The City of Lacombe will intervene in the free market in an attempt to bring a “major Canadian retailer” to Lacombe Market Square, at a cost to taxpayers.

It will do so by purchasing land at the east end site, and selling it to a developer at a $750,000 discount. That difference will be financed through borrowing, which council authorized during its meeting on Monday night.

Council gave second and third readings to the borrowing bylaw, with councillors Cora Hoekstra and Thalia Hibbs voting in opposition.

Paying off the loan will require an increase in taxes by about 0.5 per cent. On a home valued at $327,000, one would pay an extra $13 per year during the 15-year term.

There are only so many details being made public at this time. Neither the name of the developer, nor that of the proposed retailer, have been released.

Mayor Grant Creasey said the retailer is a “very large national chain.”

“I think it speaks highly to their credibility,” Creasey told reporters after the meeting.

The developer’s obligation is to build a retail store that measures 25,000 square feet. Once the development agreement has been signed, the developer must apply for a permit in 30 months, start construction in 36 months and complete construction in 48 months.

If construction does not start in three years, the city would recover its money by registering a lien or mortgage on the land title.

A sidewalk running through Lacombe Market Square is overrun with vegetation.

Lacombe Market Square, previously known as Wolf Creek Crossing, is a mixed-use development located on Highway 12 at Wolf Creek Drive. Plans for it included commercial, residential and industrial uses. The title belongs to the Canada 1 Corporation, which bought it in 2014.

The city does not have any existing investment or financial stake in Lacombe Market Square.

During Monday night’s debate, the question arose of whether it was the city’s place to spur development this way.

“We are here to have good governance, provide services and have a safe community,” said Coun. Cora Hoekstra after the vote. “I didn’t see this as a role of good governance. That was my guiding principle.”

Coun. Thalia Hibbs described the situation as treating taxpayers as “reluctant investors” without giving them sufficient information to properly weigh the risks. She added that "public money should be for public services."

“When we met with our lawyer and as council, we talked about what is the most transparent and most above-board way that economic development can occur, this was the mechanism that came out on top" — Chief administrative officer, Matthew Goudy

However, the majority on council saw it as an opportunity to expand retail options in the city.

“It was probably the top concern that myself and many other councillors had throughout the election process. What people in Lacombe wanted was increased retail opportunities and from the feedback that we have received, people are willing to spend some tax monies in that regard,” said Creasey.

As well, they’re counting on increased tax revenues that would result from higher assessment values, between $106,000 more per year to as much as $171,000, depending on how much improvement is done to the property.

“Keep in mind this one store, it is our hope that will lead to significant development of adjoining stores. It’s not just the one on its own,” Creasey said.

Coun. Don Gullekson cited those increased tax revenues when he voiced support for the borrowing. When addressing the concern that a precedent would be set for businesses to make similar requests in the future, he said council would be willing to support them if a project like this one came forward.

Chief administrative officer Matthew Goudy said the city considered other incentives for economic development, including tax forgiveness and providing servicing.

“When we met with our lawyer and as council, we talked about what is the most transparent and most above-board way that economic development can occur, this was the mechanism that came out on top,” Goudy said.