The Town of Vermilion will retain ownership of the Midtown Medical Building following a council motion.
The item was first presented to council on Dec. 2 and administration recommended selling the building. It came as administration was not looking to continue being landlords of the building.
Read more: Vermilion looks to sell medical building
The item returned to council chambers on Dec. 16 with additional information, including the money the facility makes.
“In 2021, administration at the town pulled (support) for the medical clinic building. By removing that service, the town did decrease the lease payments to offset that and then the town was no longer in a deficit position for this property,” said Marilyn Lavoie, the town’s director of corporate services.
The town also explored the option of keeping the building for medical use moving forward.
“The recommended option if council wanted to sell the building would be to register a restrictive covenant on title for the property and it would be registered on title and enforceable against the future owners,” she said.
According to the town, a restrictive covenant can be placed on a property in Alberta to ensure it’s only used for a specific purpose.
The idea of restricting the use of the building moving forward was something Coun. Kellen Snelgrove was hesitant on.
“The use of restrictive covenant, enforcing and restricting future councils, is something I’m somewhat uncomfortable to do,” he said. “I like the ability for future councils to make their own decisions.”
Town of Vermilion CAO Shannon Harrower explained the covenant could be removed at any time.
“With the restrictive covenant, that is a process we would use through legal. We would register that restrictive covenant, but the town could remove it at any time,” she said.
The town originally took on the building as a way to bring doctors into the community. Harrower also said no private clinics have the ability to recruit their own doctors.
Coun. Sherry Martin explained she’s had multiple people reach out and express their desire for the town to keep the building.
“All three are totally against the sale of this. Their concern is, what’s going to go in that building,” she said.
Administration was also asked what happens with the funds made from the building.
“As of right now, it looks like it goes into the general revenue,” explained Lavoie.
Harrower noted that if council wished to keep the building, the town would need to undertake additional work.
“The first thing would be, we’re going to have to dedicate staff resources to making sure we’re going in every, either two months or three months, to check on the building, all of the equipment in there, the maintenance,” she said.
“We need to make sure that we know every single tenant that’s in there, the lease space and look at reviewing the rental rates to see if they’re still in line with our future needs, our capital infrastructure replacement costs and what we need to put away there. Not all current tenants have leases.”
If the town retained ownership of the building, it would assume responsibility for enforcing regulations.
“That would mean advising tenants if they breach their lease, working with them to remedy the breach, possible termination if those breaches can not be remedied,” said Harrower. “Administratively, that does put us in a bit of a compromising position if we are working to attract and retain physicians to the area. Then, we’re also the landlords of those physicians.”
Mayor Robert Snow commented on the possibility of having doctors throughout the town if the clinic didn’t work out.
“In my mind, if we sold it and the doctors eventually dissipated and aren’t in there, it’s not necessarily a terrible thing if we had clinics throughout the town. There is a value to that,” he said. “I think ensuring doctors have opportunities in our community is important, but opportunities don’t have to be solely around that clinic.”
Coun. Paul Conlon expressed his desire to sell the building but didn’t want the process rushed.
“I am in favour of selling the building at a later date once more due diligence has been done,” he said. “Until then, I don’t want to rush this. I want to make sure that it’s done properly and that everything has been put in place. I know it’ll take time.”
Coun. Snelgrove, who has history with the previous owners, says it’s in the best interest of the town to retain ownership of the building.
“I believe this is a case where the best interests of the town and the best interests of administration are at odds,” he said. “Unfortunately, you guys are going to get the short end of the stick in my opinion. I think at current, the town is better served by continuing to own this building.
“It’s in a positive cash-flow position, there’s no reason why it can’t be. If we have to enforce our rental agreements, that’s not a bad thing. If we have tenants that are unwilling to live up to their end of the contractual obligations, they are probably better off not serving our town in other ways.”
Harrower says they have a board of volunteers who keeps them informed on stats from the clinic.
“Over the last little while, the stats of the clinic have declined. They are not retaining as many clients as they were previously,” she said. “They are finding more and more people are going to nurse practitioners over the doctors at the clinic for various reasons.”
Moving forward, when the town reviews the lease agreements, they’ll be looking for values that are consistent with market value.
Council passed a motion to receive the sale of the medical building as information and to retain ownership of the facility. Administration was also directed to return to council at a future meeting with additional information, including an appraisal, a review of lease agreements, the market value of the leased space and the process required to amend the land use bylaw to explore rezoning the property.
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