Are there unfair business practices in the Town of Stephenville? What guides the operational decisions of a municipality? Can they compete with local private land developers?
When the town put forward the opportunity to develop town-owned property into a housing subdivision, it followed the public tendering process — all is good.
Subsequently, the municipality enters an agreement, a public-private partnership per se, that benefits both the developer and the town. This is good. The town receives an initial payment schedule and an allotted amount as each property is sold. This appears to be a shared equity benefit arrangement. Good for the town and good for the developer.
Next, the town agrees that this property development does not pay taxes on unsold properties. At the same time, other private subdivision developers do not have a similar arrangement, they pay taxes on unsold lots. Is this fair?
Next, the town agrees that, while they possess significant property for other subdivisions, the municipality will not enter into an arrangement or develop other municipality owned property into a subdivision development. Further, the town will not even sell property to another developer for potential development until 80 per cent of the properties in the public-private partnership are sold. This places a hold on all land owned by the town to be used or sold for subdivision development. This appears to ensure that, within its capacity, the town limits competition for the current developer.
Is the town not competing with other private subdivision developers? Is the town now enabling an unfair competition in the property development market? Is the town following the municipal act that says the town cannot use its assets to compete with private business? The town is allowed to be involved in economic development, but now they appear to be directly involved in competing with private business.
Finally, who holds the town accountable?
There are many questions, but few answers.
Tom Rose, Stephenville