Posted October 14, 2012
For some time there has been reluctance on the part of many businesses to come to Guelph and set up shop. In fact, there have been two independent consultant’s reports that Guelph city hall is a difficult place to do business.
There have been major corporations wanting to establish in Guelph, thereby creating jobs that have given up dealing with the city. They cite delays in applications, onerous regulations, generally dealing with an attitude that they are being done a favour.
The absence of common sense and good business practices prevails in many transactions. It illustrates that the lack of experience by the administration to act on behalf of the taxpayers instead of their personal agendas.
Here are three case studies that have recently come to light.
The first concerns the former civic museum building. Last summer, two bidders for the property approached the city. One of the bidders was a couple that expressed a desire to convert the heritage building into an arts and media centre for local artists.
The city had listed the property for $949,000 in January 2011, with a broker. In June of this year the city received two offers for the property. One was not identified but the other, Tyrcathlen Partners, made a presentation to a closed session of council that was supported by Guelph Civic League founder, James Gordon.
Yes, that’s the same James Gordon who ran in the last Federal election under the NDP banner. He is an unabashed supporter of Mayor Karen Farbridge.
Council accepted the Tyrcathlen offer, believed to be less than $700,000. Provided the deal closed by July 6. What followed were postponed closings, culminating with a new closing date on November 30, four months later.
Why is the city being so charitable toward this group? With another bid on the property that was considerably more than the Tyrcathlen Partners, why is the city being so amiable and accommodating? Suppose Tyrcathlen cannot close the deal, what happens if the city goes back to the other bidder and offers the property? Why would that bidder offer his original bid when he discovers the low ball bid the city accepted from Tyrcathlen?
This is how political favouritism trumps good business practice and the taxpayers are the victims.
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The second case study is about the sale of city property in the Hanlon Business Park. The city investment in these lands is more than $10 million. Peter Cartwright, the industrial promotion manager, who is selling the property, told the committee responsible that the cost to the city to develop the more than 400 acres was $266,000 per acre.
He said sales have been completed totaling 14.8 acres One parcel of 2.1 acres sold for $265,000 per acre. The other, 12.7 acres, was sold for $255,000 per acre.
The manager told the committee that the city had to competitive with Waterloo Region and the Greater Toronto area.
He is recommending that the council approve a per-acre selling bracket of $300,000 and $325,000.
What future interested organization would pay in that range after knowing that the previous sale price per acre was $45,000 less than the city’s proposed base asking price?
You know, the city would be better off authorizing the sales in the business park to qualified industrial and commercial real estate experts. This would broaden the market for potential clients wishing to establish in Guelph. It will happen without the red tape and delays that has been the hallmark of the city ‘s unsuccessful attempt to sell lots in the park. This park was ready for development three years ago. It’s time to enlist the aid of professionals and get out of the way.
The curious aspect of this is that the city manager of realty services is not involved.
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A final case is the attempt by the city’s waste management to try and keep the recycling waste facility open by importing feedstock from New York State and Michigan. Already the Guelph Waste Management Coalition has protested to the Ministry of Environment that the province’s recycling mandate excludes foreign sourced dry waste materials.
There is a facility open just down the road in Cambridge that electronically sorts recycles waste at a cost much less than the Guelph hand sort operation. Operated by Waste Management, one the world’s leading waste processors, it has resulted in a loss of feedstock to the Guelph plant.
Closing the Guelph sorting facility and sending the recyclable materials to Cambridge would cut the city costs by a larger measure.
Sound like the perfect solution? Unfortunately, the majority of council would not support it because of their desire for Guelph to become the epicentre of waste management, ergo sustainability.
Economics 101, if a plant is unprofitable than sell it, close it or seek a partner to lower costs. It’s a no-brainer.
Please. Three overworked administration buzzwords not to be uttered again: Sustainability, Robust and Strategic.