The city and Lansdowne Equity Ventures have come to a deal to transfer 96 remaining lots in the Saamis Phase 7 subdivision to the private real estate developer for $7.1 million.--NEWS PHOTO COLLIN GALLANT
cgallant@medicinehatnews.com@CollinGallant
The City of Medicine Hat’s land development wing has struck a deal to unload 96 lots – the entire remaining inventory of the Saamis 7 subdivision – to a private developer.
The $7.15-million sale, to Lansdowne Equity Ventures, would see batches of 20 lots transferred in 12-month intervals.
The private real-estate company takes over the lots at a steep discount, but promises to “aggressively market” lots that have been slow to move.
That would end the city’s involvement in the project that’s seen slight sales over five years, and free up capital for other projects, said Mayor Ted Clugston after Monday’s council meeting where the deal was ratified.
“At this time, with our absorption rate (sales), we’re better off (with the bulk sale),” he told reporters.
“We think that we’re a pretty good (bare) land developer but maybe where the private sector is better is at marketing.
“We expect them to market the properties very aggressively.”
Lansdowne, which is best known for developing the south-side “Hamptons Community,” said in a release Tuesday it hopes to have a marketing campaign ready in December.
It plans to partner with local builders and erect three show homes in the subdivision that has seen 16 sales since 2015.
“We’re incredibly excited about this opportunity, as Saamis Heights is a beautiful community with a lot to offer its residents,” stated Lansdowne chief operating officer Blair Hann.
The community, with a linear park and mostly walkout basements, has also been dogged by criticism about small lot sizes, but Lansdowne said this week it offers a good array of pricing for new home construction.
The deal can be renegotiated at yearly intervals over five years as hurdles are met.
Background documents state Lansdowne’s offer was unsolicited.
According to city sales brochures, the combined list price of the 96 lots is $11.1 million, making the discount on the sale $4.05 million, or a 36 per cent reduction.
But the sale does return capital for the city land department, which now falls under the “Invest Medicine Hat” economic development office.
It is currently advancing study to build a serviced industrial park in the northwest and is actively adding commercial land near the Medicine Hat Regional Airport.
“We see ourselves as more patient investors,” said Clugston, regarding questions about the retreat from residential sales and capital needs. “The private sector would have more trouble doing an industrial land.”
He also argued that the unusual sale is in line with a move to lessen the effects of city-led development on private sector efforts.
Five years ago the land department altered its operating policy to try to limit its market share at half the available lots compared to the private sector.
However, two years ago, administrators noted that with few new private subdivisions coming online and municipal inventory moving slower than forecast, the ratio was becoming lopsided.
At the same time, administrators began advertising a willingness to consider large parcel sales to private interests, but that would be for bare land.
