By Bruce Bidgood
This is a follow-up to a series of recent articles in The Terrace Standard (on-line and in print) about the sale by the City of Terrace of its property at Kenney and Park to Coast to Coast holdings and the purchaser’s lack of subsequent development including.
The purpose of this letter is not to debate the likelihood of new units in the future but rather to examine how the City proceeded with the sale of the property so that we may learn to increase the likelihood that future strategic land transactions will actually translate into the housing desired by our elected leaders.
First, this is not an attack on our city council. There are some who will immediately dismiss the analysis of an unsuccessful mayoral candidate as nothing more than “sour grapes”.
Let me be clear, I was as much responsible for this unproductive land transaction as any current member of council.
In fact, both Dave Pernarowski and I were at the council table when the decisions were made. It also follows that those first-time councillors elected in 2014 (Michael Prevost and Sean Bujtas) are blameless in what I have come to view as a botched land development opportunity and the single most disappointing experience in my two terms as a city councillor.
Why a botched land development? The goal of council was clear – to get some affordable housing built immediately to address a housing crisis which even saw notoriously pro-free market advocate Dave Pernarowski petition rental owners not to be too greedy in their demands.
To date, six very expensive town house units have been constructed on this site with no affordable housing residences built and no concrete plans for construction on the horizon.
The proponent’s promise of 105 units of housing including 22 affordable units remains unfulfilled.
The developers appear to want to sit on the property until the market suits their profit ambitions.
Low income residents who would have occupied the promised 22 affordable housing units are still homeless.
What went wrong? Put simply, council failed to insist on a timeline for development as a condition of sale. This can be done.
The former City of Terrace lands manager insisted that such a clause be included in the sale of the airport industrial lands to Qinhuangdao, China.
If the purchaser fails to acquire development permits by an agreed upon date, the city has the right to purchase the land back at the original price regardless of market value.
This could have also been done with the Park and Kenney property.
Perhaps the offer of twice the asking price (an eventual purchase price of $950,000 versus an appraisal value of $450,000) had us all seeing stars. We did after all create a new half million dollar affordable housing fund with the surplus.
Maybe we thought our desire for immediate affordable housing was explicitly clear to administration who would ensure that a development time frame was included in any legal agreement drawn up.
Regardless of the reason, we didn’t insist on a timeline clause to get the affordable housing job done.
Should we have known? Quite frankly, council just never imagined that someone would pay nearly $1 million for a property in Terrace and then sit on it without developing the site.
We should, however, have learned from past about the necessity of an enforceable timeline.
When the city bought the Co-op property along Greig Ave. in 2005, council knew that it was acquiring land which was at least partially contaminated.
Clearly the seller was responsible for remediating this contamination and this responsibility was included in the sales agreement. Unfortunately, no concrete time line for this remediation was adopted.
So now, the seller continues with minimal remediation over decades and the contamination remains.
This is, at least in part, the reason why the property is still vacant to this day. Councillors from the day, including the current mayor, should have learned from this lesson.
You need to get a time line for development/remediation for all strategic land dealings.
Could this have been prevented? Yes, there were things we could have done differently at a number of key points in the process.
First, the administration could have provided council with information not only on price and number of units but also on proposed development time lines.
This would have permitted council the option to choose a bid for less money that provided guaranteed development dates. That would have been strategic decision making.
Second, council believed that our desire for immediate housing was understood. We could have made this explicit to administration with instructions to include a development clause in the sales agreement.
We missed an opportunity for visionary leadership to anticipate changes in the development market.
Finally, the Mayor who reviews and signs the final agreement could have refused to sign the document until it reflected not only the word but the spirit of council’s desire for immediate housing development. This was an opportunity missed for governance and procedural leadership.
What should we learn? We all need to learn some lessons from this fumbled land deal and other mishandled land transactions from the past like the purchase of the Co-op property.
First, city administrators must routinely provide counsel to mayor and council about the latest legal vehicles for ensuring timely development before final land deal decisions are made.
Second, councillors must demonstrate due diligence by insisting that provisions for timely development be included in all strategic city land dealings.
Third, you, the voters need to hold local elected officials accountable by insisting they answer three key questions:
1) Why this land purchase/sale (what is council trying to accomplish?)
2) How much (Is the value paid/received for land a fair market value) and finally,
3) When will the development happen. Don’t just get the deal signed. Get it dated!
Bruce Bidgood was a two-term City of Terrace councillor from 2008 to 2014 and ran unsuccessfully for the position of mayor in 2014.
The Terrace Standard articles “Housing efforts stymies city, says Terrace mayor” (June 22, 2015), and “Housing development for Terrace remains in limbo” (Jan. 7, 2016) offer more detail.