City spent over $48,000 to smooth deal with Carpere, report says
The City of Moose Jaw spent $48,557.56 on external legal services to help facilitate the now-failed Carpere Canada deal to build in the Southeast Industrial Park, documents show.
That cost was expended to help complete several tasks in an attempt to solidify the deal with the agriculture-focused private investment and management company, a report to city council explained. The information gained from this work was expected to provide important background knowledge and templates to help negotiate future land sale agreements and development agreements in the Moose Jaw Agri-food Industrial Park and the municipality itself.
Those specific tasks included:
• Assistance in negotiating a fair land sale/purchase agreement of this type;
• Creation of a template and actual offers to purchase for land in the industrial park and a large-scale residential purchase;
• Creation of a template and actual purchase agreements for land in the industrial park and a large-scale residential purchase;
• Formation of a template and actual development agreements for land in the industrial park and a large-scale residential purchase;
• Formation of a template and actual servicing agreements for land in the industrial park and a large-scale residential purchase;
• Creation of templates and actual amending agreements;
• Access to the municipality’s external legal counsel’s trust account to hold the deposit and earn interest on the deposit as required under the purchase agreements;
• Assistance to complete the required subdivision and land title consolidation;
• Advice on how to handle the leases on the industrial park property at the time of sale;
• Advice on the SaskPower land sale as it pertains to and affects the industrial park land intended to be sold to Carpere Canada.
The deal with Carpere Canada was heralded as the largest land sale in Moose Jaw’s history when it was announced last May. The private investment company had offered $7.8 million — or $10,000 per acre — to purchase 312 hectares (780 acres) in the industrial park. Carpere put down a deposit of $780,000 as it began to work with city hall to create a long-term servicing agreement. If such an agreement had been completed, the municipality could have received an extra $38.6 million — or $49,600 per acre — after Carpere had developed all the land. As part of the deal, city council agreed to spend $2.1 million to upgrade the area roads and install underground infrastructure.
“I’m very excited about this potential partnership,” Mayor Fraser Tolmie said at the time. Moose Jaw “is poised to see tremendous economic growth with this development.”
Tolmie also said he had little concern about the deal. He was excited to see how the concept plan would look, while he thought it would suit Moose Jaw since it is ideally situated for processing, value-added manufacturing, rail transportation, plus the municipality’s desire to advance technologically.
Full payment was supposed to have been made last October, but Carpere asked for a four-month extension to February. On March 3, Carpere Canada told municipal officials it was pulling out of the deal after “extensive due diligence” and would not move forward with the agreement to purchase land in the Southeast Industrial Park. Another report showed $1,247,008.74 has been spent so far on the industrial park. This includes costs associated with the concept plan, engineering consulting, legal fees, surveying, subdivision, consolidation, construction, water testing, geo-technical report and environmental studies.
The federal contribution was 50 per cent, or $623,504.37; the provincial contribution was 25 per cent, or $311,752.19; the municipal contribution was 12.5 per cent, or $155,876.10; and the SaskPower contribution was 12.5 per cent, or $155,876.10.
The next regular council meeting is scheduled for April 13.