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Diversity fuels growth

Perhaps more importantly, Lethbridge has taken significant steps to promote a surprisingly diverse economy in a city once anchored by coal mines and farming.


Perhaps more importantly, Lethbridge has taken significant steps to promote a surprisingly diverse economy in a city once anchored by coal mines and farming.

It is hard to think of another Alberta place where one can you find a canola oil giant, an aircraft engine manufacturer, award-winning neuroscientists, an army of professional researchers and startup biofuel companies all together. Lethbridge also boasts a bear-proof garbage bin manufacturer, a corn snacks giant and a mile-long railway bridge that links it to CP Rail's North American grid.

Straddling the Oldman, Lethbridge is strategically located on the west end of Canada's largest irrigation complex, the St. Mary River Project, which includes close to a half-million acres of irrigated land. It has matured into a food-processing centre, with a flour mill and various other frozen and packaged food operations.

Lethbridge has also seen growth in a variety of areas - everything from Sun Life Financial's 300-employee call centre to biotechnology firms such as B Fuel Canada Corp. The latter plans to open a $43 million plant east of the city in 2010 that will use canola plants as a renewable fuel.

Bill Halley, plant manager for U.S.-based Ring Container Technologies in Lethbridge, said the city was a logical place for his employer to set up shop in 2007.

"One of Ring's philosophies is to have a local supplier of plastic products for its local customers, so that is really one of the main drivers to being here," Halley explains, noting Ring supplies a Lethbridge oilseeds firm with containers. It also serves a local cat litter supplier with plastic packaging.

"One of the other drivers is just the cost of doing business here in Lethbridge, which was quite attractive to the company, rather than moving to Calgary or to Edmonton."

Halley said Lethbridge embraces new businesses. "The city, the Chamber of Commerce, are really open for business," Halley says.

Bruce West, vice-president for business development and operations for Economic Development Lethbridge, sees the city building on its strengths.

"Our biggest opportunities relate to our agriculture and the agri-food sector," said West.

Lethbridge's farmers and ranchers, however, are also dealing with a drought that now affects much of southern Alberta, as far east as the Saskatchewan border. Experts say it may be worse than the record dry spell of 2001-2002.

But diversity has softened the economic blow.

Within 40 kilometres of the city sit everything from wind farms to huge cattle feedlots. Inside Lethbridge, the University of Lethbridge and Lethbridge College are significant employers and research locations. Just outside the city, Lethbridge Research Centre employs more than 50 scientific researchers and 350 staff employed by the federal and provincial governments.


The City of Lethbridge is developing 480 acres of land in the northeast section, in what's known as Sherring Business and Industrial Park. Walmart Canada was an early park tenant when it opened a second store in the city a few years back. Most of the land in Sherring is zoned for industrial uses, with lot sizes ranging from a half-acre to almost four acres. The price-per acre is in the $170,000 to $200,000 range, depending on frontage and location. The park includes some lots with rail access.

Lethbridge is located on CP Rail's east-west Crowsnest Pass line, which ties into the CP line heading into the United States. Another CP line moves freight north to Calgary, where it hooks into the CP main line.

Lethbridge's location at the junction of highways 3, 4 and 5 also makes it a popular location for trucking firms, in part because highways 3 and 4 form part of the CanaMex trade corridor that connects Alberta to Mexico via Interstate 15 in the U.S.

H&R Transport Ltd., recognized as one of the 50 best-managed companies in Canada in 2007, is headquartered in the city. Its approximately 750 employees haul goods across North America.

Inside the city, significant road improvements are underway - with a $10 million overhaul of 28th Street North to start this year to serve growth in the northeast industrial area. As well, the city plans to spend $20 million to widen and extend Scenic Drive on the north side of the city along the Oldman Valley.

When it comes to residential growth, all three sectors - the north, south and west sides - have grown, but West Lethbridge is leading the pack.

The newest part of the city, which only started to develop in the 1970s, now has more than 30,000 residents. It's awaiting the completion of a $48.5 million complex that will feature new public and separate high schools as well as a public library branch. West Lethbridge is already home to the University of Lethbridge, where a new $65 million management and health-sciences building is under construction. Once a small undergrad institution, U of L now has 50 doctoral candidates and generates $10 million annually in research funding.


Two West Lethbridge subdivisions continue to bring new residential lots to the market: RiverStone and SunRidge. RiverStone lots go for between $95,000 and $245,000, while lots in SunRidge sell mostly in the $60,000 to $75,000 range.

Single-family home prices are more affordable than in Alberta's two largest cities, and can be purchased from around $220,000. Condos can be had for $130,000 and up.

Doug Paisley, an associate with Bankers Commercial Real Estate in Lethbridge, says the stability in the local market reflects both a significant public sector presence and the fact it's a service centre that many people, mostly local farmers, retire to.

"With all the government jobs here, we're petty stable," notes Paisley.

"Things are moving well in Lethbridge. There's still lots of activity."

Indeed, the city approved building permits for $233 million in new construction in 2008, ahead of $220 million in 2007.

More notably, permits for the first five months of 2009 cover almost $120 million in new construction, well ahead of the pace for 2008.


While there's a heavy public sector component to building activity (including about $51 million in work at Chinook Regional Hospital), private investment continues.

Commercial lease rates vary, with downtown's older properties being available for as little as $6 per square foot to $8 per square foot annually on a triple-net basis. Properties on higher-traffic streets go for closer to $10 per square foot to $14 per square foot, while newer space on the west side, if it's available, is in the $20 range. The highest rates for retail are now in the city's south end, where proximity to Walmart and Costco can demand a price in the $26 to $28 per square foot range, Paisley says.

He sees more retail development in West Lethbridge, given the area's growing population and a future amenities list that includes not only new schools, but also a new twin arenas complex.

On the industrial side of things, there are newer buildings for lease in the $8-per-square-foot to $9-per-square-foot range, about $2 more than for older buildings.

"There's definitely a need for more buildings with dock level and yards," Paisley adds.

Raw land prices for commercial development are based on proximity to traffic volumes and truck routes, with south-end landowners with highway potential still hoping for $650,000 per acre to $800,000 per acre, Paisley says.

Tax-wise, Lethbridge businesses aren't subject to a municipal business tax or machinery and equipment tax. The city expects tax and utility rates to grow by less than 4 per cent in each of the next few years.

– Dave Husdal

From the Western Investor, August 2009