The owners of an Edmonton housing project, stalled for more than a decade, are asking the city for $13 million to redevelop the area along a planned LRT corridor.
The owners of Strathearn Heights say the original agreement with the city is no longer financially feasible. The deal, brokered in 2007 and approved in 2008, had the developer pay to build a city-owned main street through the development between 87th and 90th Street, north of 95th Avenue.
Nearctic Property Group and Rockwell Investments are now asking the city to pay for the $11-million street construction, with another $2-million request to cover construction fees.
At an executive committee meeting Thursday, Coun. Ben Henderson said council should take the opportunity to catalyze the project.
“These guys are ready to go on something,” said Henderson, the councillor for the area. “It’s really clear that what’s on the table right now doesn’t work financially and no one’s going to build something at a loss.”
“Somehow or other we’re trying to find a creative way to make this project be able to move forward again, because it’s been 12 years and there’s a lot of people really eager to see some of this stuff that it brings to the table.”
Councillors voted to consider funding the project later this year when they update the capital construction budget.
“I think it shows a willingness to negotiate a win-win situation for both of us,” said David Kent, president of Nearctic.
No part of the site redeveloped since 2008 approval
Strathearn Heights is currently home to a strip mall and around 500 units of low-rise apartments dating back to the 1950s.
Nearctic and Rockwell Investments want to rebuild the area into 1,900 units of row housing and apartment buildings, adding two new parks and triple the amount of commercial space to the area just north of the future southeast leg of the Valley Line LRT.
The city routed the LRT line along 95th Avenue and made plans for a station across from the site in hopes of boosting ridership and stimulating development, according to a city report presented before the committee on Thursday.
But more than a decade after the project was approved, no part of the site has been redeveloped.
Owner says original deal ‘an inequity’
The owners say market conditions and the cost of public infrastructure, namely the road, have made redevelopment economically inviable, according to the report.
Kent, Nearctic president, says the terms of the original deal, from building the main street and transferring 15 per cent of the land to the city, amounted to an over contribution.
“We’re not under financial duress . . . What we are under is an inequity compared to where we were 12 years ago and what the city was asking for,” compared to other developments, Kent said.
In the report, city staff warned a decision to make a special agreement to support the developer would likely be viewed negatively by the wider development community and the public.
But Coun. Henderson says it can be hard for small-scale developers to finance a project of this size.
“I think we have to recognize that for these larger sites, and there may be other opportunities to make it work, and if we cannot make it work, it will only be the Riocans and the Morguards of the world that have deep enough pockets to be able to take on a project like this,” the councillor said, referring to two of Canada’s real estate investment giants.
“I’m not sure we want to limit ourselves to that.”