This Woodstock city council policy make lots of sense
There are many great ways to attract new large-scale business to Woodstock, and I think Len Magyar, Brad Hammond and others at the development office have it right (led by a City Council passed initiative) – own a lot of the available industrial property yourself to hold down the cost of commercial land in and around the city.
Could you imagine how difficult it would be to lure a manufacturer to Woodstock if the cost of 1 acre was more in Woodstock than it was elsewhere on the 400 series of highways, perhaps London, K-W/Cambridge or even Strathroy?
Market value is sometimes defined as ‘how much someone is willing to pay for a property’? If that is the question, the answer would be to maintain price tags.
Other factors obviously exist as well – infrastructure and services, skilled employees, proximity to related employers, and location location location.
The reason I include this opinion is that the City has a policy of literally forcing developers to build on land they purchase within three years, or the City has the option to buy it back. It’s win-win actually as the City holds the land inventory controls, while a developer isn’t over-leveraged on land it has no use for at this time. The same developer could come back – if ready to stick a shovel in the ground – to re-purchase the property.
Here’s the Sentinel-Review story from the May 7 edition:
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Ron Thomson, Sentinel-Review
WOODSTOCK -
City council Thursday authorized staff to re-acquire the industrial lands from Conros Corporation. The city will purchase the lands at 90% of the original purchase price subject to any adjustments at time of closing
The lands encompass virtually all of the vacant lands in the Bysham Park Business Community. As a condition of sale the purchaser was required to build a minimum 300,000 square foot manufacturing facility on the subject lands within three years of the date of closing.
"Of course that did not happen," said development commissioner Len Magyar. "There were things that happened to delay their plans and in the end they looked more to be a developer and build buildings for lease and of course that never happened, as well."
With the condition not met and as a result of non-performance, the municipality is now in a position to reacquire the subject lands. Similar to the majority of Woodstock’s land sales the city reserves the right to buy lands back at 90% of the original purchase price for a period of 10 years in the event of non- performance.
Conros formally asked the city to proceed with buying the subject lands back as per the conditions of the original agreement.
"We’re now in a position where we can acquire the lands back," Magyar said. "The Conros group has asked us to acquire the lands back at this point in time to pay taxes on the property."
The city sold 49.5 acres of industrial land in the Bysham Park Business Community in March 2006 to Conros. At the time the sales agreement was approved by council, the negotiated price per acre on the subject lands was $34,500 per acre for a total sale of $1,675,545. The City of Woodstock will purchase the industrial lands back at $31,050 per acre.
The lands are fully serviced and will be brought back to market in short order. Buying these lands back will immediately address a current limitation of available small-scale industrial lots within the Woodstock market place, Magyar said.
"The good news is that if we take these lands back it will in very quick work give us an inventory of small industrial lots for sale," he said
To accommodate the buy back, council approved $1,500,000 in the 2012 capital budget from the industrial land reserve for this purchase. However, there is a shortfall in the industrial land reserve compared to the amount budgeted so the balance of funds will be withdrawn from the hydro reserve. This amount is estimated at about $340,000.
Council has also already approved $65,000 in the capital budget for cleaning up the subject lands so that they have some curbside appeal to potential purchasers.Bysham Park industrial lands are back in the hands of the City of Woodstock.
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