I meet Bonnie Thomas in a small trailer that serves as the temporary headquarters of the Switz-malph Culture Centre, located on a reserve of the Neskonlith Indian Band. The centre, just west of Salmon Arm, B.C., has a display of native artifacts and some information boards for visiting schoolchildren. After we talk for a while, Thomas leads me along a path that runs past several traditional native dwellings and then into a lush forest.
The ground beneath our feet grows boggy because the Salmon River has recently flooded, swelling dozens of metres beyond its banks. “We just let the river do what it wants to do without trying to change it,” Thomas muses, waving away swarms of mosquitoes.
Eventually, we have to stop because the puddles are getting too deep. The site of a future power centre mall, to be anchored by Walmart, “is just down around the corner and directly across the river,” she says, gesturing into the trees. “People don’t have any idea how close it is.”
Water matters here in Salmon Arm. Nestled in the mountains of the North Okanagan, this is the sort of place that gives British Columbia its reputation as North America’s quality-of-life capital. The picturesque city of 17,000 spreads out in a leisurely crescent along Salmon Arm of Shuswap Lake, a spectacularly beautiful finger lake. The CP freight trains that rumble through town offer a reminder of the region’s resource-industry roots. But today, Salmon Arm is home to lots of hale retirees and enough big-city refugees to give the downtown a sophisticated vibe. There’s a repertory theatre, an art gallery and a roots-music festival. Yet Salmon Arm also attracts Alberta ATV enthusiasts, houseboaters and bikers who roar through for an annual rally.
In short, Salmon Arm seems to have a bit of everything—everything, that is, except a power mall with national retail chains, just like the ones crowding the fringes of Vernon, 40 minutes to the south.
But, barring the success of a pending appeal, that deficit is about to be corrected. After a long and divisive battle, construction on a 240,000-square-foot mall will begin this fall on the site pointed out by Thomas. It covers 21 acres of what had been designated agricultural land, straddling the flood-prone delta of the meandering Salmon River, which empties into Shuswap Lake. The correction also means that Salmon Arm, a place proud of its identity, will see its urban form merge with the scores of other Canadian places that have hitched their futures to the vision of Mitch Goldhar.
Goldhar is the owner of SmartCentres, the Toronto-based developer that emerged from nowhere in the early 1990s to become Canada’s most successful shopping centre builder. It rapidly became synonymous with “power centres”: uncovered shopping centres featuring large-format retailers surrounding a parking lot so expansive that customers often take trips within the lot. SmartCentres’ success is thanks in large measure to a joint venture with a famously transformative retailer that put Bentonville, Arkansas, on the map.
It’s the only such relationship that Walmart has anywhere in the world. Since 1994, SmartCentres has invested $8 billion to build 47 million square feet of power-centre retail malls, and has almost that much again in the pipeline. Over the course of its history, the company has, on average, opened a mall every three weeks. Walmart is almost always the lead tenant, taking an equity stake in each project.
About a decade ago, Goldhar began selling his malls to real estate investment trusts to raise capital because Canadian banks couldn’t keep up with the company’s voracious cash flow needs. In 2002, he forged a relationship with Calloway REIT , then a small Calgary-based operation. Since then, SmartCentres and Calloway have all but merged. The REIT operates out of SmartCentres’ head office, and Goldhar owns a 25% share. SmartCentres and Walmart obtain fairness valuations on each completed shopping centre, and then flip them over to Calloway’s unitholders, who have seen the trust’s asset value explode from $100 million to $5.7 billion. A dollar invested in Calloway units nine years ago is now worth $18.
It has certainly not been a controversy-free run. In his office, Goldhar keeps two phonebook-sized binders packed with doom-and-gloom news stories published in the years after Walmart arrived in Canada. Since then, Goldhar has carefully attended to the image of his companies. In 2005, he hired Liberal insider Sandra Kaiser, a former aide to John Turner, to run Smart Centres’ government relations and communications operations. A few years ago, he rebranded the company, deploying a trio of friendly cartoon penguins in its logo. And like many developers, SmartCentres has made large donations to good causes such as children’s charities.
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