The 152 Shanley Saga (fall, 2017)

As most residents are aware, the city of Kitchener’s attempt in April of 2017 to sell 152 Shanley has failed. I wish this failure was a surprise but given the constraints placed on the sale by municipal and provincial regulations, and the city’s particular method of promoting the property, failure seemed inevitable.

As documented in The Record here the minimum bid for the property was just over one million dollars which is the total amount owning in back taxes and various By-Law infraction charges (for the past several years the city has been trimming the trees and bushes and generally maintaining the property because the owner refuses to perform those tasks).

As the Record article above states, tax sales are “very tightly regulated under the Municipal Act and a municipality isn’t able to accept any bids that don’t cover the costs of all taxes owed on the property, as well as the costs of running the tax sale.” The sale had only one bid for $200,000 which was rejected.

If the city were allowed to accept that bid, and the new owner cleaned up the land and build a condo unit that, eventually, generated taxes we would all be better off in the long run. But that is not the case and of course we do not know how feasible the lone bidder’s development plan was for the site.

WHAT’S NEXT?

Once the initial tax sale fails, the city has an option to hold a second sale where the property can be sold for less than the taxes and fees owning. But this process is not automatic and requires city staff to organize it. Our councillor, Sarah Marsh, has stated she is pushing this option at committee meetings but even if it does go ahead, it will take some time. For example, this article

https://www.therecord.com/news-story/6227791-kitchener-to-put-contaminated-factory-site-up-for-sale/

in January 2016 describes the “upcoming” tax sale that did not happen until over one year later (April 2017). And that is with everyone at the city on board!

MHBPNA contacted the city towards the end of 2016 and again in 2017 to get an explanation for the delay. The response was that interest had been shown in the property and the city wanted to give those potential bidders more time to develop their proposals.

The key to a second sale is to find a bidder with a solid plan and the finances to manage both the cleanup of the contamination and the site’s development which will take years. The environmental issues are regulated at the Provincial level (Ministry of the Environment) and the developer must first have a cleanup plan approved before any work can be done.

So if everything goes smoothly at city hall, it will probably be at least two years before we see another sale. And if that was successful, it would be another couple of years minimum before the cleanup and development plans were approved and the site remediation begun. We don’t know how long the cleanup would take, or how it would be integrated with the construction but I estimate at least a couple of years for that phase. So if everything snapped into place (which has not happened for the past 30+ years) an actual building might be erected by 2022 at the earliest!

Since Blog articles should be short I will end here. But I’m writing a second article that backgrounds several of the “issues” involved in selling the property. Stay tuned!

Ted Parkinson

6 thoughts on “The 152 Shanley Saga (fall, 2017)

  1. Ted … thanks for keeping us up to date on the Electrohome building … needless to say the neighbours have been fighting this battle to get the building sold or torn down for almost 20 years. It totally confounds me that bureaucracy at all levels (Provincial and Municipal) allows this to continue without a resolution. Are we running into the same situation with the McDonald’s property on Moore/King – another boarded up abandoned site in our neighbourhood?

    • I was told (on a jane’s walk) that MacDonald’s still owns that property. It was not very accessible during LRT construction so it is my guess that they are saving it to develop into a trendy McCafe kind of place when the Midtown Condos and Sixo buildings are filling up. It will be an ideal location in a few more years.

  2. Why can the city not simply expropriate the building? There would be no cost to doing this because the value of the building is less than its outstanding tax bill.

    • Gordon: I believe the problem with that option is the city would then be liable for cleaning up the property and trying to sell it. That would be a considerable cost. I assume they don’t want to be liable for the bill and would rather someone purchase it with experience in property development.

      I don’t disagree with your suggestion. I’m just giving the city’s perspective.

  3. Thanks Ted,
    A friend of mine who is an engineer and works in contaminated sites said that there are remediations that could be done now with little cost. Apparently some trees will absorb TCE (the contaminant below and around the building) and convert it into a harmless product. Why not investigate this idea? I imagine the contaminants continue to travel away from the site.

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