Jeff Colbourne
Northern News Services

NNSL (Jul 29/98) - A Yellowknife property with a history of financial difficulty will be sold this week.

Centre Square Developments is selling its office tower and shopping mall to Winnipeg-based real estate company, Consolidated Properties Limited. The company has brought up retail and commercial property across the country.

"It's taken some time. We actually received the offer last year said Doug Cannam, vice-president of finance with Clark Builders, current property owner. "We're just now in the process of closing it."

Clark Builders said the sale of the mall and office tower will be good for the city and the complex. Consolidated Properties has experience in running these types of large commercial and retail properties in the south.

"For Yellowknife I think you've got good owners coming in. They're substantially larger than we are," said Cannam.

Clark Builders is retaining a couple of the units in the office tower from the deal.

How much the total deal is worth, Cannam would not say but he did note that Centre Square Developments' financial situation has turned around since falling into difficulties in 1995.

In March of that year city documents revealed Centre Square Developments Ltd. would be petitioned into bankruptcy if the city and other partners did not help it restructure. The company was in serious arrears on a debt to an Ontario teachers' fund, which provided $19 million for the $45-million project.

The city's finance committee reluctantly ended up signing new lease agreements for the library and parkade to cut the property's losses.

By renegotiating "tenant friendly" leases, the city ended up paying between $650,000 and $825,000 to bail out the Centre Square and to take ownership of the space occupied by the library and parkade in 15 years.

Before the final deal was signed off on Centre Square, the city had to amend the Condominium Declaration. Currently the city has 37.5 per cent of the vote under the condominium declaration. Consolidated Properties Ltd. requested the city vote be reduced to 23.88 per cent of the vote based on the city's holding 23.88 per cent of common elements.

The city's financial, legislative and administrative committee recommended making the amendment.

The committee also felt that the sale of Centre Square to Consolidated Properties Ltd. would be a good idea. It has the financial ability and strength to survive a downturn in the local economy or to expand the project if conditions warrant -- and the expertise to manage the complex.