January 18th, 2018

Booming builds top the list for business

By Collin Gallant on December 29, 2017.

New construction builds such as those taking place at Strachan Corner top the list of bif business stories in Medicine Hat for 2017.--NEWS FILE PHOTO


cgallant@medicinehatnews.com
@CollinGallant

The nationwide failure of Sears Canada this fall put a spotlight on challenges traditional brick and mortar retailers face in the coming years. It was also The Canadian Press business story of the year.

In Medicine Hat, however, a commercial construction boom tops the charts for what made waves in the local business landscape.

Three new hotel projects, strip malls, a new grocery store, a major remake of the Medicine Hat Mall and a few other notable property sales stoked business confidence in the city as it and the province emerge from general recession and oilpatch crash.

New air service, falling unemployment and a new manufacturing and chemical production also made headlines.

A look at some of the biggest trends in local business:

Build, build, build

In the words of most observers new commercial construction on the city’s south end is nothing short of a bonanza.

A 17-acre land deal between the city and Canalta Hotels will see a hotel and Co-op commercial strip go up on the site near Strachan Road.

Two other private land sales in the area will see the Braemar hotel management group and Sun City Hotels begin pouring their foundations this fall.

Overall in all sectors in Medicine Hat, the level of construction spending in Medicine Hat will stay at least even with 2016, when school construction and other public projects boosted the total.

At Nov. 30, the city planning office had permitted projects totalling $109.8 million. That’s compared to an 11-month total of $120 million in 2016.

Also on the south side, the former Walmart Supercentre site was cleared and work went ahead to build a Save-on-Foods. The Medicine Hat Mall opened its reworked food court in the former Target Space mid-summer. At that time, parent company Primaris stated the company had actually increased leasable space and rental income compared to when the now-failed U.S. retailer operated in its facilities.

New questions loom, however, after the abrupt closure of major mall tenant, Sears, which is winding down operations across the nation.

Real Estate

Homebuilding and resales of residential property pointed slightly upward in 2017 compared to 2016, but local builders and industry groups note that was a low bar to clear. New home permits will be positive, but some national studies say the local scene will continue to see slow improvement along with the rest of the province.

At Nov. 30, the real estate market reported a six-per-cent increase from levels of 12 months earlier.

Wind

The decade-old prospect of major wind farm development in the region will become a reality in 2019, it was announced in December.

A green energy supply auction held by the Alberta Electrical System Operator resulting in winning bids from Capital Power for its 200-megawatt Whitla Wind facility south of Medicine Hat valued at $310 million and hundreds of construction jobs starting next year. EDP Canada will also begin to build a 250-megawatt wind farm near Oyen.

“It’s diversification,” said Palliser Economic Development chair Jay Slemp. “If oil and gas come back big, we already know how to do that. Wind is something new, and something else we can add to what we do well.”

Helium plant proposed

A plant to cool and concentrate helium to several hundred degrees below zero could be operating in Medicine Hat in 2019, according to the Weil Helium Group.

“We want to get rocking and rolling on this thing,” the company’s CEO, Jeff Vogt, told the News on Nov. 2

The announcement followed quickly after the city’s petroleum division announced it too would begin exploring for the gas that’s needed in high-tech manufacturing.

A $20-million plant would eventually accept gas production trucked in from Saskatchewan, though the city and others are lobbying the government to regulate helium drilling in Alberta as well.

Staying on the refining sector, Methanex reached a hedging agreement to supply the local methanol facility for the next 14 years.

Mixed year on the farm

Farm cash receipts in Canada could hit a new record in 2017, but results in Southern Alberta could be more of a mixed bag.

Alberta Agriculture’s final crop report of 2017 pegs yields across southern Alberta as the lowest in the province, and one-quarter below 2016 levels. Canola (27 bushels per acre in the region), barley (42) and oats (41) were hit particularly hard here during a very dry summer.

After a rough start, cattle markets improved late in the year, but most analysts are predicting volatile times ahead.

Ranchers in the region were also hurt by the Bovine TB outbreak and wildfires in 2017.

Increased checkoffs were also approved to take effect in April. That will fund industry research and marketing that could be sorely needed depending how global trade talks proceed in 2018.

New entity

A merger between Atlantis Research Labs and Formtech Machining in Medicine Hat was announced in August and the resulting firm will go hard to market the Purejet system that reduces methane emissions at oil and gas sites.

The principals set hiring estimates at 200 over the next five years, if production is ramped up to meet forecast sales.

Jobs

Medicine Hat’s unemployment rate hit its peak and valley in the month of July over successive years.

The most recent summer month saw jobless rate hit a two-year low at 4.1 per cent, down from a near two-year high in July 2016 of 7.8 per cent.

Increased economic activity stoked by recovering energy crisis is cited as reason for the turnaround.

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