The empty lot at 44 Street and 52 Avenue is like a thorn in the city administration's side. The company that owns the three-acre parcel accuses the city of blocking development and the issue is probably headed to court.
Jorge Barrera
Northern News Services
Yellowknife (Apr 13/01) - A long-term dispute between the city and Yellowknife developer Ray Decorby appears headed to court for resolution.
"I'm surprised the city hasn't taken the olive branch early on without expensive litigation," Robert Curtis, a lawyer for the owner of Polar Developments, said this week.
The city has already lost as much as $1 million in taxes that would have been paid if the Decorby land had been developed and could lose much more if a court ruling goes against it.
According to an independent legal opinion obtained by Yellowknifer, Decorby's lawsuit could go either way.
Curtis said the city is "stonewalling" his efforts to negotiate a settlement of a $3-million lawsuit prompted by its refusal to permit development of a three-acre parcel beside Sir John Franklin School.
The city answered Decorby's lawsuit with a statement of defence but its lawyer has not returned phone calls from Curtis or Yellowknifer.
"It's uncommon for a municipal corporation to do this," Curtis said.
Dispute goes back
Polar Developments filed the lawsuit a year ago, but the dispute began in 1989. It stems from the city's refusal to give Polar the same deal on the property it promised to the federal government.
In 1978 the city traded the lot to the Department of Fisheries and Oceans. It promised to relocate 44th Street and a sewer and water main that cut through the land once the department submitted a development proposal.
The department never developed the property. In 1987 Polar Developments bought it and the next year asked the city to rezone the land for an apartment complex. The necessary rezoning bylaw carried a rider that required city administrators to deal with the road and service lines. The bylaw failed to pass third reading.
A May 1, 1989 memo to the city's development committee said Polar Developments had not submitted "information necessary to the resolution of this matter."
The committee recommended that council allow the rezoning once both parties agreed on what to do about the road and sewer.
At the time, Decorby said he felt the decision was "unfair," but it may have been a blessing.
Work started that year on the Centre Square complex and Bellanca Developments' NorthwesTel Tower. Both projects opened in the midst of a recession and suffered from prolonged high vacancy.
The city finally removed the road and service lines in 1993 but by that time market conditions no longer favoured the development.
"The land has been neutralized for some time now," Decorby said.
Decorby pays $8,000 a year in taxes on the vacant lot. He pays about $130,000 year on the Anderson Thompson Building and would likely have paid a similar amount in taxes if the property in question had been developed.
A complex issue
Coun. Dave McCann, chair of council's legal services committee, said he'd like to see the matter settled out of court but added that "it had a life of its own."
According to McCann the issue has evolved into a complex legal problem which is causing council considerable pain.
"It's a never-ending visit to the dentist," he said.
"If I could relive that instance, I wish they would have tried to solve it when it was within range."
Polar Developments' legal argument is two-fold: the city did not have a legal right to keep the road and sewer lines on the land. The city acted in bad faith by using its power to stall developments as a hammer in negotiations.
Whether the city acted in bad faith depends on Polar Developments' ability to produce enough evidence to prove the city abused its legislative power.
Win or lose, McCann said Yellowknife failed up to live to the "Northern ethic."
"We're fairly remote here; we have to work together," he said.
The next step in the lawsuit is examination for discovery. But when this will happen is anyone's guess.
"It's more expensive to drag things out on both sides," said Curtis.
