Towne Square now forecasted to be $1.1 million over budget

“Under the circumstances given the $250 million in budget work that occurred during a pandemic, I would call this a successful project,” Nicolay said.

But Clark was quick to disagree.

“I don’t agree with that. If we are going to be 55 per cent over budget I would not consider this a successful project,” Clark stated.

Director of business transformation, Joe Cartwright told the council that staff knew “right away” that the Towne Square project would require more than the $2 million in Municipal Stimulus money they received from the province.

“We would of known that it was going to require more than $2 million essentially minutes after putting the application in,” he said.

Supply chain issues and the rising costs of construction materials are said to be reasons behind the project being over budget.

Faced with overages, Cartwright explained that a $1 million budget amendment was approved by Nicolay. On top of that, $360,000 was also allocated for infrastructure rehabilitation work along Sixth Avenue and First Street.

None of the information on cost overages was ever presented at a public city council meeting, council heard.

When questioned by Clark as to if the city ever considered cancelling the project due to the cost overages or reallocating the money to another city project, Cartwright explained that they could not do either due to the parameters of the grant funding.

“We were not able to redeploy the funds to other projects from the MSP (Municipal Stimulus funding) side of things. So if we had decided Oct. 1, 2020, that we wanted to do another project we would not of been eligible. There were no opportunities with the provincial government to change projects at that time,” he said.

Canceling the project, according to the city, would have required them to give back the $2 million that was awarded.

City staff said the total cost of the Towne Square is now forecasted to be around $3.1 million. But the total cost won’t include a washroom or amenities like a skating rink which was widely publicized in Invest Medicine Hat promotional material. Those projects, the council heard would require another budget amendment and even more taxpayer dollars in order to be implemented.

Coun. Shila Sharps argued that the space located on 603 First Street should have been left to the private sector to develop. Sharps said pre-election, she met with a developer who offered a full-cash offer to the city, prior to the stimulus money being announced.

“It was flatly denied, and they said ‘no’ I’ve got other plans for it.”

The developer, Sharps said, was proposing a mixed-use building on the site and was willing to pay for everything. None of the costs would have had to be paid by tax dollars.

“The developers making full cash offers were not looking at us to clean anything up. So they were ready to take that risk, and clean it up and we would have been making taxes. So yes as a citizen I get very disheartened, and I think what got me today was the fact that no one acknowledged that developer and the fact we just act like, nobody has ever wanted to do business there and that is just not quite true,” Sharps said.

Nicolay stated over the years there have been at least eight attempts made by the private sector, all of them thwarted.

The city has stated that should the Towne Square seacan market flop, the land could be put up for sale after five years. Site contamination has been removed, and the land is serviced with the money that has already been spent.

This is the second time budget discussions surrounding Town Square were put in the spotlight. Clark said it is important to bring the information to the forefront in order to ensure there is greater accountability and transparency at City Hall.

“I just want to make sure that as we are proceeding, we are proceeding in a way that is respectful of taxpayers money and gets us the most value for money possible, and also into the future that we are making decisions about the projects we are working on in an informed, evidence-based way,” she said.

by Tiffany Goodwein

Towne Square now forecasted to be $1.1 million over budget

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