The following is posted on SP reporter David Hutton's city hall notebook. It pertains to Parcel "Y" and the city's looming betrayal of its August 19 resolution. If Lake Placid missed the October 30 deadline the agreement would be terminated without further resolution by council. In the mayor's words, "no more chances." In a recorded vote seven councillors, including the mayor, voted in favour of the resolution. Now they're prepared to ignore it.
http://communities.canada.com/saskatoons...-achs-letter-to-council-on-parcel-y.aspx
There was a number of letters from people both for and against the Lake Placid project.
Here's local developer Ken Achs, president of Midwest Development, with his take:
"I was very surprised and dismayed to hear that the City is now reconsidering going back on its word about a drop-dead date for the proposed hotel/condo/office project on the riverbank. I suggest that the City consider the negative effects of prolonging the proposed riverfront project:
1. It distorts the legitimate upscale condo market by continuing to create unrealistic expectations. Buyers attempt to compare what is built to the grandiose development the City tells them will be built. It is hard for legitimate projects to compare with that and is more than a bit discouraging for those who stepped up and did what they said they would do. No one minds legitimate competition as it is good for the City, but this is like competing with a ghost.
2. In order to finance such a massive project, any reasonable financial institution will require between 25 per cent and 40 per cent equity for a project like this. This means that any developer must have cash equity, not financing. Where is the equity? Ask any financier how this project can come together without equity from the developer. It just isn’t possible.
I bring this up to make you aware of how hard it is to finance such a project. A worse situation would be if this project starts and then stumbles and is left sitting.
Understand that I have no interest in this land. This letter is just my observation based on my knowledge of the real estate development business. I have no underlying motive but for the wellbeing of Saskatoon and its credibility. The City afforded this project every conceivable chance to go ahead and bent every rule to make it happen. You extended the time for payment and then excused missed interest payment deadlines. Finally, you emphatically set a drop-dead date. Now, it appears you may go back on what you said.
We all know that projects always seem to go over budget. Just look at the riverfront development. What will happen if this condo/hotel/office development is over budget and partly built?
The City needs to get more realistic expectations if it wants to encourage real development. I did enquire about the City’s land by the Farmer’s Market. I was shocked to hear the possible asking prices. At those prices, this west side land will have the same fate as the south downtown land and sit undeveloped for years.
As a Council, you should consider “the benefit” of having 100 per cent of nothing, or alternately, doing something to make all of this land attractive enough to have some construction start in 2010. I am not asking you to break rules for local developers, rather just to be realistic when pricing your land. Some developers just might jump up and actually build something most people will be pretty happy with.
Your truly,
Ken Achs
President
Mid-West Development (2000) Corp.
Here's Mayor Don Atchison's news release:
For Release: October 30, 2009
CM09-368
The City of Saskatoon did not receive payment from Lake Placid Developments for the purchase price of Parcel Y.
At the August 19, 2009 Council meeting, City Council passed a resolution indicating that if full balances owing were not received by 5:00 p.m. on October 30, 2009, then both the Parcel Y and the adjacent lane agreement would be terminated without further resolution of Council.
The balance of the purchase price for Parcel Y (River Landing Village) was $4,562,503.84 plus $480,965.65 for the lane adjacent to Parcel Y. Lake Placid forfeits its two deposits totaling $250,000 and the interest payment of $193,770.48 it made in August.
The City of Saskatoon retains ownership of the property.
-30-
Media, for more information:
Mayor Donald Atchison
975-3202