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Properties with Potential Challenges

Properties with Potential Challenges

Posted by: Matt Steringa / September 21, 2020

Working with community residents, the Edmonton Community Development Company has been building a database of “properties with potential” for our new Project 10 initiative. The nature of these properties is such that, if they were purchased and torn down, there would be a potential for significant reduction in social disorder and crime in an otherwise family-oriented neighbourhood.

Our database has now grown to catalogue more than 130 properties located in McCauley and the Alberta Avenue district. A shared aspiration of these urban core neighbourhoods is to increase market housing that would attract more people to these areas. This is a void that the Edmonton CDC hopes to fill.

One might wonder, though, why such a void exists in the first place. It’s a complicated issue, but we’ve already gained some interesting insights while making our first couple of purchases.

We had been considering purchasing a property in McCauley with an outstanding Alberta Health Services order on title; it was a property known to be a gathering place for activities that made neighbours feel unsafe. When it was foreclosed upon, the Edmonton CDC submitted an offer to the Court of Queen’s Bench, which was approved; since it was in foreclosure, the property was considered purchased “as-is, where-is.”

Shortly after the purchase closed, we were able to physically access the boarded-up property. Inside, we discovered unknown drug substances, which meant we couldn’t complete a hazardous materials assessment until the drugs were identified and removed.

Once that was completed, we proceeded with the hazmat assessment, through which we learned that asbestos had to be removed before demolition could occur (and that air quality would have to be monitored constantly throughout the removal process).

In the meantime, we had to hold off on the building’s demolition, BUT we still needed to keep the grass cut, install a fence, ensure that utility meters were removed, cut the gas line back, and pay for insurance and property tax.

Ka-ching! Ka-ching!

Our next purchase of a burned-down building wasn’t much better.

“How bad can it be?” we thought, “it’s basically already demolished!”

It turns out, based on required tests, we had to assume that asbestos was present, which required, in this instance, a wet demolition and removal of materials to a landfill for contaminated waste.

Ka-ching! Ka-ching!

It became increasingly clear to us that, even if the purchase price on a foreclosed property might sound like a heck of deal at first, some “properties with potential” are not great investment options for most developers due to costs incurred prior to construction.

These extra costs contribute to the development gap in core neighbourhoods—and this is where the Edmonton Community Development Company has a vital role. As a non-profit developer, we undertake development projects that few others would consider. We need to cover our costs and to keep a surplus for future developments, but we are not beholden to the same return-on-investment needs as conventional developers.

And, though we can almost certainly expect more unforeseen learning opportunities in the future, all of us at CDC remain excited and enthusiastic about working to produce positive economic change to neighbourhoods, one property at a time for now. But rest assured, we hope that in the not too distance future, the CDC can announce partnerships that could lead to Project 50 and (over time) even higher!

We invite your help, questions, and input as we push towards our Project 10 goal to transform 10 urban-core properties into neighbourhood assets. Please email, call, and find and follow us on social media for the latest on Project 10 and other initiatives by the Edmonton CDC.

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