Thursday, September 27, 2012

A Sizable (but Quiet) Investment


If you have been at Walmart of Kent lately, you will have noticed the land development activity that is going on behind these stores.  That development is designed to open up commercial development space in that Shoal Harbour Drive / Coish Place area.   

The developer, in this case, is the Town of Clarenville.

The Town has borrowed and spent a good chunk of change in order to make that land usable.  At the Council meeting this past Tuesday, the Town accepted a tender from Cougar Construction for $293,000 to do further work.  The problem is that this tendered amount was 30% more ($93,000) than what was predicted by the Town’s own estimates.  That’s a significant overage and a large amount of money that the Town will have to unexpectedly borrow.  It could also potentially affect the town’s ability to borrow for other things - like much needed road improvements. 

Although I have no doubt that over time the newly developed land will be sold and the Town will recoup its investment, the financial weight of such an unplanned borrowing is heavy and may come with hidden costs that affect other projects.

Normally development is left to the private sector in Clarenville.  This particular land development has been an exception that has neither been well explained, well questioned by Council, nor aparrently well costed.  If the Town is going to take such an approach to development, then there needs to be better accountability, scrutiny and transparancy.  We have not see that in this case and frankly that worrys me.    

Hear the discussion of the September 24th Council meeting at the Packet's website link.  (at about the 25 minute mark)

2 comments:

  1. Your blog has restored my faith in the human race. Keep up the good work!…

    ReplyDelete
  2. As every initiative, local and regional business development need funding. If you are growing your business or launching your next major real estate project, payday loans for development will fit your cash flow requirements, and help you bring everything in on time and within your budget. Such funds are essential for commercial development space. This financial option is fast and secure and can be used both by entrepreneurs and organizations.

    ReplyDelete