SUMMERSIDE – As part of the 2014 municipal budget, the City of Summerside has committed $500,000 towards the development of a land bank.
© Mike Carson/Journal Pioneer
Councillor Peter Holman
Councillor Peter Holman said the plan is to accumulate land and maintain an inventory of surplus land within the city which will be used for attracting commercial opportunities.
“If there is some surplus land that becomes available some where within your municipality, comes up for sale, foreclosure or anything like that, then the city should be looking at purchasing it and possibly sitting on it for some time, and the developing it, making it shovel-ready, then selling off lots at current market value,” Holman said.
He said the land bank could also include residential land for future subdivisions.
“There is some land, but not a whole lot that is available at the moment,” Holman said. “But this is something that you need to build up over years. It’s not something that you just go out and do a massive purchasing of all land that’s available in the immediate area. It’s as the opportunity becomes available.”
Holman said the idea came from one of the Federation of Municipalities (FCM) conferences.
He said the City of Saskatoon started a land-banking program several years ago.
“They were buying a fair amount of farmland that was around the city,” he said. “Some it they sat on for 10 years and then developed it. They made approximately $65 million a year in profit from developing this land.”
He said if the land was developed as a subdivision, the city would install streets and water and were services and then sell the specific lots off at whatever the current market value of a serviced lot was at that time.
“Then take the surplus money that you gather from the sale of these properties and put it back into the land-banking account to allow you to purchase more land,” he said. “Then, as your surpluses accumulate, it gives the city an opportunity to do some type of a major project that it wants for its residents without having to go and borrow money to do it.”
While the city has a limited amount of land available to bank, the prospect of amalgamating other areas is a real possibility.
“Once the new Municipal Act is in, it’s the province’s intention not to force it (amalgamation) on municipalities but in order for municipalities to remain sustainable, they’re going to have to look at amalgamation,” Holman said. “Right now there are 72 municipalities in the province and the government would like to see that reduced to around 17. They’re certainly not going to discourage it and if anybody takes the opportunity to amalgamate with someone they won’t hesitate to allow it to occur.”
Holman said a land bank is a revenue-generator for the city.
“It’s not something where you’re going to make big bucks immediately,” he said.
The councillor said he doesn’t an issue arising between private developers should the city become involved in land banking for its own projects.
“We would end up paying the same going rate for a piece of land that a private developer would,” he said. “The city isn’t going to get any preferential treatment to purchase land. That is not an issue going forward. If a chunk of property became available on Water Street and it was put up for sale, it’s open to anybody to put an offer in to buy it. If someone, privately, wants that piece of land, then they’re certainly welcome to make the offer. However, if private investors do not take an opportunity to do it and the city does – it’s open to whomever. It’s an open-market.”