The city of St. John's has fired back in a legal battle with Danny Williams over conditions attached to the huge Galway development in the city's southwest end.

In a court affidavit filed this week and posted on its website Thursday, the city denied that it has treated Williams unfairly, saying it has made "significant concessions" to allow work to start on the first 29 of some 5,000 homes planned for Galway.

Danny Williams Galway Nov 13

Williams has said he's being treated differently from other developers, but the city says it has made significant concessions to allow Galway work to begin. (Bruce Tilley)

Conditional approval was also given for one industrial property, as long as the necessary infrastructure, including roads, a roundabout, and a trunk sewer, were completed.

The developer — 10718 Nfld. Inc. — has not met all the conditions and any delays are its own fault, the city stated in the affidavit, denying allegations that it has acted in bad faith.

Part of the dispute involves development agreements drafted by city staff, which contain what deputy city manager Jason Sinyard described as a standard arbitration clause to resolve disputes in a "cost-effective and timely manner."

Lawsuit a test of arbitration process

He said the court action launched by Williams will be a test of whether that arbitration process is legal.

"This will provide certainty with respect to the city's power to establish the terms of a development agreement, not only for this development, but also for other developments within the city."

The Galway project has many development agreements, the city said, because of its scale, and Williams's company has chosen to proceed in stages.

It said in the affidavit that it does not want to be left holding the bag for servicing costs that should be covered by the developer.

New home construction workers

Many new homes in Galway are nearly move-in ready, but the city said it will not issue occupancy permits until required infrastructure is in place. (Bruce Tilley/CBC)

Homes which are built, or nearly complete, will not be given occupancy permits, the city said, until a list of infrastructure demands are met.

Building permits for more homes are also contingent on the completion of outstanding items.

As for the Costco warehouse, which is relocating from the city's east end, no building permits will be issued until a roundabout is built and operating; Danny Drive must also be fully serviced and paved, with curb and gutter and a regional detention pond completed.

The two sides will be in the Supreme Court of Newfoundland and Labrador on Dec. 19 to make their arguments before a judge.