Tuesday, January 15, 2008

River Landing: Saskatoon city council approves Lake Placid sale agreement; City and MVA compromise integrity of EOI/RFP process; cost jumps 20%

Saskatoon city council is forging ahead in its quest to force the development of an upscale “urban village” on the former Gathercole site despite the fact that the proposal being considered does not appear to comply with the city’s stated development and zoning requirements.

At its January 14, 2008, meeting council approved a sale agreement with Lake Placid River Landing Inc. for the sale and development of Parcel “Y” at River Landing Phase I.

According to the report from the city manager (F3 – Sale of Parcel “Y”, River Landing Phase I) the sale price of the 2.43 acre parcel of land is $4.765 million (as per the Request for Proposals).

The closing date for the sale (i.e. the date the land would be transferred to Lake Placid) is to be 20 business days after Lake Placid having fulfilled the following conditions precedent:

a) DCD1 approval by Council pursuant to s. 65 of The Planning and Development Act, 2007 (including entering into a DCD1 Development Agreement);

b) approval by the Meewasin Valley Authority under s. 20 of The Meewasin Valley Authority Act;

c) approval under the South Downtown Local Area Design Plan (architectural controls); and,

d) the issuance of a building permit for the footings and foundation of the development.

The report also notes that in the event that Lake Placid does not obtain the above approvals and permit by October 31, 2008, (or any agreed upon extension), and provided that it has been diligent in pursuing the approvals, the deposit would be refunded to Lake Placid and the agreement would be at an end.

The construction requirement is that on or before June 30, 2009, Lake Placid shall, as verified by the City, complete all excavation required for the construction of the development as indicated in the documentation filed by Lake Placid in support of its application for a building permit.

In the event Lake Placid did not comply with the construction requirement, the City has a 90-day option to re-purchase the site.

Unfortunately, after initially assuring the city it would seek LEED (Leadership in Energy and Environmental Design) accreditation the agreement acknowledges that Lake Placid will not be applying for accreditation for the building. However, Lake Placid will undertake to use reasonable efforts to construct the development to a standard that would match certification level had the development been submitted for accreditation.

The developer does not appear to be receiving any tax breaks or incentives – at least for now.

It also appears that the cost of the project has ballooned by as much as 20%.

In its Sept. 2007 request for proposal Lake Placid indicated that the projected cost of its development was $125 million.

Included in city council’s agenda is a letter dated December 12, 2007, from Dale Anda of Montrose Mortgage (Calgary) to city manager Phil Richards stating that the estimated cost to complete the project is $150 million.

To date no explanation has been given for the apparent $25 million cost increase.

The sale agreement has also revealed that Saskatoon city administration and Meewasin Valley Authority (MVA) do not appear to be concerned with the fact that the developer’s proposal might not comply with development and zoning requirements.

In River Landing complex step closer to reality (StarPhoenix, Jan. 12, 2007) Chris Dekker, special projects manager for the city, said the proposed plan by Lake Placid has remained constant since the original proposal.

“The preliminary plans that have been submitted to city council haven’t changed,” says Dekker.

Dekker also claims that the developer’s proposed plan meets all of the requirements set out in the original concept for south downtown.

Meewasin Valley Authority CEO Susan Lamb says her organization “has found no issue with the proposal so far.”

Dekker and Lamb’s comments are mind boggling.

The expressions of interest issued by the city in May 2007 required a destination attraction/gathering place. The EOI stated that the destination attraction’s purpose is “to build on the downtown’s role as the cultural heart of the city by the development of cultural facilities which can improve economic prospects and encourage tourism.”

City council discussed the issue of a destination attraction at its April 16, 2007, meeting. The report from the city manager (F2 – River Landing Hotel/Residential Site) states:
“Administration agrees that a spa is just one of many concepts that could serve as a destination attraction and is recommending that the provision of a spa be broadened to include other publicly accessible destination attractions allowed under DCD1 guidelines. A destination attraction’s purpose is more clearly defined under “Permitted Uses” within the DCD1 guidelines: “to build on the Downtown’s role as the cultural heart of the city by the development of cultural facilities which can improve economic prospects and encourage tourism”. Suggested uses include, but are not limited to, interpretive centres, theatres, museums, and art galleries.

Proponents will be instructed that City Council’s preference is for a publicly accessible spa. A destination attraction is suggested as a potential alternative, and will be evaluated accordingly.”
There seems to be little doubt about what city administration meant by a destination attraction.

The public component of Lake Placid’s commonplace hotel-office-residential complex consists of a raised plaza that includes a skating rink in the winter and a reflecting pool in the summer. A waterfall is also proposed. These are not cultural facilities and do not constitute the mandatory destination attraction.

It also appears that the proposed uses are not permitted under the DCD1 zoning guidelines. The DCD1 clearly state that the “only permitted uses” are interpretive centres, theatres, heritage facilities, museums, art galleries, amphitheatres, display space, events programming, tour offices, box offices and public institutional offices.

Page three of the EOI warned respondents “to carefully review the DCD1 Guidelines and the Architectural Control District Guidelines.”

The city has not explained how the Lake Placid proposal was able to proceed beyond the EOI stage when it perhaps should have been disqualified.

The only information that the city has provided on the EOI evaluation process – which was conducted behind closed-doors – is contained in the agenda for city council’s June 25, 2007, meeting and offers no specific details about the proposals.

The report from the city manager (F1 – EOI Selection and RFP for River Landing Parcel “Y”) states:
“The Request for Expressions of Interest (Attachment 1) was issued May 1, 2007 with a deadline of June 15, 2007. During this period, the City engaged a local marketing firm to develop the theme, layout, and placement of print advertisements in daily newspapers including:

Saskatoon StarPhoenix (2 insertions)
Regina Leader Post (2 insertions)
Vancouver Sun
Calgary Herald
Edmonton Journal
Winnipeg Free Press
National Post
Toronto Globe and Mail (2 insertions)

The City also produced and posted a special section on the River Landing website, produced and distributed a sales brochure, and distributed mailouts and emails to prospective developers.

Two submissions were received before the EOI deadline:

1) Lake Placid Investments Inc., and;
2) WAM Group GP Inc./Concorde Group Corporation

The administrative committee conducted an evaluation based on the evaluation criteria and the information requirements of the EOI. The evaluation has found that both scored sufficiently to proceed to the RFP stage. The review indicated that Lake Placid and WAM/Concorde Group have captured the vision, land-use mix, and scale outlined in the EOI and have demonstrated the appropriate financial capacity.

The administrative committee consisted of City Manager Phil Richards, Corporate Services General Manager Marlys Bilanski, Development Services Branch Manager Randy Grauer, Senior Planner Alan Wallace, Planning Branch Manager Lorne Sully, Land Branch Manager Rick Howse, and Special Projects Manager Chris Dekker. The City Solicitor’s Office served as consultants to the review.”
By this point however the process was likely beyond the point of no return since city council was set to make its decision that evening whether to approve the selection of Lake Placid Investments Inc. and WAM Group GP Inc./Concorde Group Corporation to proceed to the Request for Proposal stage for the development of River Landing Parcel “Y” – which it did.

It wasn’t until city council’s September 17, 2007, meeting when Lake Placid’s request for proposal was officially tabled that specific details of the development were revealed. Only then did it become apparent that the proposal appeared not to comply with the city’s development and zoning requirements.

Incredibly the city manager’s report (F1 – River Landing Parcel “Y” – Lake Placid Investments Inc. Proposal Evaluation) for that meeting made the following preposterous claim: “Based on a very preliminary review of the submission against the requirements of DCD1 and Architectural Controls, it would appear that there are no major issues that might prove problematic in this process.”

Perhaps some of the controversy surrounding the Lake Placid proposal could have been avoided had the EOI process been more open and transparent.

Dekker’s assertion that the developer’s proposal “meets all of the requirements set out in the original concept for south downtown” is a different and separate issue from the DCD1 and EOI.

It is interesting to note, however, that the South Downtown Concept Plan (June 2004) states that the DCD1 are one of “four main mechanisms for the control of development in the South Downtown” and recommends that “all four be utilized.”

“The guidelines contain objectives, acceptable land uses, and requirements for building form and massing,” the plan notes.

The integrity of the city’s EOI/RFP process has been compromised. The message Dekker and Lamb are sending is that the process is unfair and that it’s OK for developers to sidestep zoning and development requirements. It seems that the city and MVA are turning a blind eye or bending the rules just to get something built.

Comments made by Mayor Don Atchison last summer regarding criticisms of the Lake Placid proposal seem to illustrate where the city’s priority lies.

In Council bypasses riverfront roadblock (StarPhoenix, Sept. 18, 2007) Atchison said any company willing to spend $125 million -- the estimated cost of Lake Placid’s proposed development -- in Saskatoon deserves congratulations instead of criticism.

“I think it’s about time that we started moving forward . . . I think people are anxious to see something occur sooner rather than later,” Atchison said.

As usual it comes down to money. Throw enough of it around and problems seem to go away.

Since Atchison became mayor in Oct. 2003 the city has changed or bent the rules on a number of occasions to keep developers and the business community happy. These include the construction of the horrendous Galaxy Cinemas on Block 146, big box Wal-Mart’s at the Stonegate shopping centre and soon to be built outlet in the Blairmore Suburban Development Area, and Persephone Theatre. It appears that Parcel “Y” at River Landing will be joining that list.


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