Fort McMurray hotel items auctioned off amid economic uncertainty
David Thurton | CBC News | Posted: January 20, 2017 2:00 PM | Last Updated: January 20, 2017
‘I anticipate we are going to have another busy year of auctions and liquidations’
Almost everything was up for auction this week as one of Fort McMurray's largest hotels closed up shop.
Items from the iconic Sawridge Inn and conference centre — including TVs, plates, artwork and cars — were up for grabs over an eight-hour period Wednesday as bidders battled over goods displayed in the banquet hall.
Century Services general manager Mickey Spencer said his auction company remains busy as the province rides out low unemployment and a sluggish business environment.
"Absolutely," Spencer said. "It's no secret what's going on in the Alberta economy."
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Alberta's economic downturn has been described as one of the worst in the province's history. Alberta's gross domestic product was set for a three-per-cent contraction in 2016, adding up to a 6.5 per cent total loss since the downturn started in 2014.
The decline in oil prices and the shutdown of oil production during the Fort McMurray wildfire in the spring dealt a blow to the province's petro-based economy, and to the oilsands capital itself.
Spencer said his company six years ago did two or three company auctions annually. Now it handles between six and a dozen a year.
"Yes, that's our job — to extract the highest dollar out of every piece we have here," Spencer said.
Commercial and industrial companies, many going into receivership and bankruptcy, turn to his company as a fast alternative to selling their excess stock online, he said.
"That's not what happened with the Sawridge hotel, but we do a lot of business in that side of the world," Spencer said.
'It's sad'
The closure of the 188-bed Sawridge hotel and conference centre is not a happy event for Sawridge Group of Companies CEO John MacNutt, who looked on in the banquet hall as one by one almost 600 items went to the highest bidder.
"It's sad," MacNutt lamented. "One of my very first projects joining the Sawridge was to oversee the renovation adding the conference centre."
The 35-year-old Sawridge used to be the go-to facility for conferences and accommodations for the oil town, MacNutt said.
But the Indigenous-owned company faced a market downturn, competition from new Fort McMurray conference and concert facilities, and the explosive expansion of oilsands camps. The hotel and conference centre also needed major upgrades, which the company decided wasn't worth the money in the current market.
"Given the nature of the wood frame structure," MacNutt said, "it really didn't warrant making that big of an investment."
But the company hasn't given up on Fort McMurray. A year ago the firm built a smaller but more upscale 151-bed facility closer to the oilsands sites outside of the city's downtown core.
'We see the long term potential of this town'
Still, some of Fort McMurray's commercial landlords say they've seen business after business leave town.
In November, several landlords and one of the city's largest commercial real-estate agents told CBC News they've seen higher vacancy rates, and the cost of leases cut in half, because some renters could barely afford to make payroll.
But where one company sees the end of the road, another sees the beginning. Summit Chevrolet GMC Buick purchased the Sawridge Inn and plans to expand its Fort McMurray dealership and consolidate its nine locations under one roof on the site.
"We feel that it is our responsibility to look to the future," Summit general manager Trevor Christensen said, "And we see the long-term potential of this town."
The Wood Buffalo municipality's economic development office remains positive about Fort McMurray's present and future.
Manager Amanda Haitas said Fort McMurray expects to see a spring building boom when thousands of labourers flood into the city to help rebuild over 2,400 homes destroyed in May's wildfire.
She said she would tell prospective hotel developers looking to invest in Fort McMurray that they don't need to be shy.
"There's is going to be a busy vibe here in the spring and people will need places to stay," Haitas said, "And people will need a bed to sleep in."
Nevertheless, Century Services expects its auction services will be in demand for some time, despite any longer term improvements to the economy.
"I anticipate we are going to have another busy year of auctions and liquidations," Spencer said. "Just because it takes a while for the economy to recover."