Troy Shantz and George Mathewson
Sarnia’s decision to call for new proposals for the former Sarnia General Hospital lands has opened old wounds for a group of local investors who thought they once had a deal.
The five investors entered into a legal agreement with the city in September of 2014 to purchase the derelict hospital site for $1,000 and redevelop it into a $15-million medical campus.
“Everybody was so excited that we were doing this,” Mark Lumley said of the investor group, which includes Charles Dally, Alex Jongsma, Kenn Poore, Marty Raaymakers.
The group has expertise in real estate and building development and collectively owns or operates more than 30 buildings including residential, commercial, retail and agricultural holdings.
Lumley said former city planning director Jane Cooper saw the medical campus as a perfect use for the boarded-up Mitton Street property.
“To quote Jane, ‘It’s a jolly good idea,’” he said.
But the deal came unraveled in March of 2015.
First, council passed a resolution tabling the zoning application pending the receipt of three things: independent property appraisals, a demolition cost estimate and final determination of the property’s ownership, which was still unclear.
“Those three questions all could’ve been answered by the city solicitor … Scott McEachern, who was sitting right there,” Lumley said.
Lumley claims the city had a health ministry document indicating it had authority to sell the property.
“The fact of what it’s worth is irrelevant at that time, because, again, they had already signed an offer of purchase. When you sign an offer of purchase, one of your conditions can’t be, ‘Wait a minute, I want to double check and make sure I’m getting a good deal here.’ You can’t, (but) it’s a moot point now,” he said.
Later, council voted down a recommendation from staff to negotiate a six-month extension on the purchase agreement.
When that failed, Coun. Mike Kelch moved to table the proposal and that passed in a 6-2 council vote, effectively nullifying the contract.
When contacted, Kelch said the five investors have a right to their opinion, but it’s now two years after the fact.
“It was the majority of council that voted in favour,” he said. “I just think there was an unease.”
He added: “I certainly have no personal animus against the proponents.”
City manager Margaret Misek-Evans admits she and her staff weren’t expecting the tabling resolution from Coun. Kelch.
“I think that council felt that there was still uncertainty around the site,” she said.
The city’s focus now is on moving forward, she said.
Last month council authorized staff to issue a request for proposals for the hospital sale giving proponents 90 days to respond. Not included is the emergency services property used by Lambton County’s EMS.
The old Sarnia General is an eyesore that’s been heavily vandalized and won’t attract more than a nominal sale price, Misek-Evans notes in a staff report.
Nevertheless, it could have redevelopment potential for affordable housing or a residential addiction treatment facility, the report notes.
In fact, senior administrators from the city and Bluewater Health have already formed a “cross-functional” team to support the process and facilitate any inquiries about a residential detox centre.
“We’re focused now on the new process,” Misek-Evans told The Journal.
“And that process is open to everyone, including any of the original five, who may see their way through to participating again.”
Lumley said the group hasn’t ruled out the possibility of throwing its hat in the ring a second time.
“We’ve kicked around everything from ‘not till hell freezes over’ because of the way we were treated last time, to the other extreme,” he said.
“So I don’t know. Our initial position, way back then is the same as now — we want to do things that’ll help the city prosper.”