Landrex Developers Inc. has launched a lawsuit against the City of St. Albert over offsite levies for the firm's Erin Ridge North project.
The company's statement of claim, which was provided to the Gazette by the city, outlines the company's demand for a refund of levies it has already paid, an order making it clear the city cannot collect levies for an upcoming phase and $20 million in damages.
The suit filed on Friday suggests the city was stepping outside of its authority when it imposed offsite levies on Landrex for its developments in Erin Ridge North.
The company has already signed development agreements for the first two stages of its development and has paid approximately $500,000.
The city's offsite levy bylaw sets up the fees developers have to pay to offset the cost of providing them services through water and sewer lines.
In their lawsuit, Landrex argues their development, once called Hunter Ridge, is serviced through the existing Erin Ridge and Oakmont developments and they don't benefit from new services in the annexed land.
"Landrex Hunter Ridge Inc. will receive no benefit from the sanitary and storm water infrastructure to be constructed within the annexation area," the statement of claim reads.
The company also wants the court to find $7.7 million in proposed levies for the third stage of the company's project are not legally enforceable.
The company suggests the dispute over these levies is costing them money and risking a potential deal with a commercial developer for the project.
"The proposed buyer is unable to complete its due diligence and financial analysis and the parties are unable to conclude a definitive sale agreement," the lawsuit says.
Second application
In light of the pressing land sale, the company is asking for a swifter response than the lawsuit is likely to lead to, as civil lawsuits can often take years to resolve.
The court has asked for a judge's order that would allow it to go ahead with its development without giving over the proposed $7.7 million in fees.
The company proposes, as an alternative, the court holds the $7.7 million in trust through a letter of credit. Landrex would be allowed to draw down the money to pay for roadway improvements as the lawsuit works it way through the court.
City manager Bill Holtby said the city is considering its options. He said administration would be recommending a course of action to council in early September. Council was set to debate the offsite levy issue at last night's meeting, but postponed that discussion in light of the suit.
The second application is set for a proposed court hearing on Friday morning, and Holtby said the city would respond to that application.
"Our legal counsel will be appearing on Friday to speak to the application," he said.
Holtby had no comment on the substance of Landrex's allegations.
The allegations in Landrex's statement of claim have not been proven in court.
