From Planet S.
NEWS · APR 08 2010
Turbulent Waters
PLAN FOR RIVER LANDING SIGNATURE SITE REMAINS IN DOUBT
by Charles Hamilton
A bid to resurrect what has become one of the most controversial land developments in Saskatoon’s history gained momentum in late March, with the announcement that one of Saskatoon’s most respected citizens has signed onto the deal.
On March 22nd, Karim Nasser — a well-known local philanthropist who recently donated $12 million to the University of Saskatchewan — confirmed that his company, Victory Majors Investment Corp, has entered into a partnership with Lake Placid, the development company that hopes to construct a massive hotel-office-condo complex on the downtown riverfront.
Proposed for a prime spot on what many civic politicians insist is “some of most valuable commercial property in the country,” the massive Lake Placid development was to be a key portion of the River Landing Village — the scenic riverfront project that many hope will become a cornerstone of the revitalization of the city’s downtown.
However, since Lake Placid and the City came to an agreement almost three years ago, the project has been plagued with delays and political disputes — and, at times, controversy.
The original deal died last October, when Lake Placid was unable to come up with the funding needed to complete the estimated $250 million dollar project. In particular, they were unable to come up with the $4.5 million needed to secure title on the land.
Now, however, Lake Placid CEO Michael Lobsinger says that with the help of Dr. Nasser, that land title can be secured. He also says they could have the shovels hitting the ground as soon May, and complete the project in less than three years.
“With Dr. Nasser, [we] are in a position to close on the land immediately, and start excavation on the site within 45 days,” said Lobsinger after a March 22nd City Council meeting. “We’re going to move forward and we’re going to get this done.”
Sounds great — but the problem is that Council finally pulled the plug on the deal five months ago, after Lobsinger’s company repeatedly failed to meet payment deadlines. This puts Council in the awkward position of deciding whether or not to reopen negotiations with Lake Placid, or to open up the process to requests from other developers — which was, until recently, the plan.
Councillor Charlie Clark, who’s been sceptical of the Lake Placid deal since the beginning, was the lone dissenting voice on council at the March 22 meeting. He says reopening negotiations with Lake Placid send unclear and uncertain messages to other developers interested in doing business in Saskatoon.
“As much as I admire the tenacity of Lobsinger and I appreciate that Dr. Nasser is going to help with this deal, it is prudent for the City now, given what has happened, to move ahead with the RFP [Request For Proposals] process,” he says.
Neither Lobsinger nor Nasser would reveal the exact details of their agreement, but it is rumoured that Nasser would put up the necessary $4.5 million to secure the land. Still, even with Dr. Nasser’s involvement, it remains unclear whether or not the rest of Lake Placid’s financing issues will be solved.
Lobsinger says his money is tied up in a company called Seremia Ltd., which has a bank account in Nicosia, Cyprus. He also says that due to new and complex banking regulations arising from the global financial meltdown, he’s having a hard time getting that money back — but in November, he claimed that he was “one signature away” from securing the necessary financing.
Even with Nasser on board, it sounds like that signature is still crucial: when asked about it on March 22, he told reporters, “Nothing has happened. I’m one signature away.”
To further complicate matters, the City has commissioned two new separate land appraisals, which are likely come in higher than the original $4.5 million — meaning Nasser may have to put up more money than he bargained for.
All this has amounted to scepticism about the Lake Placid proposal in particular, and the entire situation in general.
“The process doesn’t seem to be transparent or in the best interest of the city long term,” says Sean Shaw, who regularly blogs about civic politics. “I don’t know the particulars, and no one really does — and I think that’s the problem.”
For city officials and politicians, there’s undeniably pressure to reopen negotiations with Lake Placid and complete the process quickly. The City is expected to spend $1 million in 2010 to run River Landing as-is, a cost that would surely be mitigated were they able to sell the anchor parcel immediately — and Lobsinger says that he can do it right away, whereas a new process with a new developer could take years to unfold.
Moreover, Lake Placid has also begun putting the pressure on — even though he says his company has already spent $8.4 million on preparations, Lobsinger has also stated that if the City were to reopen the RFP process, his company would back out entirely.
“If you ask me the question am I interested in another RFP [request for proposal], no I am not,” he says.
Regardless of what transpires, one thing seems clear: hopes for the site have been scaled down from the City’s original vision. If Lobsinger and Nasser are successful, for example, the site will include a Marriot Hotel — but one that doesn’t include a spa or major convention space, and which won’t be competing with other major downtown hotels, like the Delta Bessborough or the Sheraton Cavalier.
But if this is the most valuable commercial property in Canada, the obvious questions are why are we in such a hurry to sell it, and why would we accept a watered-down version of the City’s original dream?
Clark, for one, doesn’t believe it should be.
“It’s such an important site and it’s got so much potential, let’s really take the time to look at it,” he says. “In the end, we have to get it right.”
Shaw, who was narrowly defeated in the last civic election by incumbent Myles Heidt, says that even though he feels the Lake Placid project is “uninspiring, cold and not what the city originally wanted,” his main problem this time around is with the process.
“The city has a process for a reason,” he says. “If they keep making allowances for this one company, what does this say to the larger business community?”
Even those who are encouraged by Dr. Nasser’s involvement say they need to see all the facts before they can support the deal.
“Some people think [the Lake Placid plan] is great and some people may think it isn’t, but the point still remains that City Council, I believe, has a duty to the citizens of Saskatoon to make sure there is proper financing plan in place,” says Pat Lorje, councillor for Ward 2.
“The worst case scenario would be that we end up with a big hole in the ground and a stalled construction process on what some see as the most valuable commercial land in the province, if not the country.”
Councillor Darren Hill says he likes the original Lake Placid plan but agrees that both Nasser and Lobsinger are going to have to show a financially solid plan and partnership to council to get his vote.
“It impacts everything,” he says. “The citizens of Saskatoon are expecting a grand development there.”
It remains to be seen if they’ll get one.
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