A parcel of land on Nesbitt Drive was purchased back in 2013 with the intention of creating a multi-bay, eco-friendly vehicle wash business called the Rock-N-Wash.
But that property has never been developed, and now the people who own the land have come to Estevan city council, looking for some form of assistance.
Darryl Mack and Sylvain Blouin spoke to council at the March 8 meeting, with Mack appearing in council chambers and Blouin speaking via video feed from Edmonton. In a presentation that lasted about 40 minutes, they spoke about the challenges they have faced over the past eight years, and answered questions from council members.
“A lot of things that people don’t understand about this city is it’s always been a strong place to do business, and we want to make sure, somehow, we can get this business off the ground,” Mack told council.
In a letter to council, Blouin wrote the lots adjacent to their property in the Glen Peterson Industrial Park are now available for $1. They paid $590,105, plus GST, for their parcel.
“The lenders/underwriters are no longer considering our $590,105 plus GST as equity into the project, as they know the asset is not worth that kind of value on the market, with similar lots selling for $1 adjacent to our property,” said Blouin.
Since 2014, they have hired five different capital brokers, and they’ve reached out to over 295 private equity groups, family offices, funds managers, institutional funds, high net worth individuals, but the recurring concerns are market size, economic conditions, population decline and more.
Their lot has been allocated a taxable value of $843,700 since 2017, resulting in annual taxes in excess of $17,200, which Blouin said is unjustifiable considering the downturn in the economy, a wide 10-metre easement in the middle of their property and the available lots for $1.
The easement reduces the value of the property and increases the construction cost.
Blouin asked for a tax abatement on the property retroactive to 2018, as the $843,700 valuation is “unrealistic” considering the circumstances.
And since they did not commence construction within the 180 days outlined in a purchase agreement that was enclosed, they requested a return of the balance of the purchase price.
“We would purchase the lot back from the city for $1 and leverage the remaining capital as equity towards construction,” Blouin wrote.
Blouin said they could have asked for a refund in 2014 or 2015, but instead they have tried to find investors for the project.
He’s also not upset that the city is selling lots for $1 each; in fact, he applauds them for thinking outside of the box to attract business to the community.
“We are dealing with a very abnormal situation here. The fact that we bought from the city, the city back then was not selling the lots for a dollar, obviously. We’re not dealing with the same economic fundamentals back then that we are now,” said Blouin.
Blouin has talked to current and former economic development workers in Estevan about what is happening in the city, the options they have and goals for the business. He has also talked to Community Futures Sunrise, the Ocean Man First Nation, local entrepreneurs, Doug Griffiths with 13 Ways and others.
“When I visited the Estevan community for the first time in 2012 … I loved it. And that’s why, up until now, we haven’t given up,” said Blouin.
Councillor Travis Frank wanted to know how much the vehicle wash would cost to build, and how many people would be employed.
Blouin responded that they have had to scale back expectations. They were looking at a $7 million facility with an automatic truck wash and 16 bays, but that is no longer realistic.
Now they’d have 10 self-wash bays and one truck bay with the caveat that when the economy improves, they could add a second bay, because they have the room on their lot.
“This project, right now, would be a $2 million project. We would work with Frametech, is what we had in mind,” said Blouin. “Originally we were going to go to pre-cast concrete manufacturer outside of the city.”
With the high moisture content of a car wash, the building could rust several years down the road, so they don’t want pre-cast concrete.
Frank also wanted to see the full contract between the city and Rock-N-Wash because he’s never seen a lot purchase agreement like the one signed in 2013.
Rock-N-Wash would have seven or eight employees, between full-time and part-time staff. They would also have the option of having a vehicle detailing division in the facility.
Councillor Shelly Veroba pointed out that those who purchase a parcel for $1 have to meet a lot of conditions. The build has to start, the employees have to be in place and they can’t sell it for an extended period of time.
Councillor Tony Sernick asked why they wanted to purchase the land. Mack praised the location.
“It’s on an industrial, paved section of the city. It’s at the Kensington-Nesbitt intersection, with easy access, four lanes and Walmart’s just next door. The hotels are there.”
You don’t have to go to the bypass or out on a gravel road to reach the site.
“We want to be seen. We don’t want to be stuffed away in the corner somewhere,” Mack said.
Blouin said they still want to pursue this venture, as they believe in the facility which would be environmentally friendly, the water recycling and net zero electrical consumption. But they have two options: go bankrupt, or work with city council to find a solution.
Council tabled the request, and will have the Rock-N-Wash representatives work with the economic development division and committee to find a solution.
