"Many are still saying, 'You know what, we're going to stay here and we're going to hopefully get rebuilt,'" he said. "I don't see a huge willingness for High River folks to pull up stakes and move. There seems to be a very strong determination not to do that."
Okotok prices
There is more to the equation than simply High River entrepreneurs loyally sticking by their town. For starters, the best space in Okotoks will set you back more per square foot than it does in High River.
Even before the latest flood, retail space in High River was leasing for $16 to $18 per square foot, says Russell, whereas a lot of the new properties in Okotoks along Highway 2A were in the $30-per-square-foot range. Some renewals since the flood have hit $38 per square foot in the hottest part of Okotoks, he adds.
While the flood aftermath certainly isn't expected to curb prices in Okotoks, the community's longer-term growth prospects have some significant question marks - ironically, because of water availability.
Okotoks needs to obtain more water-licence capacity from either the Sheep River or other sources to grow much larger. At the current time it's not approving additional subdivisions that don't come with water-licence capacity attached. While Okotoks is in the midst of planning for a major annexation of land in the surrounding Municipal District of Foothills, that annexation is far from a done deal and water will be an issue regardless.
Things are also complicated by the fact that, while Okotoks moved away from a hard growth cap last fall and toward a continuous growth model, its past planning for a hard population cap has left it with challenges - one of which is growth in the surrounding MD that will have to be reconciled with any plans for expansion of Alberta's largest town. Another issue is that constructed utility trunk lines generally haven't been oversized to accommodate future growth, given that it wasn't expected five years ago.
"There are an awful lot of question marks out there," said Fraser. "Growing is not an easy chore because for quite a number of years [we] ignored any prospect of growing beyond our existing boundaries."
While some communities have an identified urban fringe with zoning and development restrictions designed to accommodate future urban growth that wasn't what was planned for around Okotoks.
Annexation
"The town not only has to undertake annexation, they also have to negotiate a new inter-municipal agreement that will govern lands that aren't being annexed, so it's a relatively complicated process," offered Fraser.
Some developers in the MD have been successful in tapping into High River's infrastructure. The result is developments such as Warner Business Park, located immediately east of Okotoks, that have piped water from High River 12 kilometres to the south. Such serviced land is selling for between $260,000 and $305,000 per acre - significantly less than serviced commercial land that has sold for around $1 million per acre along the Highway 2A corridor in Okotoks, Fraser notes.
Given the moratorium on new water licences from the Sheep River, which runs through Okotoks, he believes the region would ultimately be better off with a water pipeline from Calgary and an allocation of water licence capacity from Alberta's largest city.
"The next subdivisions that want to go [in Okotoks] are going to run into the wall of serviceability unless something's done," said Fraser, who expects growth issues will be the focus of the fall election in Okotoks.
The town is in the early stages of developing a plan for annexation, wanting to annex land for 30 years of growth, explains Shane Olson, economic development team leader.
Okotoks also wants to protect a fringe outside whatever new boundary is created, guaranteeing it land for another 30 years of growth beyond what's included in the first annexation.
It is unlikely any annexation application will surface before late 2014 or early 2015.
Olson says the town is in a holding pattern when it comes to industrial and commercial subdivisions given its current population of 25,000 and its water licences that supply enough water for 28,000 residents.
Since the flood, Okotoks space is even more in demand.
"Pre-flood, we were already booming here. The vacancy rate is very low," explained Olson. "A number of vacancies we did have in our downtown core have been filled with other businesses, not High River businesses, coming to Okotoks anyways."
In short, he said, "Demand for real estate is now outstripping supply."
Building-permit activity for the first half of the year confirms there's lots going on in already-approved subdivisions.
The town granted permits for $50.37 million in building activity for the first half of 2013, and that includes $17.6 million in industrial and commercial permits. The first-half total for 2013 is up 48 per cent from two years ago and 31 per cent from last year.
Olson describes 2013 as a turning-point year for Okotoks, adding that development in the town's own business park seems to be attracting additional development.
There is also some speculative building going on, with the owners of new industrial buildings seemingly confident enough to move ahead before they even have tenants lined up.
from Western Investor September 2013
