Town makes another offer on IGA building

Posted By Dan Schell

Posted 3 months ago

It is the second try for the Town of Bancroft as they move forward with the grace of the municipal council with negotiations with grocery chain Sobey's for the purchase of the old IGA building located along the York River. Though, the price has to be right and there is signifcant difference on both sides of the discussion.

Sobey's is currently asking for $1.65 million for the property, including the vacant complex that currently sits on the space. This is a significant drop from the previous negotiations with the company when the Town of Bancroft was looking to purchase the building for an offer of $1.75 million, at a list price of $2.3 million, to make a new room for the municipal offices and public library.

But, for Larry McTaggart, Chair of the Build Bancroft Core Committee and Deputy Mayor of the Town of Bancroft, the tag is still too high despite the drop.

"We are not planning to pay that, don't assume that is what we are going with," says McTaggart. "The property, as we envision it, does not have the current building there and that is why the quote is what it is."

The offer that he refers to is the Town of Bancroft's offer of $750,000 for the property, with the inclusion of a sponsorship program to the tune of $250,000 in public exposure efforts for Sobey's.

McTaggart says that this offer has been turned down by Sobey's, but is still on the table as different options are being discussed between the company and Barry Wannamaker, Chief Administrative Officer for the Town of Bancroft.

With the current economic climate setting real estate values lower and the price of the property at clearence cost, the Deputy Mayor feels that despite the difference in opinion, it is the best time for the municipality to attempt to purchase the central property. In particular with a significant amount of work being done surrounding the extensive, multi-million dollar redevelopment of the downtown core of the community.

Though he admits that it wasn't on the agenda for the Build Bancroft project in this initial stage to begin purchasing property within the focus area set out by the designers in the preliminary plans, the timing just seemed to be perfect that the property go on the market once again.

"We just were not going to jump into the purchasing of land for the project," says McTaggart. "There are no funding dollars available at this time for land purchase and we are not at that point in the project where we are looking to purchase a bunch of properties."

"But, if it becomes available now, we need to look at what we can purchase."

Before the municipality jumped to the table with Sobey's, the Deputy Mayor says that research was completed in order to ensure that the purchase of the property could financially be supported through the current budget.

In the 2009 budget, the Town has earmarked $750,000 specifically for the purchase of the IGA property if and when the space became available. But with the asking price currently sitting currently at $1.65 million, McTaggart explains that the Town has the borrowing room to look for a loan to add to the strength of their offer.

"Interest rates are low right now, which was a point that did lead us to believe that this was a good time to enter negotiations," he says. "But, we are negotiating what the final cost will be and if it remains where it is, there won't be a deal."

As for other funding opportunities that might be made available, McTaggart explains that without the studies that are currently being reviewed by a number of firms that are reviewing what they can do as a part of the Build Bancroft project, there is little information to use in order to apply for any dollars.

One study that he sees as pivotal if the group would embark in looking for funding would be the business case that is being completed for Build Bancroft. The study will look at the project as a whole in order to see if it is feasible for the municipality to move forward with using a review of how it will impact the local economy.

Without those numbers, it is hard for the group to go to senior-level government for support which could have alleviated the potential financial burden that would be placed on the taxpayers as a result of borrowing money.

"If we had that information, money might have been available, but when we have the information it will be beneficial if the property is still for sale at that time," McTaggart says. "However, we do have the borrowing capacity if we need to go that route, unfortunately putting the carrying costs of the interest of amount borrowed on the ratepayers."

Within the preliminary plans, the Build Bancroft project has the space slated for the construction of a multi government complex. The building would include a new town hall for the Town of Bancroft, as well as space for both federal and provincial government agencies that will be approached to partner with the construction of their new home.

However, with the land not in the hands of the municipality as of yet, future plans for what the Town is looking at as a long-term investment sit in the wings.

"We will just have to wait and see what happens," says McTaggart. "But, it would be a real shame to lose that piece of property within the heart of our town."