The sale of the Kinsmen Community Centre for $480,000 is not happening.
Town administration missed the signing deadline from Cash Foods (Hamilton’s IGA), the company offering to buy the building.
Ponoka town council held an electronic special meeting the morning of June 15 to agree to sell the building to Cash Foods. All but one of the steps needed to ensure the meeting was held in accordance with the Municipal Government Act (MGA) occurred.
Electronic meeting requirements
Under section 199 of the MGA there are three steps that need to be followed regarding electronic meetings: notice to the public, facilities enabling the public to watch or listen to the meeting at a designated place, and participants can watch or hear each other.
The last step was not followed. Then on July 22 a town resident sent a letter to administration pointing out the error, asking if the decision was null and void. Those issues appear to have been part of the reason behind administration not signing the offer to purchase.
CAO Albert Flootman confirmed that the town did not record the meeting, but followed the town’s council procedural bylaw.
“We have since received legal advice that this process is not consistent with the MGA,” said Flootman in an email. “The obvious shortcoming is that the public is not able to fully observe the proceedings. Administration is bringing forward an updated bylaw that will remove this section.”
Municipal Affairs responded to a Ponoka News query about the validity of a motion if the steps aren’t followed. An email from municipal affairs states that the motion still stands. “…unless someone challenges their validity in court.”
“The court would have to rule that the municipality violated the MGA in order to overturn any decisions,” it adds.
That motion is moot as the offer to purchase expired. Flootman observed as much in a letter responding to the resident.
What happens to the Kinsmen Centre?
Since that time, Cash Foods, which has a first right of refusal on the building — approved in 1999 by then council of the day — has learned there is asbestos in the Kinsmen Community Centre.
An assessment made on the building also values the building much lower than was offered to buy it. Plus there is a portion of the roof that may need to be replaced.
All these factors have dropped the value of the building significantly.
Jim Hamilton, of Cash Foods, said he provided the town with an expiration on his first offer for July 24, which was then extended to July 31. For him it was a question of timing with relation to improvements.
“There was no guarantee I could start on the building,” said Hamilton.
The delay from the town ended up being a bit of a relief. “Had they signed the deal we would have had to commit to it,” he said.
Despite these issues Hamilton says he would like to purchase the building suggesting that it would provide additional tax dollars to the town as a commercial property.
The problem is that with the additional costs to renovate the building, Hamilton lost his partner, Greg Braat of Battle River Cooperators Insurance. Braat has since declined to continue with the deal.
“The price ended up overall $150,000 higher than my top budget,” explained Braat.
“I wasn’t going to make a decision until I had the final numbers,” Braat said, adding that he preferred to be open with residents about his intentions.
Hamilton said he hopes to move forward once he has a business partner interested in joining him on the deal.
Mayor Rick Bonnett said his hope was to sell the building in an effort to save the town money.
He pointed out that Cash Foods already owned the parking lot — a sale agreed on by council in 2016.
Bonnett feels council’s hands were tied on the deal. “Our former council of the day had given Mr. Hamilton first right of refusal on the property.”
One area Bonnett admits should have been followed was holding a public hearing when it comes to selling public land. The problem he saw was how could the town negotiate on selling it considering the first right of refusal.
Bonnett says he takes full responsibility about the public hearing issue as he talked council out of going through the public hearing.
“Council was trying to do the best deal it could under the circumstances,” stated Bonnett.
“Now we’re going to lose money out of the deal but we’re going to do it properly.”
As for the appraisal and concerns about asbestos, the mayor confirmed asbestos has been located. “They (inspectors) found asbestos and they also found a roof problem.”
“The appraisal is significantly lower (than the offer to purchase),” he added.
The town has since directed administration to renegotiate with Cash Foods but to also go through the public hearing process to sell the building.