Why a city land corp might be Regina’s next political fight

CITY by Wanda Schmöckel

Mayor Fougere - photo Darrol Hofmeister

If there’s one thing we can say for certain, it’s that Regina is going to see some development in its southeast sector: up to 980 housing units in 128 acres of currently city-owned land. How that will happen is also a fairly sure bet — we’ll be contracting a private land developer to help manage the project.

Opinion on how this development should happen, however, is less than unanimous.

Last year, the city’s administration recommended that the city establish a Municipal Land Development Corporation (MLDC), but that was sent back by executive council last September.

Another report from administration — initially expected in early 2015 — has yet to surface.

“That was on my recommendation,” says Mayor Michael Fougere. “Previous to any consideration of a MLDC, after we purchased the southeast lands, council had asked for options for how to develop the land. And what got wrapped up in this was a proposal for a [MLDC]. I’m not sure that council has an appetite for a land development corporation.”

Fougere says the executive committee wanted to separate the two issues; to deal with the southeast lands first and then — eventually — look at the possibility of a MLDC.

“I think it’s fine that they’re handled as two separate issues,” says councilor Shawn Fraser. “But it’s a pretty big decision. The southeast lands would require about $28 million — at least — in investment to maybe clear $60 million in profit. And given the MLDC report is going to come back to council, in my mind it would make sense to have a public debate about it and then decide how we’re going to proceed.”

The land in question is actually a portion of 238 acres that was bought from the Saskatchewan Housing Corporation in 2012 for $7.3 million with the expectation that revenues would be reinvested in the Social Development Reserve (SDR). Fougere, however, couldn’t say what percentage of revenues earned on the development of the southeast land would be allocated for the SDR versus covering the city’s infrastructure costs.

“We haven’t made a decision on that yet,” says Fougere. “But, generally speaking, revenue that is surplus to operation in land development goes to the reserve. There’s nothing in the report that talks about where that goes.

“The Regina Regional Housing Builders Association (RRHBA) felt that the profit made should go back into infrastructure, but we’ve made no decision,” he says.

Fraser, however, says what’s best for the RRHBA isn’t necessarily what’s best for city. He also says there’s a good case to be made for the establishment of a MLDC.

Those reasons include greater transparency, a more stable and badly needed source of revenue for rising infrastructure costs (which taxation alone can’t realistically cover), and more control by the city over the development of key neighbourhoods.

They’re all arguments to put the brakes on developing this particular parcel of land until the public has had a chance to weigh in on a land development corporation.

“It shouldn’t be our intent to slow-up development, but the fact is right now we have about 10 or 12 neighbourhoods under development, so to hold this neighbourhood up for a bit doesn’t mean it’s going to jack up house prices,” says Fraser. “It just might mean that those [other] neighbourhoods will fill up a little faster.

“We just passed Westerra a couple of months ago. There are plenty of new neighbourhoods around the city,” he says.

When it comes down to it, the decisions made around the development of the southeast lands are about vision and ideology. If one holds the opinion, as mayor Fougere appears to, that the private sector is in the best position to develop the city’s land, then a MLDC might not the way to go.

But other cities do operate MLDCs — or variations on them — and reinvest the profits from those developments back into their own coffers. Saskatoon, Calgary, and Edmonton are examples.

“I’m in favour of a land development corp.,” says councilor Mike O’Donnell.  “I’ve been watching the City of Edmonton, which now has the ability to develop a large scale area. They can create an ideal neighbourhood, making sure there are a variety of housing affordability types. And they can engage the community in terms of how, when, and in what formats some of these things should occur. We’d have the ability to generate revenue — which is very limited in a municipal setting — and we can engage publicly in all sorts of ways to make sure neighbourhoods meet the needs of the community at that time.”

One of the reasons executive council says it’s reluctant to pursue a MLDC is the amount of land owned by the city — somewhere between five to seven per cent of the land holdings under the potential 300,000 population growth projection.

And, given the relatively small number of developers operating in Regina, some local developers and the Regina and Region Homebuilders Association (RRHBA) have indicated that this will add more competition to an already tight market.

“There hasn’t been, in my mind or council’s — because we haven’t discussed it — a clear view of the benefits of a MLDC when we own five per cent of the land,” says Fougere. “It’s not our core business1. What was recommended to council is we have a developer help us [develop it]. This is the same process we had when we partnered with SHC and a private developer to develop the lands for Windsor Park and the Greens on Gardiner.

“So, this is what we’ve done in the past,” says Fougere. “We’re not delving further into the development industry.”

But, as Fraser points out, the City of Regina is already, and has been, in the land business with sites like Taylor Field and the CP Railway lands to be developed in the future, and Windsor Park and Hawkstone already underway.

“I really want there to be a public debate about this,” says Fraser. “In the grand scheme of things, as far as direction for the city goes, and building a good city, this is probably the most important issue that council will face.

1. It’s perhaps worth pointing out that the City of Regina isn’t a business at all but, rather, a city with a responsibility to its citizens. And as far as its “core business” goes, neither is it expressly the business of a city to build football stadiums, but that’s happening with great enthusiasm from both city administration and council. Surely the establishment of a revenue-generating MLDC could be interpreted as every bit as visionary — maybe even more so — than the construction of a money-hemorrhaging stadium?

Fougere suggests that’s not a fair comparison. “It’s a stretch to talk about the stadium in this context,” Fougere says. “I’m not saying we’re not involved with the development of land, we’ve done that with our industrial land for quite a while. I’m just saying that council has not made a decision about a MLDC. So, it’s hypothetical to debate whether it is or isn’t core business.”