Doherty says Pac Dev has started clearing the first 220 to 250 acres of the site, and expects to move through the landuse clarification process this spring after agreeing to a conditional outline plan for the land with the Regional Municipality of Wood Buffalo late in 2011.
Ultimately, Pac Dev would like to see serviced lots available as early as the fourth quarter of 2012, Doherty says, though he knows that will be a tall order, particularly because of the desire to make the Prairie Creek project more than just a badly needed industrial park.
"This is the new gateway coming into Fort McMurray and we want to make it beautiful and nice as people drive into the community," explained the Pac Dev president.
Challenges for the developer and the municipality include everything from developing a new sewage collection system - the land can't be easily tied into the city's existing network and treatment system - to dealing with the muskeg layer. The latter issue is an area-wide one, Doherty acknowledges.
Doherty says Pac Dev and Wood Buffalo have already made considerably more progress toward readying the land for development than might be seen in a city like Calgary in a much longer time span.
While that may be true, things tend to be demanded more quickly in the north than elsewhere, and that's definitely the case in Fort Mac, where firms are hungry for shop space - even with serviced industrial land tagged at well over $1 million per acre.
A quick glance at Fort McMurray listings yields industrial properties priced at $1.45 million per acre, including 25 acres near the bustling airport.
If you're looking for a comparison, land near the Calgary airport - Canada's fourth busiest - sold for a little more than half that amount per acre in 2010, according to Colliers International.
Fast action
Doherty's hope that Pac Dev can bring land to the market sooner rather than later is shared by fellow developer Bryan Lutes, a man who wears two hats as president of both Wood Buffalo Housing and Development Corp. (WBHDC) and the Wood Buffalo Urban Development Institute, which represents the interests of the local development community.
"In Fort McMurray, the pace is probably three times as fast as anywhere else I've been," Lutes explained.
And with good reason. "There's very little product on the market today."
As of early February, WBHDC had only one lot left in its TaigaNova business park, which is located north of the heart of the city as Highway 63 heads toward major oilsands projects. That lot, a highway commercial one, offers 2.89 acres for a healthy bid of $5.9 million.
Lutes says his company would have little trouble selling more industrial lots under the TaigaNova pricing scheme if it still had them available at $1.25 million to $1.35 million per acre.
Lutes says the development community would like the province to move along on a second major site for new industrial and commercial development close to the Fort McMurray airport.
Development of that site, comprising about 600 acres on the south side of Highway 69 just south of the airport, would provide more options for businesses and small developers, Lutes says. It would also provide more competition for Pac Dev.
"That needs to come out for this community for two reasons," Lutes said of the airport land. "It needs to come out because of need and to keep competition for Pacific, so Pacific isn't just maximizing prices."
As of early February, the province hadn't listed the second site with a realtor.
New homes
While it may not rush to put the land on the market soon, the province continues to chisel away at some of the region's challenges in the areas of transportation and development.
"We anticipate a land release strategy in the next couple of months, particularly for residential, with regards to Saline Creek," Lutes said.
That piece of land, amounting to roughly 1,700 acres on a plateau on the south side of the city, is envisioned for a large new subdivision. The average house now sells for around $730,000.
Lutes expects transportation infrastructure issues to continue to be intertwined with everything happening in Fort Mac.
While there's been considerable progress in some areas - completion of a new five-lane bridge for northbound Highway 63 traffic over the Athabasca River - other needed projects have bogged down. The province has yet to start construction on a new interchange to access the Parsons Creek subdivision from Highway 63 on the north side of the city. Without an interchange, development beyond 1,000 homes in the neighbourhood simply isn't safe, Lutes says.
"There's no way to get people safely in and out of the development unless we have the transportation route," Lutes noted.
The province opened one new interchange on the highway north of the river in late fall to access Thickwood Boulevard. It expects to finish work on the Thickwood and Confederation Way interchanges this summer.
The additional interchange further north to safely access the Parsons Creek area is less definitive. Alberta Transportation says that detailed design of the interchange is complete, but Lutes worries that higher than expected tenders may mean that construction will not be complete for another three years, in 2015.
South of the heart of the city, similar safety concerns limit residential and industrial development.
There is no interchange for the highways 63 and 69 junction (the T-intersection is controlled by a stop sign for Highway 69 traffic), so additional development that will run more vehicles through the junction will require some upgrading - whether it be in the form of a large diameter traffic circle or in the form of a full interchange.
The Prairie Creek project will also eventually merit an interchange, though Doherty notes that traffic will initially access the project from Highway 63 via at least one traditional intersection.
Just how much buyers will pay for new lots in Prairie Creek remains to be seen. Doherty says Pac Dev is still crunching numbers while it continues with planning and site preparation work and ponders just what to do with all that muskeg.
"That's one of our biggest challenges at this point in time," said the Pac Dev president, noting that the scraped-off material may be used in the construction of berms and trails in the area.
Interest in Prairie Creek is considerable, however, with the developer and its realtor taking inquiries from prospective purchasers of both highway commercial and industrial land, Doherty says.
3M barrels a day
A review of oilsands forecasts suggests Fort Mac will only get busier. While oilsands production in Alberta currently sits at 1.6 million barrels per day, the province's energy regulator has approved another 1.5 million barrels per day of production.
Some of that additional production will be in traditional area north of Fort Mac, but a bigger share will be in less obtrusive "in situ" projects south of the city between Cold Lake and the oilsands capital. Lutes, who says Canada's oilsands capital must get ready, noted, "I think we're back to where we were in 06/07, which is pre another boom."
from Western Investor March 2012
