The former Medicine Hat Food Bank building at 532 S. Railway St. could be one the market in January, a council committee was told this month.--News Photo Collin Gallant
cgallant@medicinehatnews.com@CollinGallant
City Hall could seek to sell the former Medicine Hat food bank building that it bought four years ago, but at a substantial discount to cover the cost to demolish it.
Council’s energy, land and environment committee heard on Dec. 7 that while there is some interest in the real estate market for the site, the building is likely unsuitable for redevelopment.
And, since the potential cost of safely tearing it down considering hazardous material within the building could be $238,000, the property should be listed at an “as is where is” price of $249,900, staff recommended.
That’s compared to a valuation of $500,000 done at the time of the 2020 purchase. At the time it helped the social service agency move ahead with a major facility upgrade.
Now, elected officials will be asked to approve the sales strategy at the next council meeting on Dec. 18, but at least one councillor called it an example of the city taking on potentially large liabilities when it decides to acquire land or buildings.
“If there wasn’t a clear vision of what we were going to do with the building, why did we buy it,” said Coun. Andy McGrogan, noting the decision was made during the last term, and helping the food bank’s relocation was a “good cause.”
“It was done for a good reason, but I think our policy has to be tighter when we buy a building that we don’t have a vision for.”
The location, at 532 S. Railway St., was acquired by the city in 2020 as part of a swap with the Medicine Hat Food Bank Society as it moved into the former Maple Avenue fire station.
It paid $800,000 in cash for the Maple Avenue building and transferred the S. Railway property – valuated at $500,000 to $550,000 by an independent appraisal in 2020 – to make up the difference in the $1.3-million transaction.
That was slightly below the asking price for the fire hall, which was promoted as high-exposure commercial property, but garnered little interest from private sector developers.
The deal allowed the redevelopment and rebranding of the food bank to the “Root Cellar Food and Wellness Hub” to proceed. The food bank covered the cost of site assessments at that time which found that substantial abatement would be required if major renovations proceeded – which can be common considering construction material.
A recent city report states the building is in “structurally fair condition” but was “built in numerous stages … limiting its marketability.”
The carrying cost of the property is about $18,000 per year including insurance, basic maintenance, security and utilities.
McGrogan said the issue mirrors a separate purchase of the Medicine Hat Curling Club this year to help ease major renovations.
He said Wednesday he is not opposed to the city buying properties to ease redevelopment, but the council should have a clear picture of costs and opportunities.
“I think there are a few that the city could do a good job on,” he said.
The S. Railway location is currently being used this month as a drop-off and pickup location by another local social service agency. They will vacate the building in late January, and if the sales strategy is endorsed by council, the property would be listed at that time.
