At the peak of the housing crunch in Thompson almost 19 months ago, deputy mayor Harold Smith paid a visit to the Thompson Chamber of Commerce, as the weekly guest luncheon speaker on June 25, 2008, to tout a much ballyhooed new housing deal the City of Thompson had struck two days earlier with Winn Can Properties Ltd.
The deal called for Winn Can, comprised of a Winnipeg group of investors, working in conjunction with Schickedanz West, a division of Calgary-based Schickedanz Bros. Construction, to build 110 new homes in the Burntwood South subdivision by the end of 2011 - the first 30 of which should have been completed by the end of last year. Based on market demand, there was hope the agreement might even lead to the development of more than 300 homes in the subdivision by Winn Can.
As of Jan. 1, none of the homes had been built, Winn Can has defaulted on its commitments, and the deal, which the city had still hoped might be renegotiated as recently as last summer, is a dead letter, the victim of a changed economic landscape that materialized almost before the ink was dry on the paper. The developer has forfeited its $30,000 deposit and all the remains is to transfer property title back to the City of Thompson.
The deal, which saw Winn-Can as developer-of-last resort when no one else expressed interest in undertaking the project, turned sour when the world economy tanked in the fall of 2008, leading to a last-in, first-out scenario.
As chair of the city's development and review committee, Smith's enthusiasm at the time was understandable. He said the Winn Can deal reflected the most significant shift in policy since the 1960s in the city's role in the development of residential property. Previously, the city was its own developer, essentially taking care of every aspect and then letting a builder construct the houses.
In a good year, the city at best recovered its development costs under the old system. At times, it lost money. Now, the market would be expected to drive the pace and style of development.
Smith then listed the advantages of the Winn Cann deal:
Ending the practice of the City of Thompson subsidizing market housing by selling property at prices that only recovered hard development costs;
Setting conditions for the market to drive pace and style of development, rather than policy decisions and financial constraints of the city of Thompson;
Reducing the investment burden of the city in order to support growth;
Establishing conditions that attract investment to the community.
Smith said while it wouldn't solve the city's housing crisis overnight, it would be a start and hopefully 300 homes up for sale in the next few years would be a big enough incentive for people to move here.
In each of 2009, 2010 and 2011, Winn Can was to develop and offer for sale no fewer than 30 serviced lots, houses or townhouses.
Winn Can was to construct roads and services throughout Smith Crescent, MacMaster Bay, and Hambly Crescent, and was also to develop the remaining portion of Campbell Drive.
Development was to proceed in three phases starting with the single family detached homes on 19 lots on the portion of Smith Crescent west of Campbell Drive. In Phase 2, Winn Can would receive an option to develop Hambly Crescent and Smith Crescent west of Campbell Drive in a configuration to be determined by the city.
Ninety-six multi-family units were to be built in the second phase, priced around $200,000 per unit, as fourplexes, which could possibly have been sold as condos, in the MacMaster Bay area of the Burntwood South subdivision.
Not all Thompson residents liked the Winn Can project. On Aug. 11, 2008 residents from nearby Smith Crescent, Campbell Drive and Despins Road turned out in force for a public meeting under the Planning Act to oppose council amending its zoning bylaw for the area to allow the project
They lost the battle as the project was found to be consistent with the Thompson Planning District's development plan bylaw. The Winn Can project was also consistent with provincial land-use policies. While the residents may have lost the battle, it appears they won the war. The market has accomplished what planning policy didn't in killing the project.
Time will tell if that is a good or bad thing for the larger community outside of Burntwood South. Single detached new home starts decreased 86 per cent last year, plummeting to six, the Central Housing and Mortgage Corporation (CMHC) says, from 43 in 2008.
Multiple family housing starts went from eight in 2008 to none last year. Single family starts went from went from 24 in 2007 to 43 in 2008 - an increase of 79.2 per cent - and the highest number of housing starts in at least six years. Multiple family housing starts went from two in 2007 to eight in 2008, all started in the final quarter.
Combined there were 51 housing starts in Thompson in 2008, compared to 26 in 2007, representing a 96.2 per cent increase. Now that has dropped to six starts and an 86 per cent decrease.
The new hope now, Smith told council last October, are projects such as Grayling Place, KDS Development Ltd.'s 10-lot re-subdivision of the most westerly portion of Char Bay, off of Westwood Drive, to accommodate single-family housing.
In a report to council, Smith said, "This market development represents a major shift from our previous development practices. Specifically, the city's role in this market development has been to negotiate and sign a development agreement, which included the transfer of land. The development did not rely on the financial resources of the City of Thompson, which are both limited, and subject to the annual passage of a financial plan.
"It is the committee's view," Smith said, "that the previous model for development contributed to the shortage of housing in Thompson in recent years, due to the inability of the market to respond to market demands. By moving away from its role as developer of lands for market housing, the city can focus efforts and resources in other areas that aren't as easily addressed through the market," Smith said.
