the main motion extending the deal so long as the $200,000 deposit condition was met.