If you don’t agree with city council’s decision to pay millions of dollars for the old hospital site, take solace in this: the former owner wanted a whole lot more than the final selling price of $4.75 million.
During a wide-ranging conversation this week in our SooToday studio, Mayor Matthew Shoemaker revealed that the previous owner kicked off negotiations with a figure that was “outside the ballpark of real” — $12 million.
“That almost breaks off the negotiations right there,” Shoemaker said. “So you let temperatures cool for a little bit and then you go back and say: ‘That’s just not going to happen.’ I think our starting point was considerably lower than where we ended as well. It’s negotiation tactics. You start really high or you start really low.”
In the end, it took nearly a year for city staff to negotiate a selling price with Leisure Meadows Community Living that council members were comfortable with.
Shoemaker defended the purchase again, pointing out that the city will recoup that investment — and more — over the next decade. The plan, he said, is to quickly resell the eyesore to a developer for approximately $2 million, on the condition that the buyer, not the city, tears down the old General Hospital. (As SooToday reported yesterday, city hall has already received three proposals from developers.)
Depending on what is eventually built on the site, Shoemaker said the city will recover the rest of the initial investment from future property taxes.
“There is not just the economics of the matter,” he said. “There is also the social benefit to the community. That is the gateway to our downtown, it is a high-profile example of what derelict properties do to a neighbourhood, and I wasn’t satisfied to continue letting it sit like that. So it became clear that we had to do something — unless we were just going to let it sit there and rot.”
The city was also losing money every year as it fought the old owners to comply with property standards bylaws, including the recent installation of a $60,000 fence around the property.
“This was never an owner that was going to redevelop the property," Shoemaker said. "Yes, I wish we didn’t have to pay that much for it, but the reality is we’re paying for it now so that we can start recouping money in the shortest timeframe possible.”
You can watch our full interview with the mayor HERE.