After months of uncertainty, Canadian Tire Real Estate Limited announced it will proceed with its new development on Thatcher Drive East, which would bring Canadian Tire, Mark’s and SportChek under one roof.
The company informed the City of Moose Jaw on Nov. 9 that it had removed conditions from the agreement with the municipality and was satisfied with all “due diligence relating to the acquisition, servicing, development, sustainability and feasibility” of the proposed new store, according to a city news release.
“The city is very pleased with this news from Canadian Tire,” Mayor Fraser Tolmie said in the release. “This is a tremendous display of confidence in the Moose Jaw economy and validates why we fought so hard to save this development when others lost faith. These types of development require patience and time, but it’s worth the effort to see a local business like Canadian Tire expand.”
Background
Canadian Tire had worked with the municipality on this new development since 2016. During its Dec. 16, 2019 meeting, city council approved selling 11.95 acres (4.78 hectares) of exhibition property to Canadian Tire Real Estate Limited for $3,171,725, or $265,500 per acre.
While the company was expected to pay the municipality nearly $3.2 million, once service costs were considered, that profit would shrink to $688,725, or $57,634 per acre.
“(We’re) very happy. We have been working a long time with Canadian Tire,” Mayor Fraser Tolmie said after the meeting.
Council also authorized city administration to proceed with acquiring a qualified contractor to service the parcel, along with pursuing a partial connection to the remaining 66.05 acres to the north that were being serviced simultaneously as the Canadian Tire parcel, for $2,484,000, with the land reserve account to fund the project.
A council report also indicated the closing date for the purchase was 180 days after the agreement’s acceptance, or sometime in early June 2020.
According to the agreement, Canadian Tire Real Estate had the first right of refusal to purchase an additional 21.44 acres (0.8576 hectares) located on the northeastern edge of the property. The company had 60 days to decide whether to purchase those acres. If that didn’t happen, the municipality could attempt to sell that property.
The deal appeared to be on track when the pandemic struck in March. With the retail sector hit hard, the company informed city hall that it planned to withdraw from the agreement. However, work behind the scenes by the mayor and city manager led to Canadian Tire postponing the project for a year.
During its April 13 regular meeting, council passed a motion to pursue a revival and amending agreement with Canadian Tire Real Estate Limited subject to payment of a $200,000 non-refundable deposit. The original agreement would have given the company a one-year project extension to 2021 and extra time to pay deposits totalling $250,000.
However, in a letter to city hall on April 16, the company’s commercial real estate manager rejected the amendment and demand for the deposit. This forced city council to approve another motion on April 27 to have the city clerk and mayor pursue the original revival and amending agreement with Canadian Tire without the non-refundable deposit.
Frustrated by the deal, former councillor Brian Swanson urged city administration and council to ensure all future land sale agreements between the municipality and a purchaser include a non-refundable deposit to avoid situations similar to this one.
The original contract was 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, which means the new building could be open by 2023.
The new city council will be sworn in on Monday, Nov. 16.
