The University of Saskatchewan, second only to the city itself among Saskatoon urban land owners, is ready to start maximizing its investment.
In 2009, the university set forth a plan to consider the re-use of nearly 1,000 acres of land ready for development in order to capitalize on its potential going forward. The university has purchased land in Clavet to begin moving some of its agriculture programs out of the city limits.
So what happens next?
Bring it on
The lands in question stretch from the east riverbank to just east of Circle Drive. There are 15 parcels, including the main campus and Innovation Place.
This model isn’t new to the university, as it has already been employed at Preston Crossing and the new College Quarter.
(Site plan for the University of Saskatchewan’s proposed development.)
Competition could be tricky
One slight hitch is the City of Saskatoon controls the inventory of available municipal land, as is the case in other major urban centres. The land the university is bringing on would be direct competition to the city’s inventory.
A partnership between the city and the university will be vital to seeing this development take shape. The challenge is both parties will have to agree on the vision. Each side has unique and significantly vested interests.
The university would be able to collect revenue while still retaining the real estate. Though it’s not stated in its intentions, it could sell it as improved at any time.
Developing and selling land generates revenue for the city, a benefit it will want to protect. Bringing on the university property for medium-density housing could make the city’s land inventory less desirable.
Yet each side needs the other. The university will require the city’s blessing regarding items such as zoning and servicing to move forward. The two parties will need to tread carefully as each looks to achieve its agenda.
The university has explained it seeks a vision for the land that brings “higher design standards to its development than exist in the average new Saskatoon neighbourhood.” The city can’t help but feel slightly stung by the comment.
The gift that keeps giving
The land, five kilometres from downtown, was initially purchased by the university when it was on the outskirts of the city. This type of “gift” to itself has tremendous potential.
The university laid out a financial analysis in a 2009 report titled Vision 2057. The lands are assessed parcel by parcel for 50-year plans. The university estimated different densities against a mix of residential and commercial users.
The university’s working scenario assumes a phased-in build-out of 780 acres over 70 years with primarily residential uses, reserving approximately five per cent for commercial use. This excludes the main campus, Innovation Place and Preston Crossing.
Under this scenario, the leases are pre-paid on 99-year terms during the span of 2042 to 2048. Renewals are based on 30-year terms.
The endowment is created with revenue from the land leases. The capitalization rate in this scenario is seven per cent per annum.
Using a medium-density forecast, which is most likely, the land would be comprised of mixed residential uses, including single-family, townhomes and apartments. This would result in $339 million for the endowment by 2048 and the sum of annuities for annual university expenditures would be $233 million.
Surely the city is concerned with settling 120,000 to 180,000 people where there were none. Issues like traffic congestion and transit must be addressed.
Likewise, residents in immediate proximity to the area are unlikely to be excited about the import of additional neighbours. City councilors are asking for as much consultation with the public as possible.
The university also has to contend with the Meewasin Valley Authority, which has jurisdiction over development near the river. It can nix any proposal it views as dangerous to the river valley.
There are very few residential developers that will be interested in land lease development. Preston Crossing has obviously succeeded as a retail development, but multi-family will present different challenges.
Success in attracting developers will depend on the overall vision and controls the university sets on the land use in its plan.
It’s clear this will take extensive planning and time to come to a conclusive plan that will please all parties involved. How quickly that can be achieved is anyone’s guess.