By Scott Roblin

City commercial development value drops over fourth quarter

Jan 24, 2018 | 4:19 PM

MEDICINE HAT, AB – Commercial construction was under the microscope at Wednesday’s Municipal Planning Commission meeting.

While residential building permits for the most part held steady in the fourth quarter of 2017, commercial projects took a major dive in value compared to the previous year.

When compared with the fourth quarter of 2016, construction values for non-residential permits between October and December 2017 dropped from $36 million to just $4.9 million.

Mayor Ted Clugston said there were fewer big ticket commercial projects issued in late 2017, but he’s expecting that number to bounce back.

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“Sometimes when the permits come in and get issued you see a large increase, especially with the [non-residential], and then you’ll see the drop-off again,” said Clugston. “We’re actually hoping to be able to maybe have some major industrial announcements come forward. So, you could see a big bump again and then a drop-off again.”

Near the end of 2016, construction permits were issued for projects such as the Medicine Hat Mall expansion and a number of new builds in the Southridge area.

According to the City, the lone major projects to earn permits in late 2017 were the cold storage facility and a new hangar at the Medicine Hat Airport.

Another reason for the decrease in value was more businesses last year elected to complete renovations in existing buildings, rather than build new operations.

Clugston said it’s wasn’t an unexpected drop as the commercial market is a lot more volatile than residential builds.

“Those just come in slowly over time,” he said. “But, you won’t see a great big, dramatic increase and then a drop with the [residential] like you do with the [non-residential].”

Kent Snyder with the Municipal Planning Commission said it was a rather slow quarter for development and 2017 was the lowest of the last five years of data.

Although commercial construction starts have been down recently, Clugston said the overall state of business in the city remains positive.

“You haven’t seen this kind of commercial construction boom since probably 2005 or 2006 in the city of Medicine Hat,” he said. “With what’s going on at Wal-Mart, the property adjacent to the Home Depot, a little bit up in the Box Springs.”

“Some of that boost in the previous years was also the City’s capital construction as well, we have to apply for a permit as well.”

Final commercial numbers for Medicine Hat in 2017 will be announced at the next Municipal Planning Commission meeting on February 14.