North·Q+A

Why Yellowknife's mayor wants to sell a downtown lot for $1

Holloway Lodging Corp. is the only developer that's expressed interest in the land downtown — which the city purchased in 2014 for $1.45 million — since the city began requesting proposals for it in 2019. They want to buy it for $1.

Developer's offer is the only legitimate one Yellowknife has received since 2019, mayor says

Yellowknife Mayor Rebecca Alty voted in favour of allowing civic administration to negogiate selling a vacant lot downtown for less than it's appraised value. She joined Loren McGinnis, host of CBC's The Trailbreaker, to talk about the decision. (Mario Di Ciccio/Radio-Canada)

The City of Yellowknife agreed to let city administrators negotiate selling its downtown 50/50 lot for $1 this week. 

Holloway Lodging Corporation is the only developer that's expressed legitimate interest in the land downtown — which the city purchased in 2014 for $1.45 million — since the city began requesting proposals for it in 2019. 

The company, which already owns half of neighbouring Centre Square Mall, has initial plans to build 12- to 13-storey buildings on the land, with at least 180 new housing units and retail space on the ground floor. 

Yellowknife Mayor Rebecca Alty spoke with host Loren McGinnis on CBC's The Trailbreaker about the decision on Wednesday. Here's what they talked about. It's been edited for length and clarity. 

Why did you vote in favour of this sale? 

For me, it's about revitalizing the downtown, it's about housing and it's about our financials. And so this project is proposing 180 housing units. We do want to include that some of them are affordable units. 

Here in Yellowknife, everywhere I go, I'm talking to people and they can't get staff because there's no housing. You can't get daycare, because there's no place for people to go. And of course affordable housing has always been a challenge.

This is the city's way of providing a subsidy — so the city's providing the subsidy up front and then we become a partner and we get to dictate the conditions. 

Do you know how many units the city will say needs to be affordable? 

We looked at Canada Mortgage and Housing Corporation programs where it's 20 per cent for a minimum of 10 years and it has to be 80 per cent of the average median rent and tenants have to make less than the core income and then administration wouldn't be able to negotiate anything but that. 

This way is a bit more flexible because the other thing we're hearing is that we need more three bedrooms and currently the proposal is bachelor, one, and two bedrooms.

The 50/50 lot in downtown Yellowknife is named for its location on 50th Street and 50th Ave. (Hilary Bird/CBC)

So, perhaps they come forward with, 'hey, we'll do 18% affordable housing, but we'll increase and we'll add three bedrooms.' And that's another thing that our community needs. 

(Alty did not directly answer this question. It sort of came up at Monday's city council meeting too. Coun. Shauna Morgan asked that Holloway be required to build a minimum number of housing units, not specifically affordable housing units. Civic staff said that would be premature.)

What kind of assurances do you have that the sale would add this much to the housing stock and, as a part of that, there will be affordable housing?

They still need to put forward their full proposal. The city will have to evaluate it and determine if we go forward or not. And then from there we get into the legal agreements of, 'this is what you commit to.' 

They've got to put in their development permits, they've got to put in their building permits, the city approves those, so there is a number of steps still to come. This motion was granting the administration the right to negotiate below appraised value. 

How did you decide to go with this one company? 

The RFP has been out for three years now. It went out in February 2019 and it's been out since and this has been the first proposal to come in. 

Nobody has come in and said, well, would you consider XYZ? This is our first proposal. The RFP isn't complete. So, if there's anybody else that wants to put a proposal in, by all means, put it in. 

The other thing with this lot is it has a lot of caveats, which are legal things that you can and can't do on the lot and those have been put on throughout the year. So for example, when the city bought the lot, I think there's 13 caveats and those caveats still remain. So you can't build a hotel on it. Centre Square Mall has their loading entrance, so you have to maintain that entrance. 

It's got a lot of conditions on it, so it's not a lot for everybody, but we're definitely interested in hearing if there's other proposals out there. 

Some people have spoken out about this, saying, look, the city spent money on this. Taxpayer money, of course… 

No, no. The city bought this in 2014 and it was with revenue from land sales. So it's not taxes. 

That's an important detail. But the city reached into its own coffers and spent money on this and is now giving it away. How do you respond to the concerns people have about spending the money and then giving it away, and what that says about fiscal management?

I voted against buying the land back in the day, back in 2014, because we didn't have a plan for it. But, we've got this lot now. We can't look back. We got to look forward and what do we do with it? And so this is: we're putting a contribution in, in exchange you have to deliver affordable housing, it's got to be revitalization. 

Having 180 units come downtown, that's going to have an impact on businesses. That's minimum 200 plus customers now in the downtown. The plan that came the year after we bought it was to build a $2-million park and that was going to cost taxpayers and then the ongoing operating costs. So luckily council voted against turning it into the park. 

We're not like the federal government where you know, they provide huge sums, $5 million plus for capital. We don't have that. Or the government of the Northwest Territories — right now they've got a program that helps residents with $800 a month as a rent supplementary. 

This is, if you were to calculate it, if it's 20 per cent for 10 years, it's about $300 a month for rent supplement for residents. It's not as much as the territorial government's rent supplement. It's also up front during the riskiest part of rental constructions. The money was spent in 2014. Now it's working on a project that will meet many needs of this community. 

Coun. Neils Konge had initially suggested Holloway offer a refundable deposit, something that would hold the account of the company accountable to its commitments. Why didn't that happen? 

That'll be in the discussion. Holloway is open to that. If we put the money up front and we get half back when we put this development permit in, half back when we get that in. So, yeah, that's going to be part of the discussions. It's not a done deal at all. 

Holloway could say, 'no, we wanted it for less than appraised value,' but we didn't want any extra conditions. So they could say, 'hey, we'll just buy it outright' or, 'hey, it's not the project for us.' There is still a lot to negotiate through this process.

When is construction expected to start? 

I think it would be two years, they'd start construction.

Part of this agreement too is that the purchase agreement says you have to have your development and building permit by this time, then you've got to have it constructed by this time. 

And then part of our agreement of selling it for less than appraised value is if they don't meet those conditions, then the land comes back to us, which I don't want. I want a project to go forward. But it's a good condition, like they can't take the lot and sit on it forever. 

If it's not built by this time, the land comes back to the city and we start this process again.

now