Work on downtown grocery delayed after spat between city, developer over Rosewood project

Saskatoon’s city council voted Monday to reject a request made by Arbutus Properties to remove restrictions that the company feels impede its ability to continue developing a parcel of land in the Rosewood area.

That decision, the company’s president said, may have an impact on another of its projects — a central downtown grocery store.

“We really apologize for the delay and we don’t think the residents of Saskatoon should be responsible for council’s decision-making. We feel badly for having to delay it because we know it’s a big deal in downtown Saskatoon to have a grocery store,” said Jeffrey Drexel, the president of Arbutus and Pitchfork Market + Kitchen.

The vote on Arbutus’ proposal for the Rosewood project was 8-1. Drexel called the situation “really frustrating.”

“In all my years of dealing with the city, it has got progressively worse over the past four (to) six years, but this just is the cherry on the top,” he said.

Drexel feels the city is refusing to meet him halfway on a compromise that would allow Arbutus to continue developing a 244-unit affordable housing project in the Rosewood neighbourhood.

Darryl Dawson, manager of the development review section with the City of Saskatoon, outlined the concerns the city has with Arbutus’ request at a city council hearing Monday. He said Arbutus is required to resolve the conditions of a holding symbol before that can be removed to allow for development to continue.

In this case, that involves finishing building a lift station and force main as part of the wastewater system required for the development and about $1.3 million in levies Arbutus still owes on the property.

As per the agreement, the developer is required to cover 100 per cent of the cost of the lift station. Dawson explained the servicing agreement sets out a schedule of payments, split into two parts in the case of this project with Arbutus. The second part of those payments is what is still owed by the company.

“While Arbutus has noted they have completed the terms of the servicing agreement, administration’s position is that as per the agreement, the required letter of credit and agreement needed to follow the city’s design, construction and commission review plan are still outstanding,” Dawson told council.

Approval for the construction of the lift station and force main will be considered, Dawson stated, when all conditions of the servicing agreement with Arbutus have been satisfied. Dawson called it a “basic and foundational concept in our official community plan and committee process.”

Approval of Arbutus’ work is subject to the conditions of the servicing agreement and subsequent approvals for constructions. Dawson said discussions are continuing with city administration to ensure the project will meet the city’s construction and design standards.

“It is our opinion that the application to remove the holding symbol is premature,” Dawson said.

Dawson said the city has not allowed for development to proceed when the terms of a servicing agreement are still outstanding in all the time he has worked for the city.

“City has a long-standing practice of requiring lots to be fully serviced before individual site development can proceed,” he shared.

“We would need to have the drawings approved, the work completed, the levies paid, and then we could recommend approval of the removal of the holding symbol.”

Drexel addressed council’s concerns in an interview with 650 CKOM.

“We think it’s a redundant system because we actually think there’s capacity as of now to allow this project to proceed,” he said.

Drexel said the company’s engineers have been monitoring flow and capacity to determine what would work best for the property. Dawson noted that at council on Monday. The city, however, is requiring that Arbutus abide by its modelling statistics.

“I would retort by saying, ‘Well, if the actual flow was actually higher than your models, would you still use your modelling to determine whether or not you proceed with the project?’ ” Drexel said.

The developer, who has worked on a number of projects in the past in Saskatoon, said the models put forward by the city are usually conservative and their current findings aren’t aligning with what the city’s models projected.

“The reality is there’s more capacity and that’s only an interim solution,” Drexel said.

He noted that Arbutus has already spent $5.5 million of the $7 million on the lift station the city is requiring the company to build. That’s expected to take about three months, in contrast with the two years allotted for the development of the affordable housing units.

“We’ll be finished long before,” Drexel said with a laugh.

Ward 2 Coun. Hilary Gough said her decision to vote against allowances for Arbutus come down to the importance of the order of operations the city has in place.

“It ensures servicing gets done before development,” she said.

Not following that order can introduce serious risks for the city — and residents as a result — as well as the developer and future users of the land. It’s something Gough said should be taken seriously.

Gough referenced several times in the past that city administration has worked alongside Arbutus to problem-solve on other projects. She’s not prepared to contemplate a different set of rules or order of operations, nor to put stakeholders at risk.

Drexel feels the city is throwing additional requirements at Arbutus — “Red tape after red tape,” he said — before the company can begin to build.

The company’s actual request to council was asking for approval of a foundation permit while the developer proceeds with building the lift station. This would mean it could begin work on building a garage for the property. However, the city denied that request.

The delays to the project are hurting the funds Arbutus has for the project.

“We don’t have an endless supply of money … These things hurt us,” Drexel said.

That in turn could delay the work on the central downtown grocery store. Gough said that was disappointing news and hopes the store will proceed and find success.

“I’ll be standing at the ready to help facilitate that store or future stores to make sure that the services that residents are looking for in the city centre … find their way into our community,” Gough said.

The question of the grocery store’s well-being was not what was before council on Monday, Gough pointed out.

“I don’t think it’s appropriate to be engaging in the business decisions of a developer and the sequencing of what they’re able to make happen within the regulations that we have for development in the city,” she said.

Since this current debacle — the latest, Drexel said, of several roadblocks he’s encountered with the city — the developer isn’t looking to continue with further projects in Saskatoon.

“I see us finishing that out and moving on to other opportunities in other cities,” Drexel said.