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Update: March 5 Meeting and The Old Fire Hall

Last night we had a special Council meeting to discuss a potential sale of the old Fire Hall.

For me, this was the hardest decision I have made on Council. I’ve been going back and forth and losing sleep on it for some time. It was also one where I went to our meeting with a still open mind.

Following is what I was thinking about during this meeting. As always, all opinions or mistakes belong to me and me alone, not to the rest of Council or to City staff.

What Was Decided

If you haven’t already, I would encourage you to read my last post by clicking here. It has background information on this building and on our Request for Proposal (RFP) process.

Last night, a motion was made to “cancel RFP 46-103-17 based on new info provided [as] it is not in the best interest at this time.” Essentially, this was a motion based on information Council received, to stop the sale and retain the building for now. This motion passed 5-3: I was one of the "yes" votes.

What Was Being Considered

When a Request for Proposal (RFP) is issued, the considerations that will be taken into account are clearly laid out before bids are received. Each bid is given an objective score based on how well it meets these considerations. At that point, Council does not realistically have the latitude to consider other factors. It needs to decide whether the highest scoring bid returned a high enough value to justify selling. If Council is satisfied with this bid, it can accept it. If Council does not feel any bids returned a high enough value based on the scoring criteria, it can refuse all of them by cancelling the RFP.

In this case, the scores given to bids primarily considered the proposed purchase price and how much a proponent hoped to raise the building value by through renovation.

Looking at the Numbers

Looking at these criteria, I was not ultimately supportive of going forward with a sale. The building currently has an estimated appraised value of $1.22 million. The highest scoring bidder offered $855,000 for the building. This means that by our best estimates, we would’ve been selling it for $365,000 below value. I’ve been uncomfortable with this all along.

I expressed this discomfort in my last blog post. However, I was still leaning towards voting in favour of a sale. But then I dug into the tax revenues we might realize from this building.

At today’s tax rates, the City receives approximately $15,450 in tax revenue per million dollars of value a commercial building has.

The building is currently appraised at $1,220,000. Initially after sale, property taxes would be based on this value. In 2-4 years, the taxes would be increased due to the proponent’s renovations increasing the building's value. The proponent estimated that they would bring the building value up to $5,500,000. However, a third party estimate which the City commissioned found that a more likely value was $3,400,000. Using today’s tax rates, here are the approximate revenues these values would return to the City and their total impact after taking lease costs into account.


This sale was certain to work out to a net operating loss for at least a couple of years.

In the long term, our best case scenario was that we would receive net revenues of $35,000 per year on this sale. However, I do not believe it was likely that the proponent would realize their full estimated value nor that we would find leased space for our lowest estimated cost. On an annual basis, we were likely to continue seeing a net loss. This would be on top of the $365,000 below assessed value which we received for the building.

I do not believe that cost should be the only factor considered when the City is selling property in a strategic area. Other benefits should be taken into account. However, at this time I do not think the cost of additional benefits is worth the loss the City would have taken on this sale. Additionally, the RFP issued primarily considered sale price and economic impact above other benefits.

Final Thoughts

I wasn't comfortable with awarding this RFP from the first time I got a look at it. But generally, I think a new Council should follow through with the processes initiated by the previous Council- it should only override them when it is extremely uncomfortable with where they are leading. My tendency to support the previous Council's work led me to be leaning towards voting in favour of the sale.

However, I spent a lot of time looking at and thinking about this. And the more I looked at the numbers, the more my discomfort grew. In the end, I didn't think the bid we were considering justified selling. Our previous Council initiated an RFP that primarily looked at sale price and economic impact. Based on these, the numbers didn’t work out in a way which satisfied me.

I appreciate Equity Rental’s (as well as Grain Bin’s and Design Work’s) willingness to invest in this area of town. And cancelling an RFP of this magnitude is something that I think should only be done with very solemn deliberation. But accepting the offer before us was not in the best interest of our community. It was a very hard decision, but I ultimately supported holding onto the Fire Hall for now.