Jaw-dropping incentives

By
Western Investor
September 29, 2011





Examples of some of the jaw-dropping incentives in Moose Jaw include: -- grants of up to $10,000 to first-time homebuyers with annual incomes of less than $52,000 who purchase a new home (usually a condominium); -- a rental construction incentive that can provide a developer with a grant of up to $50,000 if it agrees to build at least five rental suites. A total of 60 units are being funded, on a first-come, first-serve basis, with an emphasis on two-bedroom units. According to Canada Mortgage and Housing Corp., the rental vacancy rate in Moose Jaw for two-bedroom apartments is near zero; -- loan assistance for up to $1 million of residential project costs. Saskatoon-based Westcap Management Ltd., a finance sector of the Saskatchewan government, oversees this plan. Under its Headstart for Homes initiative, builders and developers are eligible for loans of 90 per cent of the construction cost of new homes, including land, at an interest rate of 4 per cent. The main requirement: the new homes must be priced at or lower than the average resale home price, which in Moose Jaw is around $200,000; -- the civic LOTS program that provides a 100 per cent tax exemption on property for the first year for commercial-building owners who create a residential rental suite, a move aimed at creating lively, mixed-used projects in the downtown area; and -- a five-year tax holiday for any new business that creates jobs for at least 60 workers.

Industrial

And, perhaps the greatest incentive: the largest fully serviced and fully paved new industrial park in south Saskatchewan, the 30-acre Grayson Industrial Park, where city-owned acre lots start at around $150,000. In all, Moose Jaw has more than 200 acres zoned for industrial and commercial development.

It is not that Moose Jaw - one of Canada's top entrepreneurial cities according to the Financial Post - appears to need any help in attracting residents or investors. Halfway between Calgary and Winnipeg on the Trans-Canada Highway and just an hour from Regina, Moose Jaw is the heart of the largest economic region in Saskatchewan. Moose Jaw is also on the north-south traffic and rail route for Regina's giant Global Transportation Hub, which feeds material to and from the U.S. border.

About one-quarter of the province's population lives in the Moose Jaw-Regina corridor, which has one of the lowest-cost environments for industrial investment in North America, according to KPMG.

Major industrial employers include Mosaic Co., Canadian Salt Co., Terra Grain Fuels and Yara Belle Plain Inc. Just north of Moose Jaw, German fertilizer giant K+S Group is planning a $1.4 billion potash mine that will employ more than 200 workers. While the announcement is not yet official, locals say K+S already has workers and equipment on site.

This year, the Thunder Creek Pork Plant opened in Moose Jaw, hiring 200 local workers. There is currently a rush of both residential and commercial construction, which has all helped to drop unemployment in the region to 3.5 per cent, the third lowest in Canada.

Retail

Retail sales in Moose Jaw run around $712 million annually, 71 per cent above the national average. The vibrant retail scene includes boutique storefronts downtown, big-box retail on the fringe and the large Town N Country shopping mall.

A shortage of skilled workers is about the only threat to Moose Jaw, and one that is being eased by an average of 2,500 graduates every year from the SIAST Palliser campus, a technical and trade college.

Graduates will be needed not only for the new potash mine and local manufacturers but also for the new Moose Jaw regional hospital, which is a $100 million state-of-the-industry facility.

Saskatchewan Health Minister Don McMorris said that construction will begin next year and will be completed by the end of 2015. The hospital will be the first large hospital in Canada using "lean design," wherein medical staff and services are pooled around the patient.

"Instead of the patient travelling from floor to floor or from one end of the building to the other, patient services are centred around the patient," McMorris explained.

Housing

Moose Jaw's home builders are getting ready for the looming influx of highly paid medical professionals, and miners. An example is the new Iron Bridge Estates subdivision that is currently being developed by Iron Bridge Estates Inc.

"The city of Moose Jaw is absolutely ready for this type of [high-end] country-residential subdivision," according to Brian Walz of Royal Lepage Landmark, which is handling sales.

Iron Bridge's 91 lots range in size from 16,500 square feet to 48,500 square feet - three to four times the average lot size in Moose Jaw - and were all put in place at once. Some large houses are under construction, though landscaping in the master-planned community is just being finished. The luxury, detached houses will be priced at up to $1 million in a city where the average resale house price is around $200,000.

The building permit stats show what is happening: in the first six months of this year, 46 new homes were started, valued at $14.1 million, up from $12.4 million in the same period last year.

Total building permits, including non-residential, are averaging more than $1 million per month this year, with commercial and industrial construction accounting for $1.7 million in June alone according to the city's building department. But the big news is the city's new arena. In August the city opened the $62 million multiplex, Mosaic Place, which includes the new home of the Moose Jaw Warriors hockey team as well as eight curling sheets.

The permit numbers give solid evidence to Thorn's statement: "Moose Jaw is open for business."


from Western Investor October 2011


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