Change could be coming to Saskatoon Land

Over the past few years, the City of Saskatoon’s involvement in land development has come under greater scrutiny.

More questions about the city’s role in the development business will be asked later this month when an audit of Saskatoon Land is presented at city council’s finance committee.

Many taxpayers in Saskatoon may not be aware the city is involved in land development. Not many have an extensive understanding of it.

People involved in the real estate, development and home building industries in Saskatoon have long questioned the role of Saskatoon Land.

Representatives of those industries and the wider business community are expected to be on hand when the audit is presented at city hall next Monday.

The audit did not examine whether the city should be in the land development industry — it reviewed the city’s practices and how they compare to other municipal governments. It includes 21 recommendations, including better defined conflict of interest procedures for the 18 employees of Saskatoon Land and greater transparency in reporting its operations.

Regardless of what the audit says, some will no doubt use it as ammunition to once again question why the city is involved in an industry usually reserved for private companies.

Government involvement in the economy is usually justified in one of two ways: Public participation ensures an essential service or product is supplied to all, such as health care, or some greater societal goal is achieved.

The city’s involvement in land development only arguably meets the second criteria. The city uses revenue from land sales to pay for services for residents and arguably helps direct growth and development in a way that adheres to the city’s overall goals, rather than just being motivated by profit.

At a time when the city contracts out many traditional services, such as building bridges, land development looks like an anomaly. It seems more relevant than ever to ask why the city is involved in land development and what its goals are, even if the audit does not attempt to answer those questions.

The city has been involved in land development since the 1920s and formalized its involvement in the mid-1950s. During the boom years of this decade, there seemed little reason to question the city’s land development branch — beyond industry and ideological objections — as land sales soared to $166.2 million in 2012 during a boom in growth and housing.

Sales plummeted to just over $62 million in 2015. Saskatoon Land’s market share also dropped to just over 40 per cent in 2014 and 2015 from an average of 59 per cent from 2010 to 2013.

Many defend Saskatoon Land as providing valuable revenue that helps ease the property tax burden. For this reason, the City of Saskatoon seems unlikely to ever abandon this funding source, which yielded more than $120 million over the last decade.

That does not mean questions should not be asked about its operations.

In 2015, the purchase of 155 acres in the Rural Municipality of Corman Park for $4.2 million raised the ire of the RM’s council. Corman Park Reeve Judy Harwood called the purchase “a little underhanded” and said it torpedoed plans for commercial development on the land.

Saskatoon Land described the purchase as “strategic” in a city report, which noted the future Saskatoon Freeway will one day be built nearby. Harwood said the price was higher than a private developer would have paid.

Earlier this year, as council considered the official plan for the new Elk Point neighbourhood, which is being developed by Saskatoon Land, it was revealed that servicing work had already began — before the plan was approved.

Saskatoon Mayor Charlie Clark has pushed for a rethink of the city’s land development branch. Clark wants to consider a model further removed from city council and has repeated others’ concerns that the city’s involvement in the development industry drives land prices up.

Clark has suggested the land branch be run by an independent board; the audit also concludes greater independence would have advantages.

The time for some changes at Saskatoon Land appears to have arrived.