The City of Lacombe could end up paying $750,000 to a developer to bring a major Canadian retailer to anchor a commercial area known as Lacombe Market Square, located on highway 12 on the east side of the city, just west of Pentagon.

Monday night, council gave first reading to a borrowing bylaw to secure the financing through a bank loan. Councillors Thalia Hibbs and Cora Hoekstra voted against first reading.

In briefing notes for council, the money is stated to be used to “fund the revitalization” of the area, and used to “facilitate the development of the lands.”

City officials are not discussing which retailer is being courted.

Coun. Reuben Konnik explained the situation in plain language: there’s a developer selling land in Lacombe Market Square, a new developer wants to buy it but at lower than the asking price, the city is being asked to make up the difference.

Konnik has long advocated to bring more retail options to the city. He admits this would be an unusual method to achieve that.

“It’s not typical and as the mayor alluded to, it’s not something we are happy about doing. We don’t want to be doing this. But at the end of the day, to not get involved would be a huge mistake. The jobs that would be created, the commercial taxes that are created,” Konnik said.

“My eight years on council has always been, we need more commercial investment. We need more businesses, we need more shopping. We need to get more commercial taxes, increase our commercial taxes so our residential taxes can come down and this is a big step forward in that.”

The increased commercial tax base would only be realized once the land is actually developed. If construction on the project does not start within three years, the city would get its money back.

“Could there be potentially benefits? Yeah, there could be down the road and I’m not discounting those. It won’t be tomorrow. The increased tax assessment maybe will be here in three years,” said Coun. Cora Hoekstra.

“But in the meantime, we’re paying off the loan and our citizens have been very critical of … spending that they didn’t see what was coming for their tax dollars. Some of them might be very appreciative of this in the long run, but I just think in the short run, it’s not a procedure I would want to repeat or even be part of.”

On a repayment schedule of 15 years at current 3.2 per cent interest rates, the city’s annual payment on the principal and interest would be about $63,000. Council heard that a half-per cent tax increase would be needed.

Hoekstra also sees the proposal as government interference in the free market.

“I just think it’s precedent-setting and it doesn’t honour the process of free enterprise and I know people have asked for retail options in our city but I’m not comfortable that this is the way we bring new retail,” she said.

“I am uncomfortable with local developers who have invested their money in our city and have followed traditional process. How will this be viewed in their eyes because they have already committed their time and money to our city and we, in some ways, are not honouring their commitment to our city.”

The borrowing bylaw will be advertised for two weeks. After that, electors of Lacombe have 15 days to prepare and submit a valid petition calling for a vote of electors to authorize the borrowing.