Yellowknife (Nov 10/06) - After millions of dollars put into developing the Niven Lake subdivision, and numerous run-ins with upset residents in the area, the city is contemplating going back into the development game.

At a Monday committee meeting, city council members discussed becoming the main developer of Phase 7 of the Niven Lake subdivision.

"Personally, I'm a little nervous with the city being the main developer," said Coun. Dave McCann. "It should be a last resort."

The reason the city is thinking about becoming the developer for Phase 7 is based on responses received at a public meeting on Sept. 5, where approximately 50 people filled out a questionnaire.

According to the city, 77 per cent of respondents said that the city was the preferred developer of single-family zoned areas at Niven Lake. Councillor Bob Brooks said he believes the city will have to be developer of Phase 7.

"I don't think we have a choice, after the public meeting results," he said.

Brooks said to stick with private developers only because of the city's past failures in developing Niven Lake may not be in the best interest of the public.

"You tell me a city that hasn't had trouble when it comes to development," he asked.

The city's history in developing and managing development at Niven Lake is thick with trouble.

In 1998 and 1999, partners with the city raised concern about dismal sales - a problem which plagued the development in earlier phases developed after 1995. Finally, in 2000, the city bought out its partners, but had to borrow $3.1 million from the territorial government to do it.

Soon after, the city moved away from its role as developer and brought in restrictions for the city management of private development. Around the same time, the diamond mine boom revitalized the economy and lots began to sell quickly.

But problems continued to pop-up with other Niven Lake projects.

Last year, city council changed its zoning bylaw to allow the private developer for Phase 6 to set-up modular homes that a city development officer initially refused.

The idea for Niven Lake in 1995 was for higher-end stick built houses. But, because of a housing boom after 2000, and lack of space for building, the city allowed lower-cost homes to be built. This upset some of the early Niven Lake residents because of fears that their homes would drop in value.

In 2003, a Niven resident won a court decision to stop development of a cul-de-sac and repositioning of a park through Phase 6. The city was ordered by the NWT Supreme Court to pay the resident $7,000 for court costs.

New councillor, Kevin Kennedy, said he is neither 100 per cent for or against the city becoming the developer for Phase 7.

"I'm in favour of whatever is the best option for the people in Yellowknife," he said.

"I don't think the land should be passed over to someone to make huge profits from Yellowknifers.

"I think the city should always consider developing its own land if it's best for people in Yellowknife."

David Wind, also new to council, said he hasn't made up his mind if the city should get into development again.

"There is a need in the city for affordable housing," he said. "And there seems to be the opinion out there that the private sector is driving housing prices up. But on the other hand, the city has been involved in past developments that haven't gone particularly well."