Canadian Tire nearly pulled out of the deal to purchase municipal property because of the pandemic, but city hall managed to convince the company to postpone the project for a year.
Canadian Tire Real Estate Limited has spoken with the City of Moose Jaw since 2016 about purchasing property on the exhibition grounds. On Dec. 16, 2019, city council agreed to sell 4.78 hectares (11.95 acres) to the company for $3.17 million.
The original contract was supposed to close on April 16, 2020, while Canadian Tire had to commence construction before Oct. 31, 2021. However, based on the renegotiated contract, Canadian Tire must start building before Oct. 31, 2022. This means it could be 2023 — if the company still goes ahead with the agreement, that is — before a new building is constructed.
During its April 13 regular meeting, city council voted unanimously to have the city clerk and mayor execute the revival and amending agreement with Canadian Tire Real Estate, subject to the company paying a non-refundable deposit of $200,000 — five per cent of the project cost — by Wednesday, May 20.
The original motion did not include the demand for the deposit; council voted 4-3 on an amendment to include that clause. In favour were councillors Brian Swanson, Scott McMann, Dawn Luhning and Heather Eby. Opposed were Mayor Fraser Tolmie and councillors Crystal Froese and Chris Warren.
The original revival and amending agreement would have allowed Canadian Tire to put its first deposit of $50,000 into a trust that its solicitor would hold. The company’s second deposit of $200,000 would have been due by Jan. 15, 2021, while the final payment would have been due April 1, 2021, instead of this June.
Council discussion
“I reached out to them and asked them to seriously reconsider,” Tolmie explained. Both parties have put significant time into this agreement, while it was only in December that the agreement was approved. To reject this economic development activity “wouldn’t send a very good message to our city.”
This project is four years old and was initially approved by the previous council, said McMann. Even without the pandemic, he didn’t think Canadian Tire had dealt with Moose Jaw in good faith. Canadian Tire spoke in 2017 about proceeding, but that hasn’t happened yet. Moreover, this land wasn’t even advertised and there could be other parties interested in it.
“There is very little skin in the game on their end … ,” McMann added. “They are stringing us along further and further. COVID-19 is unfortunate, but that happened in the last four weeks and this project has been in the last four years.”
Poor negotiation skills
Canadian Tire approached the municipality last September and renegotiated the agreement, which meant Moose Jaw received less money, said Swanson. If the company wanted, it could have opened a new building two years ago.
Canadian Tire only extended this project since it has little invested, he continued. City council and city hall “have been played in this.” Furthermore, prime land on Thatcher Drive has been tied up, while 19 additional acres nearby could be restricted for decades.
“I think the City of Moose Jaw has not demonstrated good negotiation skills in this matter … ,” Swanson said. “We have a history of investing money in land projects that don’t come to fruition.”
Canadian Tire's vice-president was clear about the challenges the company faces, said Tolmie. Yet, the company was receptive to Moose Jaw asking it to stick with the project. Canadian Tire did not ask for a better deal; it’s the same deal.
“If Canadian Tire has put its business on hold, who’s to say someone won’t come along with a different offer,” Tolmie added. “We are better off to look at the deal we’ve been working on and continue talking with Canadian Tire.”
Possibility Canadian Tire could still walk away
This deal has put council in a bad position, especially since nothing has happened in four years, said Eby. She didn’t know if approving the amended motion was a victory since Canadian Tire could still walk away.
Some of the delays occurred since the municipality didn’t complete enough work, city manager Jim Puffalt said. Some land analyses weren’t completed, while there were parcels that had to be consolidated. He thought Canadian Tire was sincere about proceeding even before COVID-19 struck. No one has inquired in the last two years about that property, anyway.
It’s unfair to blame the municipality for the delays since Canadian Tire asked about exhibition property that wasn’t even for sale, said Swanson. Since Canadian Tire wanted the land, it had plenty of time to conduct land and environmental analyses.
Mega-store could bring jobs
One of Canadian Tire's more recent builds occurred in Grande Prairie, Alta., with the process starting in 2014 and the mega-store opening in 2019, said Froese. This gave her confidence that the company would act in good faith. Yet, she wasn’t sure if tying up this project for a year was possible, especially due to the pandemic.
“Canadian Tire mega-store style employs a lot more people. There is the potential for that area to grow,” she added. “Maybe it’s going to come to our city when we need it most after we get through this.”
The next regular council meeting is Monday, April 27.
