Dysart et al council has committed its taxpayers to paying off a $1.45 million mortgage on a 91.5-acre parcel of land it purchased on County Road 21.
Mayor Murray Fearrey said the township intends to pay off the mortgage – either via reserves or a loan – by March 1, 2024.
Fearrey said the decision was made following a closed council discussion Nov. 28. He said the mortgage, held by developer Paul Wilson through his company Harburn Holdings, has to be settled to ensure the township isn’t in breach of the Ontario Municipal Act. Treasurer, Barb Swannell, said the motion approved by council was to pay out $1.45 million.
Fearrey said, “we have to pay that out because we can’t take on private mortgages. The law says a municipality can’t borrow money from anything but a bank.”
Council wants ground broken within two years
Clerk, Mallory Bishop, said provincial regulation 276/02 of the Act outlines rules around long-term borrowing, with municipalities only permitted to enter into agreements with a bank or other recognized financial institution.
The deal, completed in late July, saw the township pay $1.725 million for the property, which was owned by Andrew Hodgson through his holding company Ontario Vantage Consulting (OVC). Hodgson had owned the land for roughly a year, buying it from Wilson for $1.5 million in 2022.
The purchase agreement between Dysart and OVC stipulated Dysart would assume a $1.45 million mortgage at five per cent interest. It is to run to 2028. Fearrey said the township has earmarked reserve funds to pay off the lump sum, but with interest rates expected to drop over the next couple of months, taking out a loan to cover it – and replenishing reserves – is an option.
Fearrey admitted settling the mortgage early also removes any possible conflict of interest, given Wilson’s involvement in the proposed development of land overlooking Grass Lake. That project, which would repurpose 2.5 hectares of vacant land along Peninsula Road into four lots that would each house multi-storey apartment and condo buildings, has already been supported by Dysart and County councils, but been appealed to the Ontario Land Tribunal. A three-week hearing is scheduled for November 2024.
How the deal came together
Wilson said he bought the 91.5-acre parcel for $300,000 in 2018. He was interested in developing the land fronting County Road 21 for commercial use.
In 2019, Wilson said he was contacted by former County planner, Charlsey White, asking if he’d consider selling. By then, he said he’d invested approximately $600,000 correcting drainage issues on a 3.75-acre plot fronting County Road 21, and building an access road, which stretched around 1.5 kilometres into the property.
He said he was told the former Dysart et al council was interested in the land. Wilson said he made a formal presentation to council, offering the land for $1 million – provided he could retain the two lots fronting County Road 21. No deal was struck. Former Dysart mayor, Andrea Roberts, said her council never seriously considered buying the lot.
“We did not want to be developers,” Roberts said. “Being a developer has considerable risk, and when you’re in the municipal world you have to be risk averse. If you’re going to make a bet, it has to be on a sure thing… our goal was more to set the stage as best we could for development.”
When the potential deal fell apart, Wilson connected with Hodgson and agreed to sell to him.
Late to the party
Immediately following the 2022 municipal election, Fearrey said he reached out to Wilson about the land, but was too late. Wilson said he pitched to Hodgson that Dysart was again interested in the property. By this time, Hodgson said he had invested around $225,000 adding to the access road.
Fearrey said, “we were told the price was the price. I negotiated a bit, but Andrew wanted his money back plus whatever he’d invested into it… either you do the deal, or you don’t. And we wanted to make a deal,” Fearrey said.
Hodgson also retained the 3.75-acre plot fronting County Road 21, with the township agreeing to cover any survey costs associated with the site.
The mayor said the township didn’t seek an appraisal of the property and opted to use Hodgson as their real estate representative in the deal. Fearrey said that saved the township in the region of $90,000, with Hodgson not taking any commission.
Asked if the township had considered any other property – notably a 780-acre site on nearby Moon Road listed at just under $2 million, Fearrey said they didn’t shop around.
“We felt this was a one-of-a-kind opportunity. In my eyes, it’s the last chance for Dysart to meaningfully grow. There is no other property like that, no other acreage around that is as developable as this land. If I didn’t think this was a good deal for the municipality, I would have never made it. I don’t think this is a risk at all.
“The other benefit is that it backs onto municipal property on Industrial Park Road. So, there could be two access points, which is a big deal. That was a big reason why we bought it, too.”
Fearrey said once he settled on terms with Hodgson he took the proposal to council where, in-camera, the other six members unanimously supported the purchase.
A County-based real estate agent, speaking to The Highlander anonymously, said they were surprised by this deal. They noted the cost of vacant land had dropped, on average, by 20 to 25 per cent over the past year. They also said 100 acres of vacant, non-waterfront land in the County typically costs between $300,000 and $500,000 – or $3,000 to $5,000 per acre. The township paid approximately $19,000 per acre for this land.
Fearrey felt the parcel is well-worth what the township paid given its proximity to Haliburton village and the work that’s already been done to it; a sentiment shared by Wilson.
“I know that property like the back of my hand… this is a tremendous deal for the township. It’s worth way more than what they paid,” Wilson said. “The only reason I sold for what I did was because I wanted to see it developed… and I didn’t want to do it anymore.”
Hodgson refrained from commenting on specifics of the deal, saying only that he “believes this is a very exciting opportunity for Dysart.”
Authorities weigh in
The Highlander reached out to several provincial authorities and agencies for comment on the deal. With Fearrey previously going on record to state the township would not develop the land themselves – instead looking to sell, potentially for profit, there were concerns this could be seen as speculating on real estate, therefore an inappropriate use of taxpayer dollars.
Sherine Williams, spokesperson for the Ministry of Municipal Affairs and Housing, said there were no concerns given the land is earmarked for development. “Municipalities have the tools to make decisions regarding local matters, including related to the acquisition and disposal of real estate by the municipality,” Williams said.
Ashley Bursey, from the Ontario Ombudsman’s office, said there hadn’t been any official complaints over the deal. “We don’t comment or speculate on matters we haven’t reviewed.”
The Real Estate Council of Ontario (RECO) administers the rules real estate agents, brokers and brokerages must follow provincewide. Commenting on Hodgson representing both sides, RECO said, “multiple representation is prohibited in Ontario unless necessary disclosures are made and the parties consent.” Hodgson did disclose his interest in OVC and Dysart did consent.
Next steps
Fearrey said council intends to move quickly, wanting to see ground broken within two years.
The mayor said at least three developers had already reached out about partnering with the township. However, he said a thorough assessment of the site is needed before any decision is made. He wants the township to hire a consultant to provide a roadmap for the best path forward.
Fearrey said the bulk of any project will centre on residential development, but feels the site could be the perfect home for a new arena and curling club. He said he’d like to see the current facilities, on Mountain Street behind town hall, transformed into high-density housing. He feels there’s enough space at the CR 21 property to accommodate another long-term care home, too, noting the township has been in contact with Extendicare.
He noted council is negotiating a deal to expand the sewage treatment plant to accommodate any development at the site.
“It’s going to take us some time to get our ducks in a row. I think we need a consultant if we’re to do this right. We need a development strategy. This is bigger than just a one-off housing project. This is like building another community. I think, once done, this can be a real model in Haliburton County,” Fearrey said.
