Friday, July 03, 2009

River Landing Village: Delays and excuses continue as Lake Placid Developments (Saskatchewan) Inc. granted one-year extension



It was on September 4, 2007, that the city announced it had received a request for proposal submission from Lake Placid Investments Inc. for Parcel “Y” at River Landing. The $200-million plus hotel, condo, retail and office project was approved by city council at its meeting on September 17, 2007. Twenty-two months later and the developer still haven’t broken ground.

On January 19, 2009, Lake Placid missed a deadline to purchase the site. According to The StarPhoenix the company had until then to pay the $4.55 million outstanding for the city-owned site. Lake Placid made two down payments totalling $250,000 late last year.

The sale agreement between the city and Lake Placid allows for the developer to delay the purchase as long as it pays interest, which the company has agreed to do.

Richard Lobsinger, vice-president of sales for Lake Placid, said at the time that the delay was due to over-consolidating five separate land titles for the property. Once the company has the consolidated title, it can close its purchase of the land, he said.

Chris Dekker, then the city’s manager of special projects, said in the article that the developer has an excavation permit but isn’t allowed to do any work until it completes the site purchase. Financing was not yet officially in place.

The city’s manager of building standards, Bob Baran, has estimated digging up the site will take four to six months. But Lobsinger said work would start in spring and be complete by the deadline. [Lake Placid misses purchase deadline (StarPhoenix, Jan. 20, 2009)]

Lake Placid
had until June 30, 2009, to complete the excavation but missed that deadline, too.

In a letter dated June 15, 2009, to city manager Murray Totland, the solicitors for Lake Placid Developments (Saskatchewan) Inc. requested an extension of the time limit for completion of the excavation required for the development.

“Due to the various delays encountered to date, including the required amendments to the appropriate provincial legislation which was needed to facilitate the project, the commencement of construction has been delayed from that contemplated in the initial plans of our client and it is impossible to meet the specified deadline. Accordingly, we would request an extension of this deadline from the specified date to June 30, 2010 for completion of excavation. That time frame will provide our client with sufficient time to commence the work shortly and complete the work through the winter season. This should provide a sufficient buffer to deal with the usual weather related delays,” said William J. Shaw, a partner with McDougall Gauley LLP in Saskatoon.

In a report to city council on June 22, 2009, Totland recommended “that the time limit for completion of the Construction Requirement in the Sale Agreement for Parcel “Y”, River Landing Phase I, be extended to June 30, 2010 provided that payment in full for Parcel “Y “is received no later than 5:00 p.m., Monday, August 17, 2009.”

Totland noted that Lake Placid “has agreed” to the purchase deadline. He said the legislative amendments in question are changes to The Condominium Property Act and The Land Titles Act, 2000 which were required to allow multiple condominium corporations on the site.

“As of the date of this report, payment of the balance due under the Sale Agreement for Parcel “Y” has not been received. Interest is accruing on the balance pursuant to the provisions of the Agreement,” he said.

Mayor Don Atchison told The StarPhoenix in March that the developer has assured city administration it has financing in place for the project and is awaiting the change in legislation. [Construction delay (StarPhoenix, March 12, 2009)]

Neither Lake Placid’s letter nor Totland’s report mentions the status of the financing or gives a date when construction might start. The city manager didn’t say what will happen if the August deadline is missed.

Lake Placid said work will commence “shortly” and the city says excavation can take as little as four months to complete so it’s puzzling why the developer requested another year to get it done. Even if digging started August 1 it should finish by November or December. The story doesn’t seem to make sense.

Then again just because a developer purchases land doesn’t mean something will get built. The previous developer that owned the site, Remai Ventures Inc., pulled the plug on its plans in February 2007 due to high costs and the shortage of skilled labour. The City eventually purchased back the land.

The two pieces of legislation Lake Placid was waiting on were passed by the provincial government a few months ago.

Crown Corporations Minister Ken Cheveldayoff introduced The Land Titles Amendment Act in the legislature on November 13, 2008. The bill was passed April 1, 2009.

The Condominium Property Amendment Act, 2009 was introduced on April 28, 2009, by Justice Minister Don Morgan and was passed on April 29, 2009. Both bills received royal assent on May 14, 2009.

The following week Lake Placid sent out invitations for a groundbreaking ceremony to be held at the site on May 26 at 11:30 a.m. It was cancelled a few days later.

On May 22, a Saskatoon resident with the username ‘Jerry’ posted a message at an online community called SkyscraperPage Forum with information that apparently came from Lake Placid explaining why the ceremony was called off:

“We have decided to postpone the ground breaking ceremony for a short period of time. Given the scale of this event, we were unable to coordinate the various schedules of dignitaries that we believe are critical to this project. Lake Placid believes that it is important that all of those people that have assisted in the approval in this project, allowing it to become a reality, should be in attendance and that we should celebrate in this achievement together. We thank you for your patience and look forward to rescheduling this event in the coming weeks.”

As excuses go this one seems bizarre. Why on earth would the developer send out invitations if it didn’t have everything organized?

The list of dignitaries should be a short one. Only two governing bodies were involved in approving the project – city council and the Meewasin Valley Authority. At most only Mayor Don Atchison and the Meewasin board chair should be present at any ground breaking ceremony. This is likely too much to ask though. You can bet there will be a long line of people looking to shamelessly weasel their way into this photo-op. The list includes federal Conservative MPs, Saskatchewan Party MLAs, and so-called local business leaders.

Lake Placid said the postponement would be for a “short period of time.” That was five weeks ago. What’s the hold-up now? It can’t possibly still be the scheduling of dignitaries.

The article Developer seeks extension on deal to begin River Landing complex (StarPhoenix, June 20, 2009) might hold an answer. In it, city manager Murray Totland noted that the world credit markets have changed substantially over the last six months.

“There are financing difficulties that weren’t anticipated. . . . I can’t imagine how difficult it is to get financing right now.”

Speaking broadly about the effect of the economic crisis and tightening credit market, Totland said lenders are being “very, very careful in what they get into.”

Perhaps Lake Placid’s financing collapsed. If that’s the case the developer doesn’t seem to be talking. The StarPhoenix said the company couldn’t be reached for comment when contacted on June 19.



1 Comments:

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