Across Campbell Road, south of Anthony Henday Drive, an industrial monolith is taking shape. While construction has slowed for the winter season, the Rampart Industrial lands, stretching from Campbell to 142 Street, represent more than 100 hectares of prime land for both light and medium industry.
It also represents millions of dollars of investment by one developer. On the east side of 142 Street, running all the way to 127 Street, is a second tract of land, almost 200 hectares in size that this same developer is preparing. While Goodridge Corner will be more of a mixed-use area, it will cost many more millions of dollars to service and prepare when the time comes.
The developer of both areas is different from other companies — it is not private but public. Specifically, it is the city of Edmonton, which, with its land enterprise arm, actively purchases and develops land throughout the city for specific uses. Douwe Vanderwel is the acting director of land services, a St. Albert resident who works as a developer for Edmonton.
"It's an opportunity for the city of Edmonton to develop its own land and, when it does that, it does that as a developer so even though I am a city employee, I am working as a land developer," Vanderwel said.
Both developments along St. Albert's fringe fall under Vanderwel's jurisdiction. And both represent a fundamental difference in how Edmonton develops its non-residential land compared to the city of St. Albert. While each approach has its advantages and disadvantages, the goal is the same — making money on industrial development.
Money in, money out
Mayor Nolan Crouse was clear on Wednesday morning as he presented his 20-point plan to a gathering of local businesspeople — St. Albert needs non-residential investment if its going to grow and unload the residential sector of some of the overall tax burden. But as city council eyes a late-April vote on where it will next locate a large bank of land for light industry, the reality of what St. Albert can do is starkly different compared to Edmonton's approach with its Rampart Industrial development.
"It's not like we're not doing anything — we are," Crouse said in a later interview. "We're just not going to do everything. The landowners have to be a part of that."
Simply put, St. Albert doesn't have the cash to develop land like Edmonton does. Purchasing raw land, then putting sewer, water and stormwater infrastructure in place, as well as roads, is expensive. That's why, late last year, Genstar senior development manager Jim Pennell warned council against locating land too far from the city's existing services. One option being considered, located at the city's western edge, could cost as much as $10 million to service, Pennell told council.
"I just don't know who would step up to front that kind of cost," he said.
So if private business is shy of investing capital in servicing, a city the size of St. Albert would be hard-pressed to find the cash to do it. The city has already tried once to develop land — in North Campbell. Last decade, the city said it would service lots in the area and then sell them. When the total cost came to light, the council of the day quickly sold the raw land off to Paul Wong of PJSJ Holdings, who said he would service it.
"The ideology starts to fit in – should government compete with the private sector?" Crouse said. "Whether we do that again is not something this council is going to put money towards. This is private development."
But for Edmonton, buying and selling land provides an additional revenue stream, Vanderwel said. Approximately 25 per cent of the revenue generated from the city's land sales is pumped into Edmonton's general operating revenue, with the land enterprise department banking the rest for future purchases and development. With a significantly larger population, Edmonton can afford to invest that money.
"That enables the city to purchase and acquire other lands for the purposes of development," Vanderwel said.
High supply
Edmonton's industrial land strategy dictates the city should try to have at least a three-year supply of shovel-ready land for sale at any time. Getting to that point Vanderwel says, isn't just expensive, it's time consuming.
"It does take some time to get land developed, no doubt about it. So if you want something developed three years from now, you need to start now," Vanderwel said.
Rampart will be developed in three phases — the southern-most area first, as it's closer to Edmonton's existing services, followed by one smaller area and a larger third. At full build-out, Rampart will offer approximately 130 hectares of industrial land with lots as large as 15 hectares.
"When it comes to priorities, it's in part market-driven. We're not going to develop land that will never sell," Vanderwel said.
According to St. Albert's future study areas report, the second of two reports commissioned, the city has 12 hectares of shovel-ready land available, with 67 net hectares of vacant, designated land ready for servicing. How long that land will last is open to interpretation.
Developers such as Genstar and the Urban Development Institute (UDI) use the historical absorption rate, which states that amount of land can last for 25 to 35 years. Using the forecast cited in the city's future industrial land requirements study, at approximately 18.7 hectares a year, that land would be gobbled up quickly.
But Crouse conceded one point at Wednesday's breakfast – even though St. Albert might have almost 80 hectares available in one state or another, it does not have lot sizes large enough to accommodate potential clients.
"If you want to put a 40,000 or 50,000-sq.-ft. warehouse, where would you put it? There is nowhere to put it," he said.
Council wants to add 283 hectares of contiguous land to the equation — it's just a matter of where. The future study areas report delivered last winter calls for using a large swath of land in the city's west end. A decision on whether or not that will happen will take place in late April, after council deferred its decision to consult with other developers and landowners.
Regardless of what council decides in the spring, it is doubtful St. Albert will start playing developer. As Guy Boston, general manager of planning and engineering describes it, St. Albert will designate the land. What happens next will be up to the developer.
"We're identifying the location. It's not the city's land," Boston said. "We just designate it and then we're looking to the landowner."
That's all the city can do, Crouse said. St. Albert can build some roads like Ray Gibbon Drive or LeClair Way and front-end some servicing, but it will need to recoup those costs through off-site levies. The city can make development easier, but it can't play the role of developer.
"Our job is to make sure we help them, make sure we facilitate things to the best of our ability and remove barriers, but we are not going to be the leaders in running water, sewer, roads and building intersections," Crouse said.
Not every municipality has a war chest like the city of Edmonton, Vanderwel said, but all face the same question — how do you make your vision a reality with the resources you have?
"It's one thing for municipalities to have a vision and that's a good vision to have. It's putting it into action and getting things in the ground, have people use the land as you envisioned," he said.
"That's the real challenge for St. Albert, and for anyone, really."
