Building Capacity in Sudbury’s Industrial Parks – by Lindsay Kelly (Northern Ontario Business – October, 2011)

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Industrial park upgrade plan leaves doubt

News that the City of Greater Sudbury has decided to go forward with upgrades to a pair of industrial parks is good news, but leaves lingering doubts, said a mining industry observer.

“There are more questions than there are answers for me,” said Dick DeStefano, executive director of the Sudbury Area Mining Supply and Service Association (SAMSSA). “It just takes so long. That’s the biggest complaint I got back from our guys: it just takes so long to do.”

In June, Sudbury council approved a plan that calls for $65 million in water, wastewater and road infrastructure upgrades to the city’s eight industrial areas, with the parks at Fielding Road, in the city’s west end, and Elisabella Street, on the east side, identified as priorities.

It will cost a combined $875,000 to complete the preliminary environmental assessment and detailed design estimate at those two properties, and city staff have been given the go-ahead to begin the process, deeming the upgrades necessary to encourage economic development.

A $1-million grant from the Northern Ontario Heritage Fund Corp. will go towards a municipal assessment, and the upgrade and installation of sewers, lift stations and a force main and water main at the Fielding property, while the Elisabella park will get new sewer lines and a water main. The cost to follow through with the full series of upgrades is estimated at close to $50 million.

While he agrees with the city’s selection of priority areas, DeStefano questioned where the city will get that $50 million, and predicts it will take between four and five years before the work is complete. In the meantime, businesses that are currently located in the industrial parks, and those that are looking to relocate there, are left without solutions to ongoing problems with water access.

“It’s not the new lands that will be opening, for me,” DeStefano said. “It’s just bringing the existing water and sewer services up so they don’t have to get into a lot of extra costs on fire regulations.”

A lack of proper water access is both a fire hazard and an inconvenience, and some business owners have installed large water reservoirs to meet their needs.

DeStefano is equally concerned that the business owners haven’t yet been apprised of their share of development fees, suggesting there will be a cost for all businesses in the
park who will benefit from the upgrades.

“It’s not going to be a cheap experience for the people who are there, and it’s not going to be a cheap experience for the people coming in, because it’s not the old style where we have industrial parks for $1,500 an acre,” he said. “It’s a hundred times its value now, so I can’t predict with any accuracy what the demand will be.”

Private developers could seek as much as $150,000 to $200,000 per serviced acre, but would likely be able to more quickly meet the needs of business owners, he added.

Requests for new industrial land have died down in recent months, but DeStefano is uncertain if that’s because demand has slowed, or because businesses are content with their current situation.

However, he has received requests from businesses looking for bigger buildings to expand their current space, and they’re looking at older buildings that already have water and sewer access so they don’t have to incur the extra costs associated with development.
One recent request DeStefano fielded came from the Town of Espanola which is seeking tenants for its industrial area. It recently received funding from the province to expand its park from five to 15 lots, with full servicing and an access road that will provide a more direct route from the park to Highways 6 and 17, the two main arteries leading in and out of town.

But the distance between Sudbury and Espanola—it’s a 45-minute drive one way—may be a deterrent for some businesses that are looking for efficiency and reduced costs, DeStefano said.

The need for industrial land shouldn’t be confused with the availability of commercial properties, he added. While Sudbury currently has an abundance of commercial properties, businesses seeking industrial land are looking to meet a particular need. They want space to install fabrication plants, and where they can cluster with like-minded businesses.

If the city can come up with the funding for the work, and it follows through with its plan for development, DeStefano said the city will be able to start marketing Sudbury again as a place that is available for new business, something that, until now, has been difficult to do.

“It’s kind of a patchwork approach, but at least it’s on the table,” he said. “I’m trying to be optimistic. At least they’re looking at it, at least they’ve allocated some dollars to Elisabella/Falconbridge Road. They’ve had a lot of pressure on them to do that.”