Town denies Morskate’s request for deal extension

Town council has denied a request from Morskate Manufacturing to extend a first right of refusal on 3600 Highway 2A.

Town council has denied a request from Morskate Manufacturing to extend a first right of refusal on 3600 Highway 2A.

The company has an arrangement with the Town of Ponoka for first right of refusal on two acres of land in the Southwest Industrial Park on 39 Avenue and 67 Street adjacent to their property. However the contract expires Dec. 31.

This two acres is part of the 13.3 acres Coun. Rick Bonnett successfully argued should be reduced to $180,000 to speed up its sale. He suggested the town should work with Morskate on this request.

“I understand what the contract said but at the same time we don’t have a sale,” said Bonnett. “We don’t have a pending offer on that land right now.”

He suggested council extend the first right of refusal for six months to a year. Coun. Loanna Gulka asked of council needed to make a decision right away.

There are other companies that have expressed an interest in the 13.3 acres but no formal offer has been made, explained CAO Brad Watson. The advertised property includes the two acres Morskate is interested in and a decision is important for potential buyers. “What we can do as a courtesy, if someone is coming, to make them (Morskate) aware there is a party looking and discussing this property.”

Coun. Doug Gill believes if Morskate is unsure about the two acres council should deny the request as there might be other companies who would buy it. “He has till Dec. 31 so it’s not an immediate press right now.”

Bonnett suggested council wait until a few weeks prior to the expiry date before making a decision but Coun. John Jacobs did not agree. He would rather keep it on the books for review later. “They’re asking us a question. Are you suggesting we don’t answer his question for six months?”

He feels the best option for council is to deny the request, which would give Morskate some time to plan for the future.

“That doesn’t prevent him from asking again,” Jacobs added.

Drawing up contracts such as this and then allowing companies to extend them is not something Gill would advise. “We have to be real careful.”

He feels council should stick with the contract that was signed and after it expires revisit other options. The contract states the agreement may not be extended past Dec. 31.

“Legally you cannot extend this first right of refusal,” said Watson.

Gulka and Bonnett opposed the motion to deny the request.