Underwhelmed
With its starry-eyed projections out of the way, it’s time for the green development to either soar or stall
edifyedmonton.com
1.
"Updates from City administration, for example, report that the City has invested over $186 million into Blatchford and seen only $38 million in the way of revenues. While those would be eye-watering margins in the private sector, the project has the benefit of an abnormally resilient developer in the City. Stevenson characterizes that ability to brave losses as evidence of the City’s “extremely patient capital” and further evidence of why it — and not private industry — is best positioned to assume the risk of developing Blatchford." - This is exactly WHY a city SHOULD NOT be in the development business - its not their capital to be patient with, its tax payers capital. Land development takes years and years and years and is very specialized and requires developers with large pockets i.e. Brookfield, Anthem, Qualico who continue to turn profits doing what they do best. No developer that is accountable to capital holders would ever say "See, we are good at doing this because we can brave losses". That's only a statement an entity can make when it has endless amounts of capital. Words by Anne only a true bureaucrat would dare speak and understand.
2. I am working on a few land development projects that have been ongoing before COVID, that have started around the same time as COVID, and are just starting up in both Calgary and Edmonton. You know what none of the developers have told me? That COVID has slowed down their timelines and today they are still impacted by that. Land development is a lonnggggg game and specifically I can think of one project I have worked on that is over 500 acres in size that received all its necessary pre sales from home developers to qualify for financing all throughout 2020, 2021, and 2022. The City needs to get over this excuse of COVID.
3. There is literally nothing in Blatchford for amenities today. If the city really wanted to speed up development, develop the retail and / or amenities upfront. This would allow home builders to see the attraction of reasons to buy land there and draw more people to the area. Building amenities upfront typically results in more attraction to a land play like this.
4. If the group (City Admin) that made aggressive timelines to development and has executed on 50 homes is the same group that is still at the helm of the development doing the same thing except telling everyone to ignore the initial timelines, how will this change?
5. As of June 2023, Edmonton and area absorbed 3,527 single-family homes YTD and in 2022 absorbed 6,293 homes, which are strong numbers driven primarily by increased emigration into Edmonton (and Alberta). Blatchford has absorbed a total of 50 homes since inception. If the strong emigration numbers supported by relative affordability of Edmonton cannot accelerate this development then you can be sure nothing will and this will continue on at a pace of 10 homes per year. If I were a debt provider or an equity provider and this was a private development, I wouldn't touch this with a10 ft. poll, you wouldnt get your money back in 100 years.
