Kraft Property Sold

The property once owned by Kraft has been sold – although subject to some unstated conditions.  Kraft closed operations in Cobourg in 2008 and sold the 64 acre property – it was bought in 2014 by a Cannabis company now called FSD Pharma who promised to create the world’s biggest indoor marijuana grow-op. This idea faded and FSD Pharma is now in the healthcare business and had no use for the large facility.  They listed it for $19.9M but it sold for $16.5M – that’s $258K/acre.  The new owner has not been named but seems legitimate since they have made a $660K deposit.  The deal is expected to close on May 31, 2022.  On the property is the Certo building which had been close to demolition before the ACO convinced the Town and FSD Pharma that it should be saved because of its Heritage value.

Kraft Building
Kraft Building

I understand that the original sale by Kraft was to a developer, (Michal Hasek, venture capitalist and Real Estate Broker) who then resold it to FSD Pharma.  One can only speculate if something similar is happening this time.

FSD Pharma was founded when Cannabis was legalized and they talked of hundreds of jobs.  But even now with the property empty, the taxes are $110,000 per year.  A large part of the property is undeveloped land – part of which has been leased to the Town for use as a Dog Park – the Lease expires April 2024.  It’s currently zoned industrial although re-zoning the empty land to allow housing should be possible.

Because it was once a large employer (1200 at its peak but 380 when it closed), and because it’s a large property, the saga of potential users gets a lot of attention.  See the Links below for earlier posts which give an idea of the history of this property.

Links

FSD Pharma Link

Cobourg News Blog Links – ordered by date

Northumberland News Links

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JimT
28 February 2022 7:34 am

Just for the record: it wasn’t “the world’s biggest indoor marijuana grow-op. According to the FSD Pharma Inc. press release of Apr 22, 2019: FV Pharma’s vision is to transform its current headquarters in a Kraft plant in Cobourg, Ontario into the largest hydroponic indoor grow facility in the world.

There are larger indoor grow-ops such as Canopy Growth’s “950,000 sq. ft. of total licensed or pre-license production, and non-licensed operating space at its Smiths Falls Campus” but they are not hydroponic – they just use containers of regular potting soil.

FSD Pharma had 25,000 sq. ft. of production, with plans to expand to “a 220,000 square foot self-contained cultivation facility.”

Just for the record.

Pete M
27 February 2022 10:21 pm

Brockville was able to get Leclerc cookies and biscuits to purchase the closed P&G plant and reopen to make food products

Please take note on the statement from area economic Development office–

Charlie Mignault, commissioner of the St. Lawrence Corridor Economic Development Commission, whose mandate is to attract industry and high quality jobs to the region, says they have been in discussion with Leclerc for around 14 months.

https://ottawa.ctvnews.ca/leclerc-moving-into-former-procter-gamble-plant-in-brockville-1.5753992

Are our fragmented Economic Development offices capable of having the same success here with the old Kraft plant.

I recall in the discussion about new economic development officer for cobourg starting early, people expressed concerns about the individual not being retained long enough-more than year- to have an opportunity for success.

As we can see from Brockville it took 14 months for 300 plus new jobs.

We need a well coordinated economic development plan for the whole area in order to have the same success

Otherwise its just more wash, rinse, repeat of failure

Mark
27 February 2022 4:11 pm

A story from 2009 that Brian Kinmond, president and of TRENTFAB Inc., 
bought the building from Kraft

https://www.northumberlandnews.com/news-story/3762822-vacant-kraft-property-sold/
they probably reclaim enough Stainless steel to pay for the plant
I believe later Trentfab went bankrupt

Sandpiper
Reply to  Mark
28 February 2022 9:18 am

No way They Sold off the 10,000 sq ft building in the front on William st
to the Tax Payers / County
Now used by the County they / we paid approx 75 % of the total cost of the Whole Kraft property leaving Brian Kinmonds group with the Building of approx 700,000 sq ft , 60 + acres and all that stainless steel with Property Tax concessions for about 30 % of the total , and original purchase price from Kraft .

Mark
Reply to  Sandpiper
1 March 2022 7:15 pm

i believe one reason Trentfab got the property so cheap they had to deal with all the environmental concerns

Linda Mackenzie-Nicholas
27 February 2022 3:49 pm

It sure would be nice to have more good jobs made available. I recently did a look at Northumberland re stats can and was surprised to find out that 60% of people in the county receive less than $40,000 in annual income (after taxes) . There has to be a good number of citizens (especially for those who do not already own in full, their own homes) in our county struggling to pay bills, find affordable housing, childcare etc.
Yes lets talk about good paying jobs and get some.

Dunkirk
27 February 2022 1:53 pm

The Due Diligence that was never conducted the last time this important property changed hands should be a good lesson for our community this time around.

In a Press Release as recently as Nov 2018, the company suggested the property was valued at $105,000,000.00
(were we applying property taxes on the basis of this value?)

Who stands to benefit from the apparent loss in value on a pending sale for $16.5mm or the actual capital gain in value from what was actually paid last time? (several obvious due diligence questions will emerge based on those answers…)

Lets ask the tough questions this time of the new owners of their intentions of investment, plans and timing.

Michael Sprayson
27 February 2022 10:22 am

It’s currently zoned industrial although re-zoning the empty land to allow housing should be possible.

On top of that industrial zoning is an ’employment’ designation. According to our town planning department, re-zoning to residential isn’t happening. It’s next to impossible (according to our town planning) IF they do allow that re-zoning, I would say that there is some truth to what Nicole Beatty told me a year ago – which was that the town favours certain developers over others.

I can see why there could be more of a push to rezone. 64 acres is more than my 1-acre lot. And more tax income is generated from that size of residential development. But the vision for my lot was 100% obtainable housing. And, I was shown absolutely no flexibility.

Technically, the re-zoning CAN be done. The town has to be willing. And that is not the experience I have had over the last year. The town has a new planner, and I’m ready to try again after talking to the MPP but again, they don’t make it easy and they certainly don’t make it cost-effective to entice anyone to build obtainable housing in Cobourg.

Conor
Reply to  Michael Sprayson
28 February 2022 9:10 am

Perhaps it could be used for municipal parking enforcement offices, as an example to tax tourists and beach goers for entering your town. Good idea perhaps.

GailR
27 February 2022 10:06 am

Can someone tell me if the price might mean redevelopment rather than long term employment possibilities?

Michael Sprayson
Reply to  GailR
27 February 2022 10:11 am

Gail – what do you mean the price? How are you connecting the price to either option? The price is the price. What the buyer does with it is ultimately up to the steps taken by the buyer.

Stanley
26 February 2022 10:20 pm

Thanks, John. You might add this summary of the property’s history to the links. It’s a great story growing longer by the day!
https://vitacollections.ca/cobourg-heritage-centre/3592218/page/3

greengrass
Reply to  Stanley
27 February 2022 8:19 am

once as prosperous industrial town, with everyone working with GOOD WAGES, to a retirement town in forty years? 

JimT
Reply to  greengrass
27 February 2022 8:44 am

Globalization: it’s when the factories move to where labour is cheapest and “fringe benefits” non-existent, and governments are willing to make the most concessions and accommodations in order to have new industry move into their area.

Make it there, ship it here. It’s the cheapest way to make things these days.

Happening all over the globe, not just here. Get used to it.

Bill Thompson
Reply to  JimT
27 February 2022 9:01 am

It’s called “progress” ….in reality “regress” .
Must always move “forward”
Automation replacing human value all in the pursuit of financial and personal greed.

JimT
Reply to  Bill Thompson
27 February 2022 10:16 am

Really, Bill?
Ditchdiggers instead of backhoes?
Ploughmen instead of tractor drivers?
Store clerks with pencil and paper over scanning cash registers?
Etc.
The use of machines to replace manual labour has created so much of the wealth that we all enjoy and eased all that human suffering in mills, mines, fields and such.

Last edited 2 months ago by JimT
Bill Thompson
Reply to  JimT
27 February 2022 2:33 pm

You’re talking construction etc. …chalk and cheese.
An example I’m referring to is automatic checkout in stores etc replacing employment for people.Been shopping lately at your larger stores ?
Robot Assembly lines in factories etc.?

Last edited 2 months ago by Bill Thompson
JimT
Reply to  Bill Thompson
27 February 2022 7:06 pm

No, I’m not, Bill. “Store clerks…over scanners” isn’t construction. I’m talking about automation anywhere and everywhere.

How can a clerk in a store, doing a job that the customer can do all by herself, expect a level of compensation that will buy a house, car(s), TV, boat, tropical vacations, retirement pension and the rest?

Why pay top wages for such straightforward, routine tasks when those costs have to be added to the price of the groceries and goods we each buy?

Your labour isn’t worth much unless it is highly skilled and specialized these days. Get used to it.

Sandpiper
Reply to  Bill Thompson
27 February 2022 11:43 am

From what I heard a month ago
you just might be right about whats about to happen here .

Kevin
Reply to  JimT
27 February 2022 11:17 am

Yes, Jim T, labour is cheaper in some countries which is a big part of globalization. Environmental concerns are also a factor if a country is willing to accept more pollution. But this is all the supply side of manufactured ‘goods’. The demand side is fuelled by our desire to have bigger houses requiring more stuff. We want it now and we want it cheap. Why do we need to have appliances that connect to the internet and our smart phones? Save lots of money by not buying a smart phone and thermostats, light bulbs, microwaves, etc. that connect to them. Simple appliances can do the required task well and last longer. Does your quality of life improve with more and bigger bathrooms? How many TVs can you watch at one time? With automation, labour is becoming less of a factor. A much smaller but more educated/trained work force is required to maintain the robots that build the ‘goods’. What will people who are not able to learn to maintain the equipment do? Some people can be very good at manual labour and not able to operate modern equipment. Do these people not deserve to be useful members of society?

Hopefully the former Kraft property will be used to help people find productive ways of contributing to society. That could be in the creation of long-term jobs requiring different levels of skills.

Jeffy
Reply to  Kevin
27 February 2022 3:56 pm

The property will likely become a housing development for retirees like the rest of the town.

Bryan
Reply to  JimT
27 February 2022 4:25 pm

JimT:

Supply chain economics are not the “exact science” you might expect. This has a lot to do with the information silo effect within companies and the departmental KPIs. Purchasing buys goods at the best negotiated supplier price, often without consideration of the many downstream costs (such as shipping, brokerage, duty & taxes, warehousing, quality inspections, shipping damage/loss, insurance, handling) that contribute to the “on the shelf” cost. The KPIs reward low supplier cost, not “on the shelf” cost.

Some years ago, one of my clients who supplied products to a “name” Canadian retailer, was invited to participate in the retailer’s “on the shelf” cost study. The study concluded that a significant number of products could be sourced in North America rather than the far east (China) at an “on the shelf” cost equal to or less than the “offshore” products.

For a time, my client had increased sales to this retailer, Then they slowly dropped off as the offshore suppliers reacted by improving quality and reducing prices

ben
Reply to  greengrass
27 February 2022 8:59 am

Greengrass whomever you are blaming for this transition you have to understand where it started – the dismantling of the “branch plant economy”.
Thirty years ago the Cobourg and District Labour Council announced, in a full page spread of the Cobourg Daily Star “3,000 Jobs lost in a decade” With layoffs and many Plants shut or moved from Port Hope and Cobourg jobs were gone – poof.
Are you any better off after getting used to “Globalisation”?

greengrass
Reply to  ben
27 February 2022 9:43 am

Globalisation B/S if you don’t have money to buy a product, it does not matter were it comes from?

Wally Keeler
Reply to  ben
27 February 2022 11:14 am

Good question. Canadian Association of Petroleum Producers; Canada imports roughly $550 million worth of crude oil a year from Russia.

JimT
Reply to  Wally Keeler
27 February 2022 12:07 pm

Wally: I’m gobsmacked to read such a thing. I had no idea. And from the CBC news site that I read faithfully every day, yet.
Not only that, but “the U.S. imports even more than that” according to the expert quoted in the article.
Who knew?


Last edited 2 months ago by JimT
Bryan
Reply to  Wally Keeler
27 February 2022 1:08 pm

Wally,

What section of the Capp website did you get the oil import data?

The Canadian Energy Regulator’s website (CER) has an interesting multi-year analysis of Canadian oil sources, domestic and import. The analysis includes provincial data as well as export. It is interesting that the US is Canada’s largest export oil market and also Canada’s largest import source.
In 2020 there were no oil imports from Russia
In 2019 2.6% of Canada’s imported oil came from Russia, 17.45% from Saudi and 58.9% form the US

A portion of the Canada-US oil export-import is Canadian oil exported from the west to the US and then imported back in the east. This is mainly due to the lack of oil pipelines to Quebec and the East coast. Also, Canada’s eastern refineries can’t process the heavy oil sands crude.

https://www.cer-rec.gc.ca/en/data-analysis/energy-markets/market-snapshots/2021/market-snapshot-crude-oil-imports-decreased-in-2020-and-so-did-the-cost.html

Wally Keeler
Reply to  Bryan
27 February 2022 1:54 pm

Go here Canadian Energy Markets | Oil and Gas Imports and Exports (capp.ca)Despite having the world’s third-largest oil reserves, Canada imports oil from foreign suppliers. Currently, more than half the oil used in Quebec and Atlantic Canada is imported from foreign sources including the U.S., Saudi Arabia, Russian Federation, United Kingdom, Azerbaijan, Nigeria and Ivory Coast. In 2019, Canada spent $18.9 billion to import foreign oil.” Beside that is a graph of ships denoting the imports from each country. Russia is indicated as selling us $554,000,000 of crude oil.

Bryan
Reply to  Wally Keeler
27 February 2022 4:40 pm

Wally,

Oil reserves are only valuable if the oil can be refined and transported to market. Canada’s eastern refineries can’t process heavy oil sands crude. Further, the pipelines don’t extend much east of Ontario. The supply system is built to deliver to the US and Canada does not get world market price for this oil. It is discounted by about 20%. Efforts to expand the supply system to the west coast which would enable supply to the far east (Japan, China, S Korea) have been limited.

On net, Canada is an oil exporter, but could do much better if markets other than the US could be developed. Further, investment is needed to upgrade Canada’s refinery stock to be able to refine oil sands crude and produce a wider range of products, as demanded by the market.

Wally Keeler
Reply to  Bryan
28 February 2022 9:46 am

The point being made is that Canada buys $550,000,000 crude from Russia. Canada can use that money to increase purchases from UK, US, Azerbaijan, Ivory Coast, Nigeria, all of whom are delivering the crude that Canada needs.

Bryan
Reply to  Wally Keeler
28 February 2022 10:08 am

Wally,
Are you suggesting the buy oil from Russia decision should be a political one rather than economic?

As for economic reasons, the Russian oil may have cost less. It could be a “swap”, Canada buys oil, Russia buys tech/grain/machinery. It could be that other exporters had no oil available.

There could be many factors involved. It’s likely not as straight forward as you seem to be suggesting. Note that in 2020, Canada bought no oil from Russia.

Last edited 2 months ago by Bryan
Ken Strauss
Reply to  Bryan
28 February 2022 11:30 am

Bryan, so it is reasonable that importing oil from Russia is an economic decision but it is acceptable that the lack of a pipeline from Canada’s west is a political decision? That logic makes rather little sense to me.

Wally Keeler
Reply to  Bryan
28 February 2022 1:27 pm

Are you suggesting the buy oil from Russia decision should be a political one rather than economic.

If necessary, yes. However, all I have done is post the numbers, and source. I am not suggesting anything. If we imported zero from Russia one year and it was painless, then we can do it again. No need to resort to the Emergency Act.

Jeffy
Reply to  Bryan
27 February 2022 4:01 pm

Note that no oil has to be imported. Alberta and Saskatchewan have plenty of oil for the the entire country. But the east doesn’t get western oil because the west lacks Liberal votes.

Bryan
Reply to  Jeffy
27 February 2022 5:15 pm

Jeffy,

Oil is exported in the west and imported in the east, resulting in a net export, not “no import”.

The east doesn’t get western oil because the pipe doesn’t go that far and the refineries can’t refine the heavy tar sands crude. It has little to do with the lack of liberal votes. The west would gladly sell it’s oil to eastern Canada at market price rather than the discounted price to the US. Investment is needed to extend the pipeline and upgrade the refineries. That’s private sector, not government, regardless the stripe..

Last edited 2 months ago by Bryan
Ken Strauss
Reply to  Bryan
27 February 2022 5:48 pm

Bryan, your comment is somewhat misleading. Of course western producers would be happy to sell their oil to the rest of Canada. However, the political importance of Quebec means that a pipeline has not been built and likely never will be built.

greengrass
Reply to  Jeffy
28 February 2022 9:08 am

the East Lacks a pipline!
you can’t refine crude if you can’t get it!

greengrass
Reply to  Bryan
1 March 2022 8:32 am

if they had a supply pipeline surley they could gear up to refine crude?

Ken Strauss
Reply to  ben
27 February 2022 5:00 pm

Ben, you need to go farther than only 30 years back to trace the demise of Canadian manufacturing. The decline started at least as early as 1924 when protective tariffs on agricultural machinery and automobiles were reduced as part of the consequences of the 1910 western farmer’s protest in Ottawa.

Last edited 2 months ago by Ken Strauss
ben
Reply to  Ken Strauss
27 February 2022 6:19 pm

Ken if you study the growth of the plants along the Lakeshore after WW2 and then the deindustrialisation of those plants in the 80s it was a much larger boom and bust then the 20s. I would say the impact of the loss of at least 10 or 12 large manufacturers in PH and Cobourg in ten years was dramatic.

Jeffy
Reply to  greengrass
27 February 2022 3:53 pm

So was every town at one time. Companies don’t have to pay union wages in other places, so they leave.

Gerinator
Reply to  Stanley
27 February 2022 12:52 pm

Thanks Stanley. Quite neat. As a major consumer of Tang, in my youth, it is quite cool to learn that Tang was a serious product in this Town.