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Municipal Development Corporation

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CaptainBL

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edmontonjournal.com

Keith Gerein: Edmonton should dig deeper into a Municipal Development Corporation

The City of Edmonton could research a business case for an arm's-length land development corporation, but council appears unwilling
edmontonjournal.com edmontonjournal.com


The article in summary: the city at the very least should consider spinning off lands like Blatchford and Rossdale and Exhibition into a municipal development company.

Sadly yet unsurprising Sohi, who doesn’t have the slightest business acumen bone in his body, commented that Blatchford is basically working well and there is little interest for considering a municipal development corporation...yet the city years ago did something similar with EPCOR (the city got out of the utility business and let a private corp handle it), EdTel (the city got out of the telecom business and let a private corp handle it), and the U of A realizing it is not a developer at its core has set up its development trust.

Why is the city of Edmonton always the smartest people in the room?
 
CaptainBL said:
edmontonjournal.com

Keith Gerein: Edmonton should dig deeper into a Municipal Development Corporation

The City of Edmonton could research a business case for an arm's-length land development corporation, but council appears unwilling
edmontonjournal.com edmontonjournal.com


The article in summary: the city at the very least should consider spinning off lands like Blatchford and Rossdale and Exhibition into a municipal development company.

Sadly yet unsurprising Sohi, who doesn’t have the slightest business acumen bone in his body, commented that Blatchford is basically working well and there is little interest for considering a municipal development corporation...yet the city years ago did something similar with EPCOR (the city got out of the utility business and let a private corp handle it), EdTel (the city got out of the telecom business and let a private corp handle it), and the U of A realizing it is not a developer at its core has set up its development trust.

Why is the city of Edmonton always the smartest people in the room?
Click to expand...
I'm surprised Gerein didn't mention Canada Lands Corporation and Griesbach. Even the feds who love a bloated bureaucracy (and have 50x the resources compared to the City of Edmonton) could see that they have no business in land development.

Much of the local development community has been calling for this for awhile. They argue that the city’s presence in site preparation — installing basic infrastructure such utility lines and roads before selling shovel-ready parcels to developers — drives up costs and puts the municipality in a position of direct and unfair competition with private industry.

At this point, city councillors and managers don’t seem inclined to abandon this line of business, in part because it is one of the few revenue generators the city has beyond property taxes.
Click to expand...

Is the implication here the City uses an unfair advantage in land development via their infrastructure to subsidize their own budget? You would think the City would earn somewhere near the same via dividends from the MDC, if not more if the corporation is successfully ran.
 
CaptainBL said:
edmontonjournal.com

Keith Gerein: Edmonton should dig deeper into a Municipal Development Corporation

The City of Edmonton could research a business case for an arm's-length land development corporation, but council appears unwilling
edmontonjournal.com edmontonjournal.com


The article in summary: the city at the very least should consider spinning off lands like Blatchford and Rossdale and Exhibition into a municipal development company.

Sadly yet unsurprising Sohi, who doesn’t have the slightest business acumen bone in his body, commented that Blatchford is basically working well and there is little interest for considering a municipal development corporation...yet the city years ago did something similar with EPCOR (the city got out of the utility business and let a private corp handle it), EdTel (the city got out of the telecom business and let a private corp handle it), and the U of A realizing it is not a developer at its core has set up its development trust.

Why is the city of Edmonton always the smartest people in the room?
Click to expand...
I don't remember well, but I believe council proposed a municipal development corporation years ago (when Sohi was on council?) and it was the development industry itself that pushed back because they said it would constitute the city getting involved in land development.
 
That's correct, but what they currently are doing is more of a disservice to all.
 
7-8-0 said:
I don't remember well, but I believe council proposed a municipal development corporation years ago (when Sohi was on council?) and it was the development industry itself that pushed back because they said it would constitute the city getting involved in land development.
Click to expand...

this is what happened but the issue arose because the city had determined to sell the Goodridge Corner lands to private developers, this council then reversed that decision (was not an election issue) and decided to develop it themselves through a MDC.
 
northlands said:
I'm surprised Gerein didn't mention Canada Lands Corporation and Griesbach. Even the feds who love a bloated bureaucracy (and have 50x the resources compared to the City of Edmonton) could see that they have no business in land development.



Is the implication here the City uses an unfair advantage in land development via their infrastructure to subsidize their own budget? You would think the City would earn somewhere near the same via dividends from the MDC, if not more if the corporation is successfully ran.
Click to expand...
"At this point, city councillors and managers don’t seem inclined to abandon this line of business, in part because it is one of the few revenue generators the city has beyond property taxes."

This highlighted in bold is what tells me the city has absolutely no business being in any business especially the development business. If they are clinging to this project because it is a revenue generator, not because it is a profit generator, then there is a massive problem.

I cannot imagine this project is making any profit that is going back to tax payers and any NPV of future returns to tax payers continues to be worth less and less the further out this is pushed considering the site has seen a fraction of what was modeled.

Again, you put these and other lands into an MDC that utilizes a similar governance type structure as EPCOR where the city is the sole shareholder and receives a dividend, then the city will see profits, not just revenue ffs
 
IanO said:
That's correct, but what they currently are doing is more of a disservice to all.
Click to expand...
A municipal development corp would be preferable to the current approach in my view and the industry was mistaken to oppose it. Although, as @Oilers99 mentioned, there were unique circumstances surrounding that opposition.

A few years back I did my masters thesis on TOD in Edmonton. I interviewed 6 or 7 developers undertaking major TOD projects to try and understand how the policy and infrastructure decisions made by the City with the stated goal of facilitating TOD were affecting the investment decisions of those actually building TOD. MDCs came up a lot in the research and are seen as an extremely effective tool both for realizing the land use vision and capturing public value. I asked each developer what they thought about the idea in general. All local developers were strongly opposed. Toronto-based developers, Morguard (Bonnie Doon) and RioCan (Mill Woods Town Centre and Jasper Gates), loved the idea and at least one of them took the opportunity to gush about how much they loved working with CMLC.

Sometimes I find the complaining from the industry on this project pretty annoying since they stood against (and still do in some cases) a far superior option. If the current approach in Blatchford has shifted opinions in the industry and an MDC is now seen as preferable, then they should speak up because I think a council majority would form around the idea pretty quickly.
 
IanO said:
That's correct, but what they currently are doing is more of a disservice to all.
Click to expand...
You mean a disservice to the land development industry. Obviously they don't want the city in that game because they'd have less competition. If the city's land development activities generate profit that can be used to reduce the need on property taxes to fund projects, then how is that bad for everyone?
 
Avenuer said:
You mean a disservice to the land development industry. Obviously they don't want the city in that game because they'd have less competition. If the city's land development activities generate profit that can be used to reduce the need on property taxes to fund projects, then how is that bad for everyone?
Click to expand...

While that may be true, they also recognize that the public delivery of services such as this often are inefficient, red tape laden, costly and without the nimbleness of the private sector.

Should AC still be a crown corp? How about Petro Can?
 
Disappointing to see Council not even want to explore this and get more information, be more informed about the benefits/pitfalls and then contemplate things.
image.png
 
IanO said:
Disappointing to see Council not even want to explore this and get more information, be more informed about the benefits/pitfalls and then contemplate things.
View attachment 472063
Click to expand...
Smartest people in the room syndrome. Perhaps they can give the U of A Property Trust group a course on why working outside of your core competency is such a better strategy.
 
IanO said:
Disappointing to see Council not even want to explore this and get more information, be more informed about the benefits/pitfalls and then contemplate things.
View attachment 472063
Click to expand...
For reference and example, here are a few municipal corps both big cities (Toronto) and smaller cities (Oakville), as well as the federal version which has done a lot in Ottawa. Calgary's MDC has been very very successful at developing their East Village, which anyone who has been in that area can see. But dont tell the city of Edmonton that because they have smartest people in the room syndrome.

https://www.calgarymlc.ca/#home-intro

https://www.toronto.ca/city-governme...front-toronto/

https://www.toronto.ca/city-governme...lands-company/

https://oakvillemdc.ca/

https://www.clc-sic.ca/
 
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