City's $3-million headache
Local development firm files for damages
Yellowknife ( May 12/00) - A decade-old fight to build an apartment complex has led to a $3-million lawsuit by a real estate developer against the City of Yellowknife.
Polar Developments Limited is claiming $3 million in special damages, plus other general damages, over a loss of opportunity to develop a piece of land.
The land at the centre of the suit is a 3-1/2 acre lot located on the corner of 52nd and 44th Street.
In an amended statement of claim filed by Polar Developments on Jan. 4, 2000, the company claims the city "deprived" them of using the land they held title to and alleges it "lost the opportunity of developing the lands as a residential or commercial complex whereby it has suffered damage."
Mayor Dave Lovell said he considers it "a nuisance suit."
"Three million dollars gets your eye. Why not five million?" said Lovell about Polar Developments' claim.
Originally owned by the City of Yellowknife, the land was transferred to the federal government in April 1978 in exchange for the property currently home to the Yellowknife Community Arena.
Polar Developments then purchased the property from the Government of Canada in November 1986 and were declared legal title owners in June 1987.
The company is claiming it was the city's responsibility to remove water and sewage pipes and a roadway located on the land so Polar Developments could construct an apartment complex.
The company claims those terms were stipulated in an exchange agreement the city signed with the federal government when they swapped properties back in 1978.
However, the city did not remove the infrastructure until seven years after Polar purchased it.
Polar Developments Ltd. claims that by the time the city did remove the sewage pipes, water pipes and roadway, the real estate market for such an apartment complex had diminished and therefore the company could not develop the land.
The company also claims the city refused, without proper reasoning, to pass a bylaw authorizing the rezoning of the land so Polar Developments could build the apartment complex.
The company's amended statement of claim maintains the city was not registered to have the infrastructure present on the land during the time it was owned by the Government of Canada or after Polar Developments Ltd. purchased it.
According to the city's legal statement of defence, all allegations are denied.
The legal document states "the Exchange Agreement (with the federal government), by its terms, either expressly, or alternatively by implication" granted the city a legal right to have infrastructure present on the land under the Land Titles Act.
In other words, the city claims that when title to the land was transferred from the Government of Canada to Polar Developments, the land was subject to the easements.
According to Lovell, when the city agreed to take out the water and sewer lines, it found an old lift station the city didn't even know existed.
He said the city spent "hundreds of thousands of dollars" to clean it up.
Ray Decorbe, owner of Polar Developments Inc., would not comment for the record on any issues pertaining to the lawsuit.
"We've been trying to do the mediator route. We've been putting alternatives forward forever," said Lovell.
"Court is a last resort," he added.
Lovell said the city has made offers to settle the matter, and he's "sure that Decorbe's made offers too."
"I'm certain (Decorbe) did," said Lovell.
The mayor said efforts to appoint a mediator will continue.
"If we can't get a mediator appointed then we'll go through the regular procedure, which would be an examination for discovery," he said