If St. Albert is not viable, what has to change?

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Previous articles have talked about the 80/20 goal and the high cost of residential growth. So what does St. Albert have to do to become more sustainable? According to the Cost of Community Services studies outlined in the last article, St. Albert needs to make changes in the way it goes about its business and must attract more industrial type businesses.

The fundamental change that needs to occur is attitude! There has to be concurrence across the entire city that business and industry is needed, and is welcome in St. Albert. Over and over, it has been said that St. Albert is not business friendly.

A marketing and communications audit, conducted in 2000 by Downey & Associates, interviewed developers and realtors in the Edmonton region to determine the perception of doing business in St. Albert. Numerous issues were raised and recommendations to address these were submitted. In 2004, a follow up audit was conducted to measure any progress from the previous report. In 2009 industry, developers and realtors were again asked about the perceptions of doing business in the city. Each of these studies identified barriers to developing in the city, but progress on resolving these appears to be slow.

The St. Albert Chamber of Commerce became concerned about the lack of non-residential development and initiated a number of round-table discussions with local business to find out the pros and cons of doing business in St. Albert. Council was invited to “observe” these meetings but was encouraged not to debate the issues, but listen and learn how things might be improved. The wheels of bureaucracy are churning, but positive results are slow in coming.

Council has lamented the fact that industrial properties were not being developed in a timely manner. Instead of being the sole developer (and marketer, sales agent and regulator) of industrial land, the city sold its remaining undeveloped industrial lands to PJSJ Holdings who subsequently invested millions of dollars in servicing and marketing the land in north Campbell. Sales have followed, but not nearly as quickly as hoped. Recent changes to the Land Use Bylaw that opens more opportunities for businesses to operate in this park have helped accelerate the interest from business, resulting in increased sales activity. These changes, approved in 2012, were originally recommended by Business and Tourism Development in 2006.

In 2011, council approved the City of St. Albert Future Industrial Land Requirements Study to determine the amount of industrial land that would be required to meet the needs over the next 20 to 40 years. This study not only looked at historical absorption rates of industrial properties in St. Albert, but also looked at the opportunities provided by the energy sector (oilsands and upgrader developments) transportation and logistics (with the completion of the Anthony Henday), and other factors that impact development, including permits and processes, availability and price of serviced land and types of uses allowed on the lands. The study recommended 290 to 362 gross hectares of additional industrial land would be required to meet the city’s needs over the next 25 years.

Council unanimously approved a motion on Aug. 15 that administration identify 260 to 300 gross hectares for future industrial land use. Shortly thereafter, on Sept. 6, council passed an amendment to the Land Use Bylaw that would change the existing 5.49 hectares of industrial land in South Riel to retail, once again demonstrating little conviction in meeting the industrial land needs, leaving the city with very limited land for industrial use.

Council, in accepting the report, was worried that the provision of industrial zoned land would forever change the face of St. Albert, fearing the land would become home to “smoke-stack” industry. The City of St. Albert Economic Development Master Plan (2004), the Business and Tourism Development Long Term Department Plan, (2009) the Business Attraction Marketing Strategy (2009) and the Industrial Land Requirements Study (2011) all identified the types of industry that would be suitable for St. Albert, none of which were considered smoke-stack industries.

So what is “industrial” development and why is it so important? In the previous article, the Cost of Community Services studies indicated that industrial properties had the best return to the municipality’s coffers. For every dollar collected in taxes from these properties, the study suggested that the cost to provide services to these properties was somewhere around 20 cents. Conversely, for every dollar collected from residential properties, it cost the City $1.81 to provide services. Therefore, it should be concluded that industrial development will greatly assist the city in balancing the taxes and reducing the burden on residential properties.

Industrial businesses can be ‘clean’ and should not have an adverse effect on the city. Just take a look at development occurring on St. Albert’s borders, especially along 184 Street, 170 Street and 156 Street in northwest Edmonton. These types of ‘industrial development’ for the most part are compatible with St. Albert, if sufficient land is available and properly zoned. Most of the developments occurring in northwest Edmonton were not permitted in the business park zoning. Most of the industrial growth occurring on our borders was deemed not desirable for our city. The City of St. Albert Land Use Bylaw defines light industrial as a development used for manufacturing and warehousing where any actual or potential nuisance factor generated by the development is contained within an enclosed building but excludes bulk oil and chemical processing. This is a fairly common definition in the region and would accommodate the types of industry that were identified in the numerous studies mentioned above. Based on the definition, it is safe to say industrial development will not adversely change the face of St. Albert as feared by some council members.

Other than the obvious tax benefits from industrial development, why is it so important for St. Albert to compete with its neighbours to attract its fair share of these companies? Industrial type businesses tend to export goods and services beyond the immediate region, thus generating new wealth coming into St. Albert.

As well, industrial businesses tend to have a higher economic multiplier. For every $1 of Gross Domestic Product (GDP) generated in the oil and gas sector, an additional $1.94 in GDP is created throughout the supply chain in the province. Industry sectors identified as targets in the Business and Tourism Long Term Department Plan were predominantly export related and had healthy economic multipliers. On the other hand, retail and service sector jobs, tourism and health care had much lower economic multipliers. (The highest economic multipliers were found in the manufacturing sector (2.25), finance, insurance, real estate (2.30) and construction (1.87)

Industrial businesses tend to pay higher salaries and offer employee benefits. Attracting industrial business operations will attract primary wage earners to the community. These employees will have more purchasing power, with the ability to make larger purchases from the local retail shops. Perhaps these employees may also bring families to St. Albert. These family members will also spend money in local shops and may provide the necessary labour to help staff these retail and service outlets. Without a primary wage earner, it may be difficult for a family to be able to afford to reside in St. Albert, requiring additional labour for retail to be brought in from Edmonton or beyond.

To become sustainable, and reduce the tax burden on residential property owners, St. Albert must welcome industrial development and immediately take steps to ensure that these businesses will be accommodated by designating adequate amounts of land, developing business friendly processes and zoning, and demonstrating to industry, developers and land owners that there is a true commitment to industrial development in St. Albert, and will no longer just pay lip service to this critical need.

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