Outside city chambers
Councillors voice opinions on Niven Lake deal
Yellowknife ( May 17/00) - The City of Yellowknife is now seeking ministerial approval to borrow $3.1 million to buy out its Niven Lake partners.
The decision was unanimously approved during the May 8 city council meeting. At that time council also agreed to request the minister waive ratepayer approval for the loan.
The lack of council debate has left some ratepayers wondering what this buyout would mean for the citizens of Yellowknife.
As a result, Yellowknifer polled all city councillors, asking: "Do you think Niven Lake is a good deal for the city?"
I think that we're stuck with it because there was a contract signed.
In retrospect, I think better planning could have been done in terms of determining what the future would be. It's difficult because you're trying to predict the future and that really is the problem for the city when it gets into development.
Maybe a preferred path might have been to try to gauge the interest of the private sector into development. When I mentioned that in house a lot of people said `the private sector couldn't do it,' but I doubt that. I think if it was set up properly the private sector could handle much of that business.
My solution for the future would really involve orchestrating private sector competition for land development. That would mean the city has to set the context in which private sector developers would be invited to develop land and take the risks in marketing that, rather than the city taking the risk.
It was not a shared risk arrangement, there's no question about that. When partners have guarantees to leave the arrangement with much of their investment that's not a shared risk.
Yes I do believe it's a good deal for the city.
The city is limited in where it can expand at the present time and that goes back to a territorial decision back around 1985 when the Niven Lake area was one of three areas that the city had an opportunity to develop.
In the last two weeks we've sold at least three or four lots there and I think this indicates that there is an interest in Yellowknife again, that the real estate conditions are changing and we are going to have expansion.
Yes, this particular development is something that would have been created by the city at some point.
We entered this three-partnered project and there were clauses put in place to ensure that the city was also protected in this deal.
Ultimately, if the lots start selling faster, which they have since last week, it will be a great deal for the city.
I think it's a deal that we have to make following up on a commitment that was made by a previous council five years ago. We're legally obligated to follow through on that.
I'm in favour of it, but it's probably something I wouldn't have gotten into had I been on council at the time.
The original agreement certainly was not, in my mind, an agreement where the risk was equitably shared. But, there are provisions in there for the city to get out of it so I think we should be thankful for that.
The process of closure the other parties have initiated is not something the city has much control over, it has to reimburse the other parties unless we want to go to court over it and I don't think anybody wants to do that.
We do have to be very careful in terms of planning the rest of the subdivision so we don't end up getting too far ahead of demand, which has happened in the past. Municipalities tend to over-exaggerate the level of development and population growth and I think this is another example of that. I think we just have to be far more realistic about how we plan for population growth in the future.
From a business perspective, it was a good deal based on the information the city had at the time.
At this point in time, it's also a good decision to buy out the partners because if we don't we still have to share the profits and put the cost of Niven Lake onto the general tax base.
Although this is a bad time for development because we haven't had the growth in the last five years that was hoped for, we don't have a choice in the matter right now.
If we don't buy out the partners then we don't get a share in any profits of the sales and we'll have to pay them for the common costs anyway.
It's not very much of a yes or no question and it's not so much whether it's a good deal or not. There's not really a whole lot of choice in the matter right now.
I'd like the city to take a closer look at future land development, what different options are available to us, and a proper look at what the best options are for the future.
We've done it a bunch of different ways in the past and there's been advantages and disadvantages each way. This is a new way that was tried, it was thought it would have some advantages and it got messed up by the timing.
Given the situation we're in now, we don't have a whole lot of choice other than to do what we're doing. So in that sense, it is a good deal because if we don't follow the terms of the contract with the partners I suppose we could get sued. If we had known this was going to happen back in '95 would we have gotten into things the same way? I don't know. I would like to see us have a better understanding of the different options available to us before the next development.
The city should do an evaluation of different options so maybe the next time we will be better-prepared and avoid some problems.
I think the deal originally negotiated provided the private partners an opportunity to get out. If they didn't get out the city would have to edge out more money. If we had to do that, then we're better off to do it on behalf of the taxpayer rather than the private partners.
I think that Yellowknife has turned around and I think that development is going to sell very soon. I don't have any concern at all about meeting our obligations of making land available for people who want to build houses.