Aurora Sun plant sale nearly done
A deal to sell the Aurora Sun greenhouse is in the late stages, according to Aurora Cannabis’s most recent regulatory filings, the News has learned.
The massive but never completed greenhouse and initial processing facility would be sold to an unnamed buyer for C$46.8 million after it was marketed for alternate uses by the Edmonton-based Aurora.
The company expects the deal to close in the current financial quarter, it stated in financial statements, but offered no further comment.
The report states the company rearranged shares in a numbered company it owns, which holds the vacant building in the city’s northwest since construction was halted in late 2020.
The information was first noted by the industry trade publication MJ Biz Daily. The company did not respond to a request from the News for further information.
Eric Van Enk, head of the city’s economic development office, called the potential deal “very positive news,” though his department did not have any details, he said.
“It’s hopefully positive from an employment standpoint, and from employment there are other spinoff benefits,” he said. “Presumably the building would have to be completed to a degree before it’s put to a new use, and that would have an initial impact in terms of construction.”
Last week the company announced it would close and market a host of other facilities for sale as it continued to align its production with market demand that failed to meet pre-legalization expectations.
That included the Aurora Sky greenhouse in Leduc, another huge, high-tech facility which Aurora boasted would give it a low-cost, high-quality advantage in the emerging medicinal and recreational marijuana sector.
The C$46.8-million sale of Sun, according to company documents, include a “take back” promissory note for $26.8 million, payable within five years by the unnamed purchaser.
Stated construction estimates for the building varied greatly over time in public statements, but $200 million appears to be the best estimate, though the facility was never fully fitted out.
A host of manufacturing, ag-tech, storage and even cryptocurrency mining were among suggested uses in a sales brochure put out by real estate firm Colliers last spring.
In the summer, the Invest Medicine Hat office released analysis that the building — even in an unfinished state — had boosted the tax assessment base to a good degree.
That would see the city recuperate an initial $6-million subsidy, given in 2018 to close the deal, by 2025 or sooner if it was commercialized.
Taxation on commercial properties includes a factor for the level of commercial activity, and city administrators have argued that bringing any business online at the halfcompleted facility will increase its assessment, and corresponding revenue to the tax base.
When the plant was announced, council agreed to forgive $5.7 million in development fees, known as offsite levies, to pay for bringing services to the 70-acre site in the Box Springs Business Park. Elected officials argued at the time it was worth it to attract an expected 400 jobs.
Mayor Ted Clugston told the News in 2018 and more recently that “council had to make a quick decision, I’ll admit, but in the long term I think it will pay dividends.”
Since then the company paid $1.8 million for its portion of upgrades at a nearby electric distribution substation, paid an estimated $940,000 annual tax bill and has honoured its take-or-pay contract for power, according to city officials.
The future status of that power agreement is not known, as city officials declined to comment Wednesday, but initially involved 42 megawatts of delivery capability, making it one of the largest in the city.