“I’m a little perplexed,” said John Hromyk, of Two Pine Ventures. “We’ve had a great relationship with the mayor, council and the economic development people right up until the fact they’ve decided to exercise their buy-back option.”
Two Pine Ventures purchased the Landmark Site in December 2018 and held a ribbon-cutting ceremony for Firehall Distillers in February 2020. The purchase agreement had included a construction deadline of September 2020, which was extended to March 15, 2021 when the developer was unable to break ground last spring.
During the April 12 council meeting, community growth and investment manager Colleen Thome informed council the developer had indicated further extensions to the construction timeline were not requested.
“We’ve been in discussions with the developer recently and unfortunately the development will not go ahead,” she said.
Hromyk said that isn’t correct.
“We’re certainly of no mindset to abandon a project we’ve not only put $350,000 into the purchase of the land, but another close to half a million into our development permit and building permit applications and designs,” he said.
He said the construction delay was due to the company’s banks rescinding term sheets on any building in the hospitality sector due to COVID-19.
“We anticipated from speaking to our banks that they would be in a position to start lending again on construction this fall,” said Hromyk.
He said they approached the Town to see whether it would be possible to free up some of the equity tied into the
project and create a lease-back scenario with the municipality to “keep the dream alive and keep going.”
Receiving a letter of intent from the Town of Okotoks to exercise its buy-back option came as a shock, he said.
Based on information provided during its April 12 meeting indicating the development had fallen through, council opted to purchase the Landmark Site back for just over $321,000 to ensure it managed future development of the land at 34 McRae St.
The land is currently zoned direct-control with permitted uses including micro-brewery, distillery, eating and drinking establishments, and office or accessory dwellings on the second floor of a business.
Coun. Ed Sands said the site is an interesting and important piece of land in downtown Okotoks, and based on the information presented to council it made sense to buy it back rather than have Two Pine Ventures sell it to another party.
“To have it possibly languish in the hands of a private developer, where it might sit low down the priority list, we want to see something happen and we can only do that if we own the land,” said Sands in the council meeting.
Coun. Tanya Thorn said she was disappointed not to see Firehall Distillers go forward, as it was a development the Town had been actively working on and excited about.
She said a lot has changed since the original purchase agreement was signed in 2018, and if the developer is backing out it’s a chance for the Town to reconsider its options on the site.
“This allows us to regroup and determine what is the most effective use of that for today’s current environment and control that a little bit more than it would be on the general market,” said Thorn.
Hromyk said Two Pine Ventures will be talking to the Town to see where things went sideways, and he’ll be fighting for the project.
“We were just looking to able to get some of that equity back out of the land and then create a lease-back scenario, or at least a short-term solution so that we could get back into the ground this fall,” said Hromyk. “I want to be up and running by this time next year.”
Thome said the Town had been in discussions with Two Pine for the past month as the construction deadline approached but it seemed the company was not prepared to extend its commencement timeline, and that's why the decision was made to enact the buy-back option.
"I think the Town and the developer worked very hard to find a solution," she said.
She said after speaking with Hromyk on April 13, there could be a chance Firehall Distillers could come to be.
"We are hopeful," said Thome. "When I spoke with the developer, he's hopeful they're still going to be able to make something happen and they would have the opportunity to make an offer to the Town if they should decide they're ready to go ahead in the future, and if it hasn't been sold in the interim."
