With the local supply of serviced industrial land running out, the Town of Minto has agreed to more than double the sale price for such lots.
However, the new price is below the town’s asking price for some industrial land prior to 2007 and business and economic development manger Belinda Wick Graham said the town will remain competitive with other municipalities.
Between 2005 and 2007, Minto worked with Colliers International to market the municipally-owned land at prices ranging from $35,000 to $45,000 an acre, depending on the size of the parcels, states a report from Wick-Graham at the March 22 meeting.
In February 2007, the town discontinued the relationship with Colliers and lowered land prices to $15,000 per acre in an effort to be more competitive with neighbouring municipalities.
The report notes that in addition to the cost of the land, most purchasers in Palmerston had to import fill at their own cost to bring their site to grade and all of the purchasers paid full development charges in order to build on the property.
Wick-Graham pointed out considerable development has occurred in the town’s two industrial parks in recent years. The Harriston Industrial Park currently hosts nine businesses. The Palmerston park contains 12 businesses with two under development.
The Harriston park currently has just one 2.3-acre parcel of serviced industrial land available, which has a first right of refusal on it.
The Palmerston Industrial Park has a 14.2-acre serviced parcel remaining, a site included in the province’s Certified Sites Program (215 Minto Road).
Wick Graham explained considerable expense will be required to service new industrial land.
In 2017, a municipal class environmental assessment on the future expansion of the Harriston Industrial Park was completed. The cost to service an additional 11 acres is estimated at $625,000 or $56,818 per acre.
Pending budget approval 3.5 to four acres will be serviced on Noble Road in Palmerston at a cost of $300,000 in 2018. Triton Engineering has also started designing a sewer lift station to service the back lots in the Palmerston Industrial Park as well as future expansions. Construction of the sewer lift station is projected for 2019-20.
A survey of seven area municipalities indicated the average price per acre is $36,500.
“In looking at a hypothetical situation, which includes development charges, the average price for a two-acre parcel with a 10,000 sq.ft. building would be $108,650,” Wick-Graham explained.
“Removing Minto development charges from the scenario, the cost per acre would be $35,075. Comparators in Grey, Bruce and Perth Counties do not have county development charges and some don’t even have municipal development charges. When setting the Town of Minto price per acre this is a consideration.”
The report notes several area municipalities are also running low on serviced municipal land and are reviewing prices.
“Municipalities south of us are able to command a much higher price per acre due to the proximity to the 401, while others north of us tend to charge less because of their distance from the 401,” stated Wick-Graham.
At the new price of $35,000 per acre, she told council the town would still be subsidizing industrial land.
Previous servicing costs were approximately $43,000 per acre so at $15,000 per acre the town was subsidizing costs by about $28,000 per acre “in an effort to be competitive and spur on development, which has been successful.”
“If the price per acre was increased to $35,000/acre we would be subsidizing the lots by approximately $26,666/acre,” the report explains.
“We’re still going to be losing money at $45,000,” said councillor Ron Elliott.
“We’re still going to be giving a subsidy, only a little less,” Wick-Graham agreed.
Elliott said, “We’re going to have to get it out there that we’re still losing money and that and in order to be able to recover at least cost, in order to be able to do that work in our communities, we’ve got to have these kind of dollars … And you’re still getting cheap land.”
Councillor Dave Turton asked, “Up until now the $15,000 been pretty hard and fast. Do you think the $35,000 would be more negotiable?
“I think we ought to be careful … You know, it’s supply and demand. If you look at Wellington County in general we’re one of the few municipalities that still have municipally-owned employment lands.”
Bridge said he was confident “we’ll fill up that low hanging fruit pretty quickly because there’s no supply out there.”
Wick Graham noted nearby Listowel has no available serviced industrial lots left, though they are processing an additional 42 acres. “But their price is $45,000 and it will be going up,” she noted.
Council approved the report and agreed to raise the sale price of municipally serviced industrial land to $35,000 per acre.