The City of Moncton has agreed to pay $12.5 million for the Highfield Square property downtown.

As part of the agreement, current owner Warren Gate Investment Inc. will pay the cost of cleaning up asbestos in the building and any chemicals or hazardous material is the soil. Cleanup costs are estimated at $4.5 million by the current owner.

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Moncton will pay $12.5 million for the Highfield Square property with the intent of building a $105 million sports and convention centre on the site. (CBC)

Last year, Moncton struck a deal with Warren Gate Investment Inc. to buy the property for $6 million. However, that deal fell through when the company's bank refused to sign off on the sale.

Moncton city council then voted to expropriate the property for $6 million and pay for the site cleanup, which it estimated would cost $5 million.

Mayor George LeBlanc still prefers the expropriation option.

"I would frankly, in the circumstances at this stage, have proceeded with expropriation," said LeBlanc.

However, in a 4-3 vote, city council voted on Monday to put up the additional $1.5 million in exchange for having Warren Gate Investment Inc. take on the responsibility for cleaning up the property.

Moncton lawyer Steve Truman said the two parties couldn't agree on the value of the land.

"There still remains a difference in terms of the respective market value assessment," he said. "We've had our appraisal done and they've had theirs."

Moncton will pay $8 million for the land.

The downtown site is the city's preferred location for a new $105 million sports and convention centre.