City considers buying library
Window of opportunity presented by refinancing of Centre Square

by Richard Gleeson
Northern News Services

NNSL (NOV 20/96) - The spectre of Centre Square is about to reappear at city hall.

The city is considering buying the space it now leases for the Yellowknife Public Library in Centre Square.

According to a staff memorandum released yesterday, a review of the options for financing a purchase of the public library will be presented at Monday's meeting of council.

In September, Centre Square Developments Ltd. approached council for permission to refinance the library property. Centre Square was paying interest of 11.25 per cent on its mortgage on the property.

The city allowed the refinancing, but asked staff to report on ways to cut the city's costs.

For the last eight and a half years, the city has been paying $37,730 a month to lease the 20,580 square feet of space the library uses in the downtown mall.

According to sources at city hall, administration has tagged the purchase price of the property at $3.7 million. If the city pays that price, the total tab for the library, including past rent, will be more than $7.5 million.

To buy the property the city will have to act before Centre Square Developments Ltd. firms up new financing. It will also have to hold a plebescite to get public authorization to take out a loan. The original agreement for the development of Centre Square gave the city the option of purchasing the library space last May for $2.6 million.

But that agreement fell through when the builder, Clark Bowler Construction, fell behind in payments to its major creditor. To avoid losing its interest in the library to Clark Bowler's creditors, the city agreed to give up its purchase option and other privileges it had under the original agreement.

The new deal, if it goes through, will go a long way toward laying to rest the long-standing debacle of the city's involvement in the Centre Square development.

A long way, but not all the way.

City is currently suing the law firm that wrote the original agreement on the library, claiming they failed to protect the city's right to buy the library.

In the action, the city is claiming the $650,000 it lost with the right to purchase the library. Including legal fees and other expenses, the city is seeking a total of $891,321.