Land department has one of the slowest years in recent memory
Annual report shows department meeting all its transparency requirements
The latest annual report from the city’s land department states it is meeting or exceeding transparency measures agreed to several years ago to answer criticism from the private sector.
That includes better tracking and publishing internal costs, as well as comparing sales of city versus private lots, and keeping the portion of city lots on the open market at about 50 per cent.
At the same time, 2016 was one of the slowest years on record for the city’s land development wing, with only 25 residential lots sold. Though the city is now seeking new partnerships and even bulk bareland sales with major developers.
However, with apparently fewer private lots changing hands, that slightly increased the city’s overall market share to 54 per cent in 2016. That’s slightly above the current four-year average of 47 per cent, but well below 76 per cent recorded in 2010.
“In previous years the city was a much more dominant player, but that’s ebbed away in recent years,” said department manager Grant MacKay at Wednesday’s meeting of the development committee.
He warned that 2016 was a very slow year throughout the industry but since land inventory of private developers is dwindling, the city’s share of lot listings will grow by comparison.
“If nothing changes, the private developers will run out of land to sell. So, we’re saying to the industry that we’re open to all offers, and those will be fully vetted and considered,” he said.
The city holds 4,111 acres it deems as marketable land, including 10 quarter-sections zoned for industrial use in the city’s northwest.
For the 2016 year, the division, including property management and leasing functions, had net earnings of $1.2 million, providing a dividend of $317,000 to the community capital reserve.
Committee members said they were impressed by the more detailed report and the state of the marketplace.
“I’ll never apologize that we’re in the land holding and development business,” said chair Coun. Robert Dumanowski. “We want to move to create a balanced market and it appears that we’re moving toward achieving that.”
Specific to subdivision sales, earnings totalled only $115,000. It’s considered “unadjusted” because it is difficult to factor in original cost of land that in some cases has been held for decades.
That’s one of the main complaints of private sector critics, who rage the department’s figures are misleading.
They also say the city doesn’t have the same land carrying costs, such as property taxes, making for an uneven playing field.
Officials with the Chamber of Commerce who attended the meeting said they need more time to study the report before making comment, but executive director Lisa Kowalchuk said land cost models need to be scrutinized.
Sales in 2017 have already reached last years totals, and a number of commercial transactions are set to close.
The house lot target for this year is 40, and the department has also worked with builders on multiple lot projects and could again in coming subdivisions.
The same tactic might be used in 2018 when the first riverview lots in years will be offered as Ranchlands phase 3C is prepared.
One possibility is that the dept could sell rights to a builder for a large parcel, then further divide, grade and service it according the developer’s wishes, though MacKay stressed a strategy is still being developed.
The department didn’t bring any new inventory to market in 2016, nor will in in 2017, but sales conditions are improving, said MacKay.
Privately held Lansdowne Equity has stated it will have about 45 new lots in the Hamptons ready for builders in October.