Photo: Unison HM Commercial Realty

Novem Pharmaceuticals has announced it closed on a final purchase agreement on the former BC Tree Fruit cold storage facility on Sexsmith Road.

Colin Davison, Novem Pharmaceuticals CEO, did not reveal the final purchase price but said it was significantly lower than the original asking price of $38 million.

The property was most recently listed for $23.9 million on Feb. 6, a reduction of $4.1 million.

"It was quite a bit lower," Davison says.

Novem initially entered into a purchase understanding and a lease agreement but that deal fell through once they realized the building needed what Davison described as 'expensive structural upgrades.'

The transaction is scheduled to close on March 31 subject to court approval on or before Feb. 28.

Novem began operating the facility on an emergency basis back in September.

“Growers, Farm Credit Canada and the City of Kelowna all played a role in helping us keep this critical piece of B.C.’s agricultural infrastructure in the hands of the industry and serving the growers and communities that depend upon it,” says Davison.

“Given the current trade environment, strengthening Canada’s food independence and security should be a priority for all levels of government, particularly the B.C. government. Private industry has stepped up but we need governments to value the industry and understand that public-private partnerships are vital to cultivating a sustainable and stable industry; so far the provincial government has declined to provide support of any kind.”

Davison says Novem plans to modernize the building to ensure and extend its future viability.

"It needs some love to make it another 20 years. We'll be putting an immediate $2 million into it, if not $3 million, over the course of the next year," Davison says.

Novem plans to continue apple storage operations at the Sexsmith Road site and they have plans to expand the facility to accommodate future growth plans in its agri-food business.

Davison says with the current climate south of the border, food security and a focus on buying Canadian could help apple farmers.

"Everything with the tariffs only adds more value to this deal being done and ensuring that we can store our own fruit and vegetables."

Davison says the B.C. government is the only partner they did not hear from through the negotiation process.

"We got zero help from the provincial government, and there's still going to be a drastic shortage of storage for the food industry this year. We're hoping that once we close on this building, we can go to the province and try to build an additional facility on this lot, for storage," says Davison.

Novem is hopeful they can work with the provincial government on future funding assistance.

"We're hopeful that the provincial government will put their money where their mouth is and support a project to increase the storage for the food industry, because we just lost 60% of it, with these facilities being sold for some non-agricultural uses," says Davison.

Novem specializes in combining processing and packaging, with cold chain warehouse and distribution services for the agrifood and life sciences industries.