Opinions split on huge mall
Would be largest on continent
SASKATOON — Zolie Barna has lived in Dundurn for decades. In his memory, the biggest thing to happen in all those years was the building of an artificial lake at nearby Blackstrap Provincial Park.
But now, the vast majority of local residents are eager to see the largest wholesale mall in North America spring up in their front yard, although some have their reservations, the retired heavy equipment operator said.
“Some people are saying we’re going to have a lot of traffic and a lot of this and a lot of that. But maybe it’s time we had a lot of this and a lot of that. Maybe it’s time to grow,” Barna said.
The multimillion-dollar project plotted for a field on the outskirts of Dundurn, a bedroom community of some 700 people, would have more square footage than the West Edmonton Mall. While Dundurn residents are optimistic and hopeful the project will bring new prosperity to the region, business watchers are skeptical.
It could be built, but can it really draw corporate purchasers from every corner of the continent?
“I don’t think it has the clout to bring them out. The more you think about it, it makes no practical sense,” said David Williams, a professor of retail marketing at the University of Saskatchewan’s Edwards schools of business.
After examining locations across North America and sites around Saskatoon and Corman Park, a recently formed company called Brightenview Development International purchased a quartersection of former Crown land in Dundurn. Details of the massively ambitious project began coming to light a few months later, after the company held an open house in early December to answer questions from Dundurn residents about the project.
Executives at Brightenview are keeping their cards close to their chests, but an insider said the concept for the Dundurn International Exhibition Centre is inspired by a similar project near Shanghai, China.
The Yiwu International Trade Market is recognized by the World Bank as the “largest small commodity wholesale market in the world.” A veritable city unto itself, it holds 62,000 stores and booths, most of them affiliated with factories from across China. Many large foreign retail chains have offices near Yiwu and cut multimilliondollar deals to stock their store shelves with Chinese products.
Brightenview’s CEO, Joe Zhou, is a Chinese-Canadian former banker and risk management specialist. The company’s senior and junior ranks are stacked with many Chinese speakers.
The first phase of the project is estimated at $200 million, and the company will not say who is financing it.
Rural Municipality of Dundurn Reeve Fred Wilson said Brightenview was drawn to Saskatchewan because of the province’s attractive economic atmosphere, with low corporate tax rates and low friction immigration policies for business people.
Plus, since they’re aiming to attract corporate purchasers from every corner of the continent, Dundurn seems as good a place as any, he said.
“It doesn’t really matter whether it is outside Edmonton or Toronto or Dundurn, since it’s all going to be air transportation to it anyway. So the location wasn’t the prime issue in deciding where they wanted to do it,” Wilson said.
The plan includes a shuttle service running between Dundurn and the Saskatoon airport to ferry purchasers back and forth, local residents were told at the town hall meeting.
Wilson said project managers are eager to break ground for the Dundurn International Exhibition Centre sometime in the fall of 2013 and expect completion of the first phase in about two years. Ultimately, the 6.4 million-squarefoot complex would be home to 350 shops and create some 1,000 jobs, according to Brightenview’s promotional materials.
Wilson noted many communities in Saskatchewan have had their hopes raised over huge projects of different sorts only to see them fall apart, so he’s hesitant to say it’s all a done deal. Nevertheless, he’s impressed with the executive team and thinks they’ll pull it off, he said.
“It’s the same old rationale of, ‘I’ll believe it when I see it,’ and that’s fair game. But we’re hoping this is our chance,” he said.
The community hasn’t been asked to contribute any cash for the project, which has done a lot to get local people on board, Wilson said. Dundurn resident Barna is one of those.
“Everybody can have the ability to be skeptical, but why would we? They’re not asking for no money from nobody — they’re doing it,” Barna said.
Hiring for the project has already begun on a small scale. Brightenview is seeking applications for two positions on SaskJobs.com. These first hires will be sent to China to drum up business and find Chinese manufacturers interested in selling their wares from Dundurn.
“The candidate should have bachelor degree or above, have strong English language skill, sufficient experience in marketing and business promotion and be able to work in China for a period of time to conduct project promotion,” the ad said.
Wilson said the company has told him most of the jobs associated with the project will go to Canadians, but upward of 350 Chinese people — at least one per store — will likely relocate to Dundurn to represent their companies.
Canadians will be there to speak to buyers in their own language, while the Chinese expats will sign off on the deals, according to Barna.
“The Chinese, he sits in the back, and the salespeople are in the front. That’s my understanding from what I’ve been told (at the open house).”
While the project may seem a little hard to fathom, there is a simple reason why it may just work, he said.
“It’s cheaper to come here than it is to go to China, isn’t it? And they don’t have to worry about having an interpreter.”
The idea of a giant wholesale mall built in a town of 647 residents is not plausible, some business experts said.
Williams, of the Edwards School of Business, calls it “grossly naive” to think major retailers would travel to Dundurn to buy products for their stores.
“It’s for huge retailers buying things for their stores,” Williams said of the proposed mega-mall. “And most of these buying decisions are made by head office — and if it’s Home Depot, that would be made in Atlanta and Toronto.”
While the concept of a wholesale city works great in Shanghai, nothing of the sort has been attempted in Canada, Williams noted. Unlike Shanghai, Dundurn is not an established international exporting hub with 23 million people and hundreds of corporate purchasing offices.
It’s almost as if Brightenview simply looked at a map of North America and decided to build here because it’s in the middle of the continent, he said.
The fact that Brightenview has no previous projects under its belt and no publicly confirmed financiers makes him suspicious, Williams said. So does the fact that the project’s proponents are so reluctant to take questions from reporters.
“The secrecy is strange, because normally they want to publicize it to get credibility. It’s more of a mystery story than a business story,” Williams said.
Tim LeClair, president of the Saskatoon Regional Development Authority, said the project has raised “lots of red flags and questions” for him. He doubts its viability, first and foremost, because of Dundurn’s distance from its target market: The headquarters of large retailers.
LeClair notes little information has been made public about how the project will be financed, raising concerns about its viability and sustainability.
He says local Dundurn officials should be careful the project is viable before investing municipal tax dollars preparing the megamall site, by building roads for example.
“My concern is that they (could) go and spend a lot of money preparing for such a project, without really doing a lot more due diligence,” LeClair said.
On the other hand, people doubted the builders of the West Edmonton Mall in that location — until they succeeded, LeClair said.
Former member of Parliament Lorne Nystrom, who does public relations work for Brightenview, said media questions about the project will not be answered until a news conference scheduled for late January.