Sitting on gold

OTTAWA — Robert Parks is sitting on gold. One hundred acres of it on Eagleson Road, just south of the Hope Side Road, where you can see the new townhouses from his front door. You can also watch a tower crane slice the air as builders erect monster homes. The 35-year-old landowner owns the first farm south of Kanata, now part of Ottawa, and he figures developers will easily spend $35,000 an acre to get their hands on it.

Urban developers have swooped in on farmland straddling urban Ottawa, dazzling area farmers with cash they once dreamed of. Parks sold a parcel of land last year to developers, he said. A Calgary firm called up and he agreed to the sale right over the phone.

"You’re in a whole different ball game when you live this close to the city," said Parks, adding that as you move one concession south, the priced drops by $10,000 an acre.

Next door is his former dairy farm. He sold the cows and quota two years ago and now crops 800 acres. He also started a property management company, handling snow removal and landscaping for area shopping centres. He decided: "Why fight the city when it’s coming at you?"

He added that it’s hard for farmers to pass up offers. "You can sell one acre here and buy 10 acres somewhere else" and not be bothered by urban sprawl, he said. The difference in price paid by speculators and farmers is jaw dropping. A farmer will already pay up to an impressive $5,000 an acre for Class 1 and 2 tile drained farmland but that just doesn’t compete with urban land stock jockeys.

Between Parks’s farm, his new house and corn field, and the south side of Hope Side Road, across the road from the townhouses, is a

300-acre cornfield. It’s just south of the urban zoning boundary. The asking price is $19.5 million. That’s $65,000 an acre. The land has been for sale for four years and Ottawa land appraiser Sean Michel figures the seller will get at least $45,000 for it. He noted that "farmers are getting paid ridiculous prices. It throws everything out of whack."

Michel knows of two parcel of farmland south of the urban boundary: one is selling for $75,000 an acre, while the other is selling for $50,000 an acre.

Demand is based on speculation that the city will move out its urban zoning boundary, he said. "But will the city extend the boundary in eight, or 10 or 12 years? That’s the great unknown."

Some properties sell on condition that the urban boundary will move, while other properties are tied to options to buy. In many cases, the landowner gets paid a healthy annual fee to keep the purchase agreement alive.

The Calgary firm that Parks sold to has bought up about 1,600 acres south of Ottawa in the past year. The purchases appear to be speculation on behalf of hundreds of oriental investors.