Richard Gleeson
Northern News Services

NNSL (Jun 10/98) - The city may soon have to cough up between $3 million and $4 million to pay out its partners in the Niven Lake subdivision.

Though the bosses of the three private firms involved in the agreement were out of town and unavailable for comment, Mayor Dave Lovell said this week they have asked for concessions on the agreement for the $25 million-subdivision.

Lovell said the engineering firms of Reid-Crowther and MM Dillon and construction firm Volker-Stevin are dissatisfied with sales performance.

Under the agreement, the companies get paid for off-site improvements such as lift stations and water lines through lot sales.

"They want a change in the pricing so the city picks up (the cost of off-site improvements)," said Lovell.

"What that would mean, basically, is the city would be paying them for all the off-site work up front."

The Niven Lake agreement, signed in 1995, gives the city's partners the right to pull out of the deal if, after two years, all lots in the last completed phase remain unsold.

According to the agreement: "The city agrees to reimburse the contractor-developer and the engineer for their interest in the sale proceeds of the remaining lots on the basis of the agreed attributed sale price for each lot."

Five lots were sold when the city first offered Niven Lake properties for sale in September 1995. In the almost three years since then, only one more lot has sold.

Lovell said there is a possibility the partners will exercise their escape option if the city doesn't agree to a new arrangement.

There are 27 lots in the first phase of the 350-lot development.

When first discussed at council, the Niven Lake partnership was promoted as an innovative way of "sharing the risks and rewards" of development.

The fully-serviced lots in the development were to be "reasonably priced." The average price of the lots now for sale is $77,000.

Lovell said there has been discussion of reducing lot prices to appraised value, a drop of about 10 per cent.

In an attempt to spur sales, the city has offered special financing arrangements and arranged a draw for a $4,000 coupon toward the purchase of a Niven Lake property.