Historic central Alberta town finds itself on the radar of Calgary commuters and retail investors

BY DAVE HUSDAL

The length of the phone interview is indicative the boom is back on in Olds.

It takes Larry Wright quite a while to brief you about what's going on in his central Alberta community, largely because there's a lot more to Olds these days than a successful agricultural college - though that's still a key piece of the puzzle.

Wright, the director of operations for the Town of Olds, patiently reels off the details of various development and redevelopment projects in the community, one that enjoyed boom years from 2006 to 2008, before the recession hit.

Back in 2006, building permit values were in the $75.8 million range. They zoomed to almost $117 million in 2007, thanks to large commercial and institutional projects, but have dropped steadily since then, hitting only $28.3 million in 2010. Wright expects that to change in 2011, and be particularly obvious another year down the road.

"I really think that 2012 with be our benchmark year," Wright explains, partway through listing everything that's coming down the pipe for Olds - from the new 45,000-square-foot branch and head office of the Mountain View Credit Union on the west end of town to a variety of infrastructure improvements planned or underway that involve the town, Alberta Transportation, or both.

It's clear from the conversation that Olds is a community where both new development and redevelopment are economic priorities.

Downtown makeover

On the redevelopment front, the town is pursuing a plan for Uptowne Olds, the traditional core of the community. Wright says redevelopment work and infrastructure costs could make use of a model that Calgary used to finance East Village redevelopment. That model sees new tax revenue from a defined area targeted to cover infrastructure costs.

An innovative approach to revitalizing the town's core isn't exactly a new concept. In fact, the Uptowne Olds moniker is already fairly well known in central Alberta - the result of businesses in the town's centre banding together with marketing and promotions efforts when big-box retailers arrived in the west end a few years ago. The smaller shops have also focused strongly on service, notes Gail Scott, community economic development officer for the Olds Institute for Community & Regional Development.

Now Olds boasts Wal-Mart, Sobeys, Extra Foods, Staples and Canadian Tire, yet it's also home to a vibrant main street that lacks any boarded-up storefronts, Scott said.

Indeed, the box stores have helped the merchants of Uptowne Olds in some ways, because they've widened the catchment area for retail traffic in the community of 9,000, Scott says. The trading area for Olds is considered to be 40,000 plus.

Location is a big part of the draw for Olds, which is situated roughly 80 kilometres north of Calgary and roughly a half hour from Red Deer and Airdrie just west of Highway 2, the province's bustling north-south traffic artery.

Residents can reach Calgary International Airport in 45 minutes. Try doing that from a home in southwest Calgary at the wrong time of the day.

No wonder Olds attracts the likes of airline pilots and oilfield professionals among its new residents.

Hugh Bodmer, an Olds realtor with CIR Realty and a past economic development staffer in the community, says Olds is an attractive place for people to escape city life. They're looking for homes on larger lots close to amenities. In some cases, they're choosing Olds because it's not that far from Calgary, Red Deer or Edmonton, where family members may already be living.

Buyers in Olds are displaying a general desire for new properties, rather than existing ones, he says.

"The market is growing and expanding for new homes," Bodmer explained, adding that while price points vary somewhat, a new single-family home in the community's northwest Vistas neighbourhood with a double garage sells in the $420,000 range. Higher-end duplex units in the same area sell in the $310,000 range.

Like Scott, Bodmer says retailers in the community are clearly seeing increasing customer traffic. He cites a friend who owns an Uptowne Olds shop.

"He's seeing lots of new people to town, people he has never seen before," Bodmer explains.

Oil and gas

That's likely to continue, based on what's going on in the central Alberta community that also boasts an oilfield service sector that's picking up again with increased natural gas activity.

Future business development and infrastructure enhancements are clearly linked in Olds, and progress is ongoing in the latter category.

Construction is underway to hook Olds up to a regional wastewater treatment system in 2012. It's already part of a regional water system that runs through communities south of Red Deer, and that system is also being expanded to guarantee capacity for growth.

Alberta Transportation is looking at enhancements to Highway 27 - the main east-west commercial strip - as new development and redevelopment projects happen. The province has also committed in its three-year transportation plan to rework the interchange at Highways 2 and 27 to improve access in and out of the community from the east.

Gaming play

The interchange sits east of Olds in Mountain View County, and there are also projects eyed for the area outside of town. A noteworthy one is a long-shot proposal from the local agriculture society to build a "racino" facility at the interchange. The gaming venue would feature a horse-racing track and related slot machine gaming, not to mention a hotel. No licence has been granted for the racino to date, and the province's gaming authority has a moratorium on new licences at this point.

Meanwhile, Pomeroy Inn & Suites Inc. is looking at a $12 to $14 million hotel project on Olds College land that would see the establishment of the Canadian Institute for Rural Entrepreneurship.

According to Pomeroy, the "state-of-the-art" facility will encompass the brand's blueprint of extended-stay suites, full amenities and service culture, plus it will also feature full food and beverage services including conference facilities and a restaurant. Perhaps the most unique design element will be the learning services built into the property. Students will be able to work and learn in the interactive design, which will include teaching and observing areas.

Construction is expected to start this fall, says Wright, once development agreements are in place for the site on the east end of Olds.

Industrial scarce

While Olds College started out as an agriculture institution, its program base has diversified to land and environmental management and rural entrepreneurship.

While Olds has a lot going for it, the community also faces challenges, notes Bodmer. Among them is a shortage of serviced industrial land. What little is available can run in the range of $250,000 to $280,000 per acre. Unserviced industrial land is in the $30,000 to $40,000 per acre range, according to Scott.

Entrepreneurs looking at setting up shop in Olds face a wide range of commercial and industrial lease rates.

According to Scott, industrial leased rates are in the $7 to $12 per square foot range, with commercial rates varying significantly throughout the community - from $8 to $14 in Uptowne Olds, up to $30 for new highway commercial space on the west end. Older highway commercial runs in the $12 to $22 per square foot range, with service commercial buildings more typically in the $13 to $20 range.

Bodmer says residential revenue properties can also prove decent investments in Olds, thanks not only to the college but the local employment market. Two-bedroom four-plex units, for example, rent in the $750 per month range, while larger duplexes can rent for $900 to $1,100 per month.

All in all, Olds is benefiting from people looking for something different in the Highway 2 corridor. Noted Wright: "We're seeing a shift from Calgary into the Olds area, and we're seeing people not go to Red Deer."

from Western Investor June 2011