Committee Agrees To Approve Sale Of Their Share Of The Former Eaton's Store Property For $1

If Council gives the final approval this Monday night the sale of the City-owned portion of what is commonly known as the Timothy Eaton Centre - 510 Main Street North - as well as nine (9) parking spots to a local charity for a buck.

In their November 22nd Executive Committee meeting the committee decided to sell the assets to the Moose Jaw Non-Profit Housing Corporation (MJNPHC) for a dollar. MJNPHC was listed as a registered charity with the Canada Revenue Agency in 2017.

As part of the deal MJNPHC will also receive a five year property tax abatement as well as the City would reserve the right to have the first opportunity to re-purchase the property if it ever re-entered the market.

The City is selling the basement and main floor of the Timothy Eaton Centre (which houses the Moose Jaw and District Seniors Association as well as three for rent store front business spaces) to MJNPHC.

MJNPHC will retain majority ownership and de facto control and management of the two upper floors which are seniors housing units.

The building will be managed and maintained by the Moose Jaw Housing Authority.

Under the initial development agreement dating back to over 30 years ago the former Eaton’s Store was converted into a senior citizen (65 years of age or over) centre on the lower two floors and into affordable senior housing on the upper two floors.

The funding agreement between the federal, provincial and City governments has approximately 2.5 years until the portion of the agreement ensuring the building is used exclusively for seniors expires. The original funding agreement - between Ottawa, Regina and Moose Jaw - made the 35 year seniors use stipulation.

The building was divided into two separate condominiums with the upper two floors or 45.52 percent of the entire building now owned by MJNPHC and the bottom two floors or 54.48 percent owned by the City. The sale will leave MJNPHC owning the entire building.

Given that the City is not in the property management business and the property comprises just two condominiums the report stated the sale makes decision making easier.

“The City is not in the property management business and given the Condo Corporation has a unique setup as a two unit/two director board, it makes it challenging for both parties to operate together. Fortunately, this will now open a pathway for revisions to lease agreements that were not possible under the current situation,” the report to Executive Committee read.

The deal also affords the City the first right of refusal to buy the property back for 100 percent of the fair market value if MJNPHC ever decides to sell the property.

In a 6 - 1 vote, with Councillor Heather Eby the lone opponent, Executive Committee agreed to the sale.

In a response to questions from MJ Independent about the $1 price for the property and parking spaces and how The Cities Act would apply the City did not reply directly to the question but in an email stated the original agreement involving the funding agreement meant the Saskatchewan Housing Corporation (SHC) had to approve any sale.

“As per the City’s 1990 agreement with Saskatchewan Housing Corporation (SHC), SHC must approve any sale of the building, and it can only be sold to a non-profit organization with the same intent for the property as its current use,” the City responded by email.

Under The Cities Act sections Section 38.2 subsection 2 and Section 101.1 K the City can sell property for less than full market value but only if a Council has approved the policy.

The City did not respond to a question as to exactly when Council agreed to a policy to sell the property for below market value. Nor did the City respond to a question if the property had ever been listed for sale on the open market to get the best value or return for taxpayers.

It also needs to be remember that although Executive Committee is made up of all members of Council they are a committee of Council and not legally considered to be the Council.

Although no valuation is given MJ Independent was told by a knowledgeable insider - who we agreed to allow to remain anonymous - that the property is worth approximately $400,000.

The sale still requires Council’s approval this Monday evening and is part of the minutes of the November 22nd Executive Committee meeting.