Developer seeks council concession
Riverside developer wants in the ground before full levies paid
By: Peter Boer
| Posted: Saturday, Jul 07, 2012 06:00 am
Another developer has approached council looking for permission to begin some construction work before all securities are paid.
Greg Hembroff with Reid Worldwide, developers of the Riverside subdivision (formerly named Timberlea) approached city council Monday night because of a problem with the required development agreement with the city.
The issue mirrors a situation the city and Landrex faced last month. Under the terms of the current offsite levies bylaw, all levies and securities are to be paid up front before the city signs off on a development agreement. Yet in the case of Landrex, and now Reid Worldwide, a signed development agreement is required by the financial institution funding the project before it will release the money for the levies and securities.
According to Hembroff, administration and Reid Worldwide were close to an agreement on June 29 when they discovered council would have to authorize it.
“We would like council to direct the city manager to sign a supplemental development agreement. It would allow us to get in the ground and get construction moving,” Hembroff said.
Last month Landrex faced a similar problem in which it was ready to begin construction but required council authorization to begin utilities and grading work before all its securities were in place. At that time council granted city manager Patrick Draper authorization to conclude a supplemental agreement with Landrex, which was successfully negotiated.
This time, however, council passed a larger motion so that developers don’t need to come make their cases every time a similar situation occurs. Until Oct. 31, at which time the city hopes the offsite levies bylaw review will be concluded, the city manager has authorization to execute any supplemental agreements with developers facing the same catch-22.
Todd Wyman, director of the growth initiative team, speculated it’s getting increasingly difficult for developers to get financing due to increased scrutiny from lenders, hence their request for copies of development agreement signed by municipalities.
“With a supplemental agreement we’re able to limit the scope of the work to take place, require payment of the securities and utilize that security payment. We can draw on that to pay the offsite levies if we have to,” Wyman said.
Mayor Nolan Crouse said he didn’t have a problem with passing the motion Monday because it poses no risk to the city.
“This is not something that’s going to put the city at risk simply because it’s not the city’s land,” Crouse said. “But we have to put some policy in place.”
Similar problems might be rectified once the review of the offsite levy bylaw is completed, which is expected sometime in the fall. Crouse said he wants to see something entrenched in policy that will prevent similar situations from occurring.
“Are there other policies we need to consider and should we anticipate any policy change? That’s what I expect to hear back from our staff.”