Halifax isn’t doing enough to make sure it can meet the demand for industrial land in the municipality, according to the auditor general.
Evangeline Colman-Sadd presented her office’s “Corporate Real Estate Development and Sale of Industrial Lands, Land and Building Acquisition and Disposal Audit” to council’s Audit and Finance Standing Committee on Wednesday.
“Better coordination between Corporate Real Estate and Planning and Development is needed to meet Regional Council’s strategic initiative of ‘Ensuring a sufficient supply of industrial lands,'” the auditors wrote.
“HRM lacks sufficient long-term plans on how to meet future demand for HRM’s industrial lands. There are some short- and medium-term plans to expand three of HRM’s business parks, but the plans lack detail and do not have estimated timelines for all key milestones. Other aspects of the development and sale of HRM’s industrial lands are effectively managed.”
The audit noted a consultant told HRM in 2020 that it only has enough supply of industrial land to meet demand until 2024.
“The consultant forecast the municipality’s future demand for industrial lands to 2039 and found the municipality needs a minimum of 510 net acres of additional urban industrial lands suitable for development to meet this demand,” the auditors wrote.
“As of November 2022, HRM’s website has nine municipally-owned industrial land lots for sale, totalling 46 acres. Most of these lots already have interested purchasers.”
HRM’s corporate real estate department is responsible for identifying industrial land and planning for development. But the auditors said they need help from HRM planning and development.
“Planning and Development management told us that while they are aware of their responsibilities, housing and other Regional Council strategic initiatives have been prioritized over industrial lands,” the auditors wrote.
Lack of detailed plans for business park expansion
HRM told the auditors they have plans to expand three business parks: Ragged Lake, Aerotech, and Burnside.
In Burnside, construction is underway on Phase 13, which is broken into three parts, 13-1, 13-2, and 13-3. The first of those is scheduled to be complete by September 2023.
“When we completed audit fieldwork, Corporate Real Estate did not have detailed timelines for key milestones for 13-2 and 13-3,” the auditors wrote.
For the Ragged Lake and Aerotech areas, HRM had no estimated timelines for completion. There are no detailed plans for Burnside Phase 14 either.
The audit found HRM was following proper procedure for selling industrial lands. It looked into five sales to ensure they met the municipality’s policies. It also found management was properly reviewing those sales.
Purchase and sale processes need work
On land and building acquisition and disposal, the audit found HRM’s processes need improvement.
The audit reviewed 30 instances of HRM buying or selling land or buildings, categorized as either regular or strategic. The tracking sheets in many of those cases were lacking information.
“Seventeen of 27 regular properties we reviewed had limited information. Many had missing information, outdated property status, incorrect dates, and wrong property classifications,” the auditors wrote.
Auditors also found HRM needs to better monitor purchases and sales, different departments roles need to be clarified, and service targets need to be reviewed.
The audit makes seven recommendations, all accepted by management.
Colman-Sadd’s office always reviews its audits after 18 months. But councillors have recently been following her suggestion to ask for progress reports.
Coun. David Hendsbee moved during Wednesday’s meeting to ask for a progress report from management due within six months.
Mayor Mike Savage proposed a friendly amendment to bring that information back quicker, by March 1. He wanted that report to include progress on the recommendations from the 2020 consultant’s report mentioned in the audit. The deadline would help inform the budget process, Savage said.
“In my position I get to talk to people who are thinking of coming to set up here in Halifax all the time, and I know we’re going to need industrial lands,” Savage said.
“I also know the huge effort that has to be put into housing right now and I think that’s a legitimate diversion of attention, as you noted, but I think it’s worth us having more information. And I wouldn’t want to wait 18 months.”
Almost all buildings in the business parks are single-storey, two storeys at most. What a colossal waste of land! As Cushman Wakefield managing director says (quoted in All Nova Scotia), existing business park tenants looking to expand could literally raise the roofs of their buildings to add second storeys or double their warehouse space.