Not because the lots do not present a good value, but because of the current state of Alberta real estate.
That is what Cal Halasz and Royce Johnson of Cushman and Wakefield told councillors via video conference during their Dec. 1 meeting. Cushman and Wakefield is an Edmonton-based commercial real estate firm. It is also the firm the municipality chose to market its industrial park property.
The county bought the quarter section of land located at NE 27-59-3-W5, which is immediately south of the Northplex plant on Range Road 32, for $575,000 from the Kiel family in 2012 for the expressed purpose of creating an industrial park. The land is zoned direct control.
Currently, the park is in Phase 1 of its development plan for the 45-acre parcel in the northern portion of the property that encompasses six lots. In June 2018, the county announced that Royal Canadian Holdings purchased the first lot to build a medicinal marijuana facility. There has been no word from the company of when it plans to break ground on its nearly 50,000 square foot facility. In July 2019, during a public information session in Barrhead, chief executive officer Jake Burlet suggested that, if all things went well, they could be in production by the end of the year.
However, as Halasz said few things are going well in the province's commercial real estate market. That especially rings true in rural Alberta.
"We have gone through the listings in Grande Prairie, Boyle, Athabasca, Bonnyville, Calmar, Drayton Valley, Cold Lake, Lamont and the list goes on ... nothing is moving," he said.
That being the case, Halasz said there is some hope on the horizon, pointing to a report by the University of Calgary and the Transition Accelerator, a think-tank funded by multiple family foundations and governments, that states the Alberta's "industrial heartland" north of Edmonton the region could attract as much as $100 billion in investment and become a hydrogen-energy hub.
"There is also the A2A railway that is being developed, so there are positives," he said. "We are also seeing more activity in the Fort Saskatchewan/heartland area as far as leasing and getting set up for what is hopefully an economic upturn for the province."
A2A is a project by the Calgary-based Alaska-Alberta Railway Development Corp that seeks to join the existing North American rail network to that of Alaska.
Halasz said despite the overall lack of activity they have received about five informal inquires from companies about Kiel Industrial Park.
He added that the firm has also received interest in some of its Town of Barrhead properties such as the Champion Feed mill which closed in 2015, as well a portion of the municipality's "Schneider Lands" property.
Johnson noted that one of the interested parties for the old feedlot property is a national distributor.
"He likes Kiel, but it is cheaper to buy the [Champion Feed] lot than buy one at the industrial park and build a distribution centre," he said.
Johnson noted that a Kiel lot might still be in the cards as part of a long-term plan as they hope to build a 60,000 square-foot distribution facility.
Coun. Walter Preugschas asked what types of businesses have been inquiring about Kiel properties.
Johnson noted half the inquiries ranged from equipment storage and sales companies to waste disposal.
Coun. Darrell Troock asked if the county's price structure was a hindrance.
Johnson said Kiel's pricing was competitive.
"In rural Alberta, by the time you put a 20,000 square foot property on a five-acre property, you are looking at $3.5 to $4 million," he said, adding by the time improvements such as gravel and exterior lighting are added to the figure can quickly balloon to upwards of $6 million.
Preugschas asked if they had seen any interest anywhere in the province for agriculture-based industrial activity.
"There seems to be a fair bit of hemp interest in Edmonton and surrounding areas and they would consider putting their facility in Barrhead ... but there is the issue of not having railway access," Halasz said. "Agriculture-based industry is definitely a growing sector and I think it has the potential to be big."
Reeve Doug Drozd asked if there was any potential for companies who have their operations in Edmonton-area industrial parks to relocate to rural locations due to their lower taxes.
Although there is some movement of companies from Edmonton industrial parks to those to outlying areas, such as Sturgeon County, Parkland County and Strathcona County, it is not as much as one might expect due to the provincial economic climate.
"There are people in far-west Edmonton moving out to Parkland County or those in southeast Edmonton moving to Strathcona County because the taxes are half of what they are paying," Johnson said. "Edmonton is not a great place to do business. Unless you are a business that requires busing, outlying counties are great options."
Halasz agreed but said although there is movement, companies are signing shorter-term deals.
"And the prices of the deals are going down," Halasz said.
Coun. Bill Lane interjected that local real estate companies are seeing an increase of interest from Edmonton residents looking for property in Barrhead and that might translate to more interest in lots at the Kiel Industrial Park.
Barrhead and District Chamber of Commerce past-president Dave Sawatzky had noted something similar at the Oct. 13 Town of Barrhead council meeting.
Barry Kerton, TownandCountryToday.com
