December 8, 2019

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City planning to sell St. Boniface land to Parmalat for new milk processing plant

Industrial land in St. Boniface could soon be the new home of an expanded Parmalat Canada Inc. plant, thanks to a deal struck with the city and province.

In an effort to keep the dairy company in Winnipeg, the province and city offered the dairy producers a deal to help fund the sewer and water servicing infrastructure for the proposed 15-acre site.

At a special property and development meeting on Tuesday, city officials recommended selling 15 acres of land at the Prairie Industrial Park to the company to construct a new milk processing plant to replace the company’s current facility on St. Joseph’s Street in St. Boniface.

According the report, Parmalat will invest $50 million in the project.

If approved by council on Wednesday, the city will be required to service the area with water and sewer facilities, which will cost an estimated $8.2 million.

Parmalat will contribute $1.5 million of that, the province will contribute $2 million and the city will contribute $2.1 million.

The remaining balance of $2.9 million for the servicing costs will be offset by sale proceeds.

Mayor Brian Bowman described it as a positive step by the city to facilitate agri-business in the city.

"What we are signalling is that we want to work with the business community. Today’s efforts are really to create an opportunity with Parmalat and they’ve stepped up," he said.

Parmalat’s future in Winnipeg was in jeopardy after the city moved to rescind a joint venture between the city and Terracon to develop 237 acres of unserviced, vacant, city-owned land at the Prairie Industrial Park. They could not agree on which party would cover the cost of provincial education taxes at the development.

This left Parmalat, who was in talks to build on the site, reconsidering its future in Winnipeg, said chief administrative officer Doug McNeil.

"Parmalat did say quite clearly if they cannot expand their operations specifically in Winnipeg, they would have to seriously look at a new operation outside the province of Manitoba," he said Tuesday.

There are currently about 50 to 60 employees at the old plant, with more expected to be hired with the expansion, McNeil said.

McNeil said the province had no interest in helping facilitate the joint venture with Terracon, but was "very interested in Parmalat."

He noted the city may have to repay Terracon for some of the costs the development company incurred prior to the cancellation of the joint venture; McNeil did not know the amount the city would have to repay.

Properly and development committee member Coun. Russ Wyatt expressed concern that the remaining acres will stay vacant now that there is not a joint venture agreement with Terracon to develop the rest of the land.

He was the sole vote against the deal at the meeting, citing concerns over the changing of the report’s title and the short window he had to read the report.

"I am not going to vote for a report that is changed literally as we are sitting in a meeting," he said. "What else could they have changed?"

The report will be considered by Bowman’s executive policy committee Wednesday at 9 a.m. before going to council for approval later in the day.

kristin.annable@freepress.mb.ca

— with files from Bartley Kives

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