Project misses deadline
Lake Placid requests extension to pursue funds for development
By David Hutton, The StarPhoenix August 18, 2009
Lake Placid Developments missed a city-imposed deadline Monday to pay $4.5 million outstanding to purchase the land for its $200-million-plus River Landing megaproject.
A special meeting of city council will take place Wednesday at 11 a.m, with a presentation expected from Lake Placid CEO Michael Lobsinger, to consider whether to grant the company another extension for the hotel, condo, retail and office project, city manager Murray Totland told council Monday.
Lobsinger sent a letter to city council requesting an extension to Oct. 31. He repeated his commitment to the project and said he is having difficulty getting access to the financing needed for the project, Totland said.
Addressing a $6.3-million River Landing cost overrun that administration asked city council to approve, Totland said many of the land values at River Landing rely on the delayed Lake Placid project going forward. The city is banking on the increased land values of private lots to cover the cost overrun once the land is sold.
Mayor Don Atchison said in an interview that similar extensions have been granted to the Prairie Ecovillage sustainable housing project at River Landing last year and to the Station 20 project at Monday's council meeting.
Given the global credit crisis, an extension is warranted while the company searches for financing, Atchison said.
The company is paying interest on the $4.55 million still owing for the city-owned site, which was due in January. Lake Placid still has not paid the City of Saskatoon the interest owing, thought to be in the neighbourhood of $250,000, Atchison said.
"They're having difficulty. Why wouldn't we give them an extension to get their funds together?" Councillors are split on whether another extension is warranted, with some arguing it's now time for the city to move on and find another developer for the site by purchasing back the 2.43-acre parcel of land east of Second Avenue.
Meanwhile, city council approved the $6.3-million budget increase to cover overruns for River Landing's Phase 2.
The approved River Landing budget increase, which brings the total budget for both phases of River Landing to around $68 million, relies on the cost overruns being recovered through area land values estimated at $15 million.
Coun. Tiffany Paulsen raised concerns about relying on future land sales to fund the project, particularly given the unknown status of Lake Placid's project.
The funding increase includes $2.3 million for landscaping around the existing lift station and a small boat dock that now won't get underway until 2011. Some councillors argued for the immediate approval of $4 million of the overrun, with the $2.3 million remainder to be allocated when that work is done.
"The funding formula is based on maybe, probably, maybe fictional (estimates)," she said. "We don't know what is going to happen." Paulsen said the cost overruns may eventually increase taxes if the land sales don't net what the city is expecting.
"You spend the money as you earn it," she said.
Coun. Myles Heidt said the cost overruns are justified given the magnitude and impact on the River Landing development.
"When we're done there, it will be the most sought-after land in the city," he said. "Yeah, we'll have some cost overruns, but we'll make it back." Atchison said it would be a mistake not to approve the budget increase.
"I say, stay the course, stay the course, because if you don't stay the course you won't finish the project because some other project will be of a higher necessity," he said.
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Station 20 receives extension
By David Hutton, The StarPhoenix August 18, 2009
The group behind the Station 20 West development was granted a one-year extension by city council Monday to break ground on 20th Street West, saving the grassroots inner-city health initiative and grocery store from potentially losing its site.
"We recognize as a city the importance of the project as a linchpin . . . in making Saskatoon a resilient city," said Coun. Charlie Clark.
The $5-million Station 20 West building is on hold while organizers work to raise another $1.25 million to begin building the facility. City council unanimously approved an administration report requiring the Station 20 group to provide a "a complete and verifiable capital plan" before a building permit will be issued.
Pin-wearing Station 20 supporters from across the city packed council chambers Monday night to show their support for the core area health project.
The city sold the land to the centre's board for $1 with the understanding if construction did not start within a set time, the city would buy back the land. The group now has until Sept. 3, 2010, to get a building permit. The City of Saskatoon has until Feb. 27, 2011, to buy back the land if construction hasn't begun.
Around $1.2-million has been raised through public donations from more than 60 organizations, said Len Usiskin, manager of Quint Development Corp. and a Station 20 West board member.
"We plan to have all the capital required from the project before next spring," Usiskin said.
The centre has been redesigned after funding was pulled from the province and is now expected to cost about $5 million.
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