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Developer has Southgate site secured despite dairy plant sale

The sale of a milk plant in the Edmonds area to a dairy company will have no impact on a major residential redevelopment planned for the area, says its developer. - Wanda Chow/NewsLeader
The sale of a milk plant in the Edmonds area to a dairy company will have no impact on a major residential redevelopment planned for the area, says its developer.
— image credit: Wanda Chow/NewsLeader

The recent sale of the Safeway milk plant in South Burnaby to a dairy company will have no impact on the proposed Southgate project, says its developer.

In fact, at the moment, Ledingham McAllister still owns the plant site, said its president and CEO, Ward McAllister.

Agropur Cooperative of Quebec announced earlier this month it purchased the Burnaby plant as part of a $356-million transaction with Sobeys that also includes two plants in Edmonton and one in Winnipeg.

That sale still requires regulatory approvals before it's finalized, something that is expected to happen in August, said Agropur spokesperson Marc Labelle earlier this month. The Burnaby plant employs abut 70 people.

The 48-acre Southgate community is being planned that would include the former Safeway distribution centre lands, bounded by 11th and 14th avenues and 15th and 18th streets near the New Westminster border, the dairy plant and two city-owned properties at 7701 and 7679 18th St.

McAllister explained that when his company bought the 42-acre Safeway distribution centre site in 2011, it was all a single parcel that included the dairy plant.

The developer has a lease agreement with Safeway to lease the milk plant portion back to them for $1 a year.

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Until the master plan for the redevelopment is complete and approved by city hall, it is not allowed to subdivide the property, he said. When it is, it will subdivide off the milk plant portion. Under the original deal, the developer is obligated to sell it back for $1 to Safeway, which has since been taken over by Sobeys.

When the owners of the dairy plant decide to relocate the operation, Ledingham McAllister has a registered right of first refusal to buy the site back at current market value.

McAllister said he doesn't expect the dairy operation to be a source of conflicts with new homes to be built there. "There's probably six trucks delivering milk there every day … But other than that it's really a very, very quiet use. We're not concerned about it at all."

Both the developer and city hall expected the housing project would have to coexist for a time with the milk plant, he said. But in the long run, it "doesn't make logistic sense" to bring in trucks from the Fraser Valley and back again.

He estimated that the infrastructure of the physical plant would cost about $75 million to relocate.

"They're choosing not to move at this point, but in future they most likely will. And we're planning around that," McAllister said.

"But I may be alive, I may be in diapers or I may be dead … I don't know when they're going to move. But they won't be there forever."

In the meantime it will likely take about 20 years to build out the Southgate community if all goes as planned.

Following a June open house on its concept plan, Ledingham McAllister has applied for a rezoning for its master plan for the development. The plan would guide future rezoning applications for each phase of the project.

The concept calls for a variety of housing types, including up to 20 towers ranging in height from 19 to 46 storeys. At its heart will be a five-acre park with a small lake and meandering stream. The two city-owned parcels on 18th Street would serve as a connection to the City in the Park neighbourhood and the Edmonds SkyTrain station.

Once the master plan is complete, it will go to a public hearing before council makes a final decision.

wchow@burnabynewsleader.com

twitter.com/WandaChow

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