Carpere Canada should have paid the City of Moose Jaw $7.9 million for land purchased in the Southeast Industrial Park by today, but that deadline expired with nary a penny given.
Instead, city council has decided the company should receive an extension on the deal.
During its Oct. 28 regular meeting, council voted 6-1 to have the mayor and city clerk authorize amendments to the purchase agreements with Carpere for property in the Southeast Industrial Park by amending the closing date in each agreement to Feb. 28, 2020 from Oct. 31, 2019, and to consider any other additional amendments to the purchase agreements to make it easier for Carpere to reach the Feb. 28, 2020 closing dates.
Council also voted to have the mayor and city clerk pursue the amendment agreements for both the industrial and residential lands upon review and approval of the amended agreements by the city solicitor.
Coun. Brian Swanson was opposed.
Council discussion
The extension could offer more time to Carpere so it can prepare for the land development process, said city clerk Myron Gulka-Tiecho. The extra time would also include registration of subdivisions with Information Services Corporation (ISC) and receiving the necessary approvals from the Ministry of Highways and Infrastructure.
The Southeast Industrial Park is currently just a farmer’s field but significant work — installation of water and sewer pipes — is being performed on the adjacent road, said Swanson. He thought no work was supposed to be done until a primary tenant was in place; that idea has been thrown out the window and the municipality is spending provincial and federal grant money to undertake that work.
Carpere was supposed to pay $7.9 million by Oct. 31 for the 312 hectares (780 acres) it purchased based on its contractual obligations, Swanson continued. Instead, a special meeting was called on Oct. 23 so council could consider a request from the company for an extension. He recalled council having three special meetings to extend the agreement for the pea plant.
“One thing we’re good at in Moose Jaw is providing extensions to contractual agreements, that really have resulted in nothing,” he said. “In the real world, if you have a contractual agreement … and you don’t (pay), there is a cost to you. I would suggest that there be a cost to Carpere.”
Swanson then put forward an amendment that the contract extension only be granted upon Carpere paying an additional $100,000. He pointed out if city council received the $7.9 million, it could put that money into the bank and start earning interest. However, waiting until February to receive that payment means Moose Jaw is losing out on extra money.
“If we just give out extensions like they’re water, then what good does an agreement with Moose Jaw really mean?” he wondered. Any company could sign an agreement with the municipality and it would be OK to miss a deadline since city council would likely grant an extension without a penalty.
“We should put some metal into our backbone when it comes to having agreements with third parties and indicate that extension has a cost to it,” Swanson added.
Council did discuss the concerns that Swanson raised during its special meeting, but decided there should be no cost for this type of extension, said Coun. Dawn Luhning. Since the municipality has an agreement with Carpere, it would be difficult to put a price on this type of extension.
Council then voted 6-1 against Swanson’s motion, followed by another 6-1 vote in favour of officially approving the extension.
The next regular council meeting is Tuesday, Nov. 12.
