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RFD- 4135 Business Items   Item #:   4. a.    
Committee of the Whole Meeting Agenda
Meeting Date: 01/18/2021  
Title:    Industrial Land Strategy - Walker
Presenter: Dave Walker
Department: Economic & Business Development  
Strategic Vision Element: Where People Choose to Grow a Business - A strong, diversified business centre Related Goal: Spruce Grove has a robust, growing economic base that generates increased revenues to support the City’s high standards for services and programs.

Information
Request for Decision Summary
The City has a declining supply of serviced industrial land which is affecting our ability to attract new industrial investment.  As a result, an Industrial Land Strategy has been developed which assesses the situation and provides a range of options to address the issue.  

Proposed Motion
 
That the Industrial Land Strategy as presented by Altus Group be accepted as information.
Background/Analysis
Spruce Grove has been experiencing a declining supply of serviced industrial land, particularly larger parcels of 10 plus acres, which is affecting our competitiveness in attracting new industrial investment.   Council approved an initiative in the 2019-21 Corporate Plan to assess the situation and develop a strategy to help the City increase the supply of serviced industrial land.  
 
Altus Group was retained to prepare an Industrial Land Strategy which was completed in November 2020.  The objectives of the Strategy are to:
  • Provide the City a better understanding of the existing and future state of the region’s industrial sector, and the current supply and demand characteristics of the City’s industrial lands;
  • Help the City respond to future forecasted demands for industrial lands; and
  • Provide options for ways the City can increase the supply of serviced, ready-to-go industrial employment lands.
As part of the strategy, a Cost Model was developed to determine the costs of acquiring and developing vacant land into serviced industrial lots. The average costs consider both urban and rural development standards and include cost of land, off-site levies, servicing, stormwater facilities, grading, access, fibre optics, etc.  
 
The Industrial Land Strategy sets out a range of options for the City to consider to increase the supply of serviced industrial lands.  These options have categorized into the two broad approaches as follows:
  • Approach One: Incentivize investment in Spruce Grove by existing and new industrial land developers through a combination of policy and regulatory changes to enhance the business case for developing industrial lands.
  • Approach Two: In addition to the options identified for Approach One, this approach takes the additional step of having the City take a more direct role in the acquisition and development of serviced industrial land.
Ultimately, a combination of these options may be necessary depending on how the market responds to the need for increasing the supply of serviced industrial lands to meet potential demand.  The impact of Covid-19 has slowed absorption in 2020 but this is expected to quickly rebound as the economy starts to recover.  As of 2020, there are 109 net acres available which works out to roughly a 4.5 year supply of serviced industrial land.  A significant portion of the vacant land (43 acres) is encumbered by pipelines or has other issues such as the extensive use of cul-de-sacs which affect its marketability.  This combined with other factors that are identified in the report result in little selection for potential developers/owners particularly for larger parcels.  
Options/Alternatives
The Industrial Land Strategy sets out a range of approaches and options that could be considered by the City to increase the supply of serviced industrial land.  Council will have the opportunity to provide feedback on the options presented and Administration will return to Council at a subsequent meeting with recommendations on how to proceed.  
Consultation/Engagement
As part of the strategy development process, the consultant and City project team conducted interviews with a number of relevant stakeholders.  These included industrial land developers active in the Spruce Grove market, industrial land developers active in Acheson and other markets within the Edmonton region, land owners, real estate agents/brokers, municipalities, industrial building investors, NAIT and City Administration.
Implementation/Communication
There is an approved initiative in the 2021-23 Corporate Plan to develop a business plan for implementation of the Industrial Land Strategy.  This will be based on direction and recommendations approved by Council.   
Impacts
Without a competitive supply of shovel-ready industrial land, it will be increasingly difficult for the City to capitalize on industrial investment opportunities and the adverse consequences for business attraction and expansion.  This in turn reduces local employment opportunities and directly affects our ability to grow our non-residential assessment base which is important for the financial sustainability of the City.  
 
The implementation of an Industrial Land strategy will help ensure that Spruce Grove has adequate serviced industrial land in both the short and long terms, and allows the City to remain competitive in attracting industrial investment.  

Financial Implications:
The cost of implementing the recommendations resulting from the Industrial Land Strategy will be estimated as part of the Implementation Business Plan to be developed in 2021.  
 
Attachments
Industrial Land Strategy Presentation - Altus
Executive Summary - Industrial Land Strategy

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