EDITOR’S NOTE: A previous version of this article was accidentally published last week before it was completed. That story was removed and replaced by this version of the article.
The City of Sault Ste. Marie recently purchased a property at the northeast corner of Second Line West and Goulais Avenue for $115,000 more than the seller paid for the same property just 10 months earlier.
In January, the city purchased 628 Second Line W. for $705,000. In March 2024, the same property sold for $590,000.
Last Monday, the commercial building on the site was demolished as part of the city's plan to improve traffic flow at the oft-congested intersection with either a roundabout or right-turn lane.
Did the city overpay for the property? Why did it have to spend $705,000 for a property that sold less than one year earlier for $590,000?
CAO Tom Vair told SooToday that the city engaged in discussions with the former building owner when they were considering taking out building permits on the property in mid-2024.
"Staff inquired if the owners would be interested in selling the property to the city," Vair said. "An appraisal was completed on the property, and it indicated the value of the property was more than $700,000."
Publicly available land registry documents show that the previous owner, Windsor Park Residence Ltd., purchased the property on March 28, 2024 for $590,000 — just 10 months before selling it to the city for $705,000.
Corporate records for Windsor Park Residence Ltd. list Paul Finck as the sole director. He did not reply to a request for comment from SooToday.
Land registry records also show that the property changed hands in April 2022 for $410,000. That means the value of the property appreciated by $305,000 — or 72 per cent — in the three years leading up to the city’s purchase.
The building housed four tenants, including Paw'n Pet Food & Grooming, East Coast Buy and Sell Inc., CASS Partnership and the office of Robert Dale. For many years, the building was home to the Morgan's Clothing store, which closed its doors permanently in 1989.
Last week, SooToday published a letter to the editor penned by Shawn Dagenais, owner of Paw'n Pet Food & Grooming. In it, he said the city did a poor job in communicating with tenants and offered no compensation for the businesses to move out.
Vair said those discussions should have been between the former owner and tenants.
"While we understand tenants may have been disappointed in the building owner's decision to sell, it was the owner's decision, and the lease agreements between the previous owner and the tenants govern notice provisions.
"The speed at which the purchase occurred was at the sellers' request. The seller requested the closing date and the city bought the building with vacant possession, meaning the seller would deal with the existing tenants before closing," Vair said.
"Our understanding is that the seller notified the tenants and provided appropriate notice to meet the initial closing date. The closing date was then extended to Jan. 21, 2025, because the tenant suggested needing more time. Contractually, the city did not need to do so, but did.
"From our understanding, the two months of notice initially provided by the seller was appropriate for the commercial tenancy agreements. One month is the regulated minimum. Overall, the tenants had five months to vacate. Different considerations by the city may have been taken if a longer-term lease had been in place and the seller had not agreed to provide vacant possession to the city."