On the morning of Tuesday, September 4, Niverville’s town council voted unanimously to purchase a new municipal building at 329 Bronstone Drive, the former location of Horizon Livestock & Poultry Supply. In making the decision council considered several letters of support it received from residents, including one from the Chamber of Commerce.
The next step is for the decision to be approved by the Province of Manitoba’s Municipal Board. Since there were no stated objections to the purchase, Mayor Myron Dyck doesn’t expect the Municipal Board to raise any new concerns. Once the decision is approved, which Dyck says is likely to take a few weeks, council will vote again to finalize the deal.
One week earlier, on August 28, the Town of Niverville had held an open house at the Heritage Centre to discuss the deal with a group of about 40 residents. Information was displayed on a series of 17 information boards spread out across the room.
“This is what has been brought to council, so you can see the information we received,” said Mayor Myron Dyck at the open house. “We thought this may give a better idea and understanding as to the breadth of information we have to now come to a point of decision.”
History of 329 Bronstone Drive
In 2002, as an economic development measure, the Town of Niverville built 329 Bronstone Drive for an internet pharmacy company that decided to set up operations in town. The company, which had promised 80 to 100 jobs, almost immediately went out of business, their model having collapsed as a result of new regulations in the U.S. and an increase in the value of the Canadian dollar.
The pharmacy, which had signed a five-year lease, had first right of refusal on the property, which they chose to exercise. The building had been constructed at a cost of $900,000, and according to Councillor John Funk the Town of Niverville turned a profit of $100,000 on the sale.
The owners of the pharmacy held onto the property for approximately six years, selling it in 2008 to a third party for $760,000. The property was sold again seven years later, in 2015, to Horizon Livestock & Poultry Supply for $1.65 million.
Purchase Agreement
The Town of Niverville now proposes to purchase the property back.
A recent appraisal of the property, carried out by Ferguson & Associates of Winnipeg on June 5, established its value at $1.95 million. The building accounts for $1.72 million of this value, with the rest coming from the 1.627 acres of land.
As part of the purchase agreement, the Town of Niverville will pay $1.65 million. In exchange for selling the property below market value, the current owners will also receive a tax receipt of $300,000—which doesn’t cost the town any money. A deposit of $25,000 was made earlier this month, as a means of holding the deal until a final decision could be reached. The rest of the cash portion is to be paid in three installments: $425,000 in November 2018, $600,000 in January 2019, and the final $600,000 in January 2020.
Mayor Dyck says that the town has already been making plans for a deal such as this one.
“We have $250,000 currently in a reserve, which we call the Municipal Building Reserve,” Dyck says. “We started this municipal fund [a couple of years ago] for exactly this reason, because we saw this coming. Now that this opportunity’s presented itself, we’ve done our due diligence… So this $250,000 in the reserve would be going towards this purchase.”
Town Needs
According to information provided by the Town of Niverville, 329 Bronstone Drive will be an ideal location for the town’s administrative offices, coming at a time when the current facility at 86 Main Street is coming to the end of its lifecycle.
The town office at 86 Main Street was originally built 62 years ago, in 1956, and contains 2,400 square feet of office space. The building was last expanded in 1985, at a time when Niverville’s population hovered around 1,200. With four times the population in 2018, which places far greater demands on town services, the building is maxed out. During its busiest season, the town office must accommodate 11 employees, and it doesn’t have a dedicated break room.
Following necessary renovations in 2015, the town was forced to remove the current building’s council chambers. Ever since, council meetings have been held at the Heritage Centre.
The building at 329 Bronstone Drive, on the other hand, contains more than 18,000 square feet, 6,400 square feet of which is comprised of more or less move-in ready office space. The warehouse contains an additional 11,800 square feet of space.
Mayor Myron Dyck acknowledges that this is more square footage than the Town of Niverville needs, one or two years earlier than the town expected to need it.
“This is a purchase of opportunity,” says Dyck. “So were we needing it as of right now? No. In our planning, we were probably one to two years away. Having said that, this is an opportunity and a good deal for us, one that may not show itself again in the future. That is, of course, speculation, but it would make sense to do this now, versus waiting two years [when the need is great].”
The current town office has a single meeting room that can comfortably seat just eight people at a time, although maximum capacity would be closer to 16. The ideal setup, according to the council’s notes, would be to have a larger meeting room as well as two smaller rooms for breakout meetings of four people or less.
Other concerns take into account the building’s age. Mould has been developing throughout the building in recent years, leading to questions about air quality. There also isn’t room for a secure server, and the building’s IT facilities are housed in a small closet without temperature control. There is also insufficient space to store town documents.
Beyond the current limitations, additional demands are expected to accumulate in the coming years, as more staff is hired. Council’s notes also suggest that a more efficient layout would include less individual offices and more team-working spaces, providing greater flexibility.
The 6,400 square feet at 329 Bronstone Drive would allow for all of these upgrades, and also have room left over for training facilities which could be used by Fire and Emergency Services.
Fire and Emergency Services
Although administrative office space is the town’s top priority, the acquisition of this building also stands to benefit Fire and Emergency Services, which has also been starved for space in recent years.
“In 1998 when we moved into our 309 Bronstone Drive hall, we had three apparatuses and 12 to 15 firefighters,” said Deputy Fire Chief Stan Hiebert. “We had a very basic setup in the hall for equipment and turnout gear. We did not wash any equipment in the hall as we did not have the capability to do so. There was no ventilation system to clear humidity in the building.”
The department has grown considerably since that time. In 1998, the department’s call volume was 35 to 40 calls per year. In 2017, that number had jumped to 214 calls. The number of volunteered members has more than doubled, to 33. Training space is at a premium.
“The classroom is one room with an office in the corner for officers,” says Hiebert. “It’s tight and we are always close to full attendance for training. We have an organized, tight fire hall which we are making work, but our town is expanding and providing new challenges for on-call fire and EMS service.”
Another issue right now is that the area used for the cleaning and drying of turnout gear and breathing apparatuses is located in the garage next to emergency vehicles, which isn’t an ideal setup—and more space is already needed to park vehicles. Of further concern, the department requires a specially designated room for filling breathing apparatuses. Workstations for the fire chief and other staff are among the department’s other priorities.
Hiebert says that Fire and Emergency Services has worked closely with town council in recent years to develop five- and ten-year plans. For the last couple of years, they have been making their case for a new fire hall to meet their needs.
“I give the fire department credit, because we’ve had to tell them no for the last three years even though they made a very good case for why they believe they need what they need,” says Dyck. “In fact, we basically told them that they’re five years out from their [new] fire hall. That was kind of the timeline we saw.”
Synergies
Dyck points out that the amount of space offered by 329 Bronstone could accommodate the needs of Fire and Emergency Services. Although these logistics have not yet been fully explored, he says there are a number of opportunities that will come from the town owning both 329 Bronstone and the Public Works building which is already located right next door.
He says the adjoining properties could serve as a campus, allowing Public Works, Fire and Emergency Services, and Town Administration to all be located in one place. Not only that, but an expansion of police services could also be accommodated in the future.
“The overall goal here is to see if there are synergies,” says Dyck. “What we’d be looking to do is to put three departments into two buildings. So whether it’s Administration with Public Works, or Administration with Fire, those decisions have not yet been made. But as we also look to future policing and expanding EMS services in the community, the idea is to have essentially a campus setting for all things town-related.”
Dyck reminded those present at the meeting that a consultant has been hired to study future options for community policing. That report is expected to be delivered in two to three months, in time for council to discuss options at their annual planning sessions in November.
Comparable Facilities
As part of its research, the Town of Niverville has identified two other capital building projects which provide helpful points of reference.
One is the new Ste. Agathe Fire Hall, which is set to have its grand opening next month. The three-bay hall has 5,400 square feet and was built at a cost of $1.7 million, or $315 per square foot.
The second point of comparison is the RM of Tache’s combined municipal office and Public Works building, which was finished last year. That 21,000-square foot structure contains 8,000 square feet of office space and 13,000 square feet of shop space. It cost a total of $4.8 million, or $229 per square foot, and houses 22 staff.
According to Niverville’s council, both of those options highlight the value of purchasing the 18,000-square-foot facility at 329 Bronstone for $1.65 million plus an additional $300,000 which has been earmarked for future renovations. The key detail? This deal will get them all that space for just $92 per square foot.
Renovations
Niverville’s Chief Administrative Officer, Eric King, points out that relatively few renovations are needed on the office space at 329 Bronstone, aside from knocking down some walls, since it’s almost move-in ready.
Speculating on future uses of the warehouse space, additional renovation money will likely need to be spent to convert the warehouse into a suitable home for Fire and Emergency Services. For example, Fire and Emergency Services has made council aware of the weight load per square inch that’s required in order to handle emergency vehicles and other equipment. It’s uncertain whether the floors would need to be strengthened to meet those requirements.
Alternatives
Earlier this year, before 329 Bronstone came on the market, the Town of Niverville purchased another property for the purpose of constructing a new office building at some point in the future. The costs of a new building, Dyck says, is reflected in the above comparables.
“The town did recently purchase the Manitoba Hydro lands,” Dyck says. “One question people have is, if you have that, why do you need this? The answer is that this [329 Bronstone] was not available or known at the time of the Manitoba Hydro lands purchase.”
Dyck notes that, although no definite decisions have been made, both the Manitoba Hydro property and the 86 Main Street property could potentially be sold. Since Dyck is himself an appraiser, he offered some rough math on the subject, pegging the value of the Hydro lands somewhere between $325,000 and $375,000, and 86 Main Street between $200,000 and $300,000. Combined, he believes a conservative estimate for the pair of properties is $500,000 to $600,000.
Until that time, should such a time come, both properties would remain as town assets.
Another alternative which presented itself in 2017 was the potential purchase of the old Puratone building at 295 Main Street, which contains 9,119 square feet of office space on the main floor with an additional 3,400 square feet of space in the basement. The 1.4-acre property was on the market for over a year before it was eventually sold to the Progressive Group.
Dyck says there were several reasons why the town passed on that opportunity. One was that it was single-use, whereas 329 Bronstone Drive includes both warehouse and office space to accommodate multiple departments. He also adds that the anticipated renovations at 295 Main Street would have been cost-prohibitive.
Resident Concerns
During the meeting, one concerned resident brought up the question of whether it would be more fiscally responsible to lease administrative offices as opposed to buying a facility.
Mayor Dyck replied that council considered that option before the purchase of the Manitoba Hydro lands.
“That [study] was done last year,” says Dyck. “We could lease at the triple net rate that is in town right now, which is roughly $13 to $15 dollars a square foot. So if we were to lease 5,000 square feet, that’s about $75,000. If a building lasts 60 years, then take that $75,000 [annual leasing cost] and times it by 60 years. That is the biggest reason why council a year ago, when that was done, said, ‘No, leasing doesn’t make sense.’ We’d be spending money that we should be doing other things with.”
According to council’s math, leasing a building for 60 years could end up being four times more expensive in the long-term than buying a suitable building right now.
Another resident pointed out that the town will lose substantial revenue by purchasing a property which has been contributing approximately $20,000 per year in municipal taxes.
Chamber Support
At the September 4, John Magri, Vice-President of the Niverville Chamber of Commerce, read a letter of support for the deal.
“The Chamber views this as a financially sound decision that will provide the town’s administration not only much needed space now but into the future at a significantly lower cost than would be required to build a similar space,” he said, going on to cite the management efficiencies which the deal will make possible.
The letter also expressed encouragement that this move will signal to prospective business owners that the town is progressive and looking to the future.
“As the representative of business in this community, the board of the Niverville Chamber of Commerce is encouraged to see that the purchase of this building will not result in higher taxes,” he added. “The purchase payment details are well thought out and offer benefits to both the seller and buyer, resulting in a win-win situation. Prior to this building coming up for sale, council had identified in this year’s budget an amount of $425,000 from general reserve for this type of purchase. This shows foresight and planning on the part of council. It indicates that this purchase is not being done on a whim, but rather that it fits with a forward-looking approach.”
