Town accepts land proposal

In a split decision, Ponoka town council approved the sale of industrial land at $43,000 less per acre than its asking price.

In a split decision, Ponoka town council approved the sale of industrial land at $43,000 less per acre than its asking price.

After some heated discussion in-camera, council accepted a proposal from Cervus Equipment to buy 13.89 acres for $1.9 million.

A formal proposal from the company was presented Sept. 10 offering $137,000 per acre. The contents of the proposal were not made public but general manager Rick Cline feels the whole process will take six months to complete. “You don’t go buy that type of property at that expense without doing your due diligence.”

He hoped to clear contract conditions sooner but they are only at the initial stage of the project and was reluctant to give an exact timeframe. Building plans, contractors and trades will need to be organized and town utilities will need to be connected.

The dealership has been in Ponoka since the late 1970s and wants to expand. “We’re out of space. We’re on four acres here,” Cline said.

One of the concerns with the current building and property is the safety of customers; another issue has been dealing with equipment that has grown substantially in size over the years.

For more than a year the company has been working with the town to expand in the Southwest Industrial Park. There was some informal discussion over the purchase and it was only recently Cervus Equipment made a formal offer. “We’ve had the same property in mind. It suits us. It’s the size we need.”

The property faces Highway 2A, across from the Calnash Ag Event Centre, and provides accessibility for customers who operate large equipment. He feels this location is safer than being on Highway 53. Cline did not say what would happen if the offer were denied but said their hope is to keep Ponoka as their home base.

“We have a very strong base of very loyal customers,” he added.

Council’s decision

The proposal passed by a narrow margin of 4-3. Mayor Larry Henkelman and councillors John Jacobs and Doug Gill were opposed to the proposal.

Henkelman took issue that the land was recently reduced in price to $180,000 per acre from $225,000. He feels the lower price will affect land assessment but added there is some benefit to Ponoka. “Anytime you can have a business increase in size it’s definitely advantageous to the community.”

Henkelman feels the land is worth more than $130,000 per acre as Penhold has sold land for more than $400,000 per acre. There has been no desire from companies to develop, which is why the town decided to sell land.

“Ponoka has had a slow growth rate compared to other communities,” he added.

The mayor is also worried that now the Town of Ponoka has no industrial land for sale. Companies looking to set up shop in most communities want to start right away, he explained. Having no land makes it difficult for an industry to move to Ponoka.

Despite these worries, Henkelman added the town will see an improvement over its appearance with construction and a bigger tax base.

“There’s a total economic spinoff,” added Henkelman.

Coun. Rick Bonnett recently successfully argued council should drop the price to $180,000 and he believes this will benefit Ponoka. “With that much land they’re going to build a fair sized store. They’re going to contribute to the tax base and they’re going to expand their employees.”

“I think it bodes well for the town…We’re going to get taxes off of that, which we haven’t since we purchased it,” he added.

He feels Ponoka could capitalize on the momentum of this sale. Bonnett suggest Sarah Olson, economic development officer, should approach industrial machine companies in central Alberta to entice them to move here in response to the purchase. “Maybe we could get something in the town.”

Despite the company’s recent desire to purchase the land, Bonnett wanted to drop the price two years ago. He does not feel there is demand in the marketplace for Ponoka to sell land at prices compared to other communities. Increasing the tax base and commercial property taxes is a first step to increasing property value.

“I’d love to see the town full of businesses. That’s a whole different saga,” he said.

The original asking price was $225,000 per acre and Bonnett says the town never received a formal offer during that time. Bringing it down to $180,000 put the land in reach for more companies, he said.

Discussion between councillors over the offer was heated during an in-camera session and Bonnett suggests town councillors should not be in the land business but should help bring businesses and developers work together. If the town does buy land, Bonnett wants property to be sold within three to five years.

There is a caveat on the property for first right of refusal from Morskate Manufacturing and the company has 10 days to make a decision after the offer has been made.