Saskatchewan

Regina councillor says proposed measures could protect taxpayers from failed developments

A Regina city council proposal would require performance securities before the city grants development permits, which council hopes would protect taxpayers if development projects fail, as the Capital Pointe project did. 

Performance securities mean 'if something goes wrong … taxpayers aren't on the hook directly': Andrew Stevens

Plans for the 27-storey Capital Pointe building, at the site of the former Plains Hotel, began in 2010. The project never materialized, leaving a gaping hole that's now being filled by the city. (Matt Howard/CBC )

A Regina city councillor is looking forward to a proposed change that could protect people if development projects fail, as the Capital Pointe project did. 

The proposal would allow the city to require performance securities — bonds issued by an insurance company or a bank to guarantee completion of a project by a contractor — before the city grants development permits.

"The performance security is basically proof that you have cash to start and complete a project," Coun. Andrew Stevens said Thursday. "If something goes wrong, we're not on the hook, or taxpayers aren't on the hook directly." 

The performance security proposal is included in the development permit section in Regina's proposed 2019 zoning bylaws. 

The provision says the city development officer could require "a letter of credit, performance bond or any other form of assurance of a value" before granting a development permit.

This would ensure the project happens in accordance with the time frames, development standards and conditions of approval.

It also means the city could have money or financial security on hand to remediate a development site or complete a project, if the developer cannot. 

Stevens said this could have been helpful in the case of the failed Capital Pointe project, because the city could have used the developer's money or assets to fill the hole after the planned  27-storey condo and hotel complex never materialized.

It instead amounted to only a fenced-in hole at 1971 Albert St., which is supposed to be filled by October. The city has to pay close to $3 million to fill that hole, and must try to recover the money. 

The site is now up for sale for $8.5 million.

Stevens said he's heard from concerned residents who have said they want measures in place to prevent such situations from happening again.

"People are suspicious, especially of of large companies like that that don't have a reputation grounding in our community," he said.

Stevens said hasn't heard much feedback about the performance securities proposal, although he anticipates big developers will likely seek clarification on the implications. 

Fencing has gone up around the Capital Pointe hole in downtown Regina, while equipment is on site in preparation for filling the hole. The work is expected to be complete in October of this year. (Matthew Howard/CBC News)

Other cities such as Winnipeg, Calgary, and Edmonton use performance securities for conditions related to landscaping and general development permits, a city spokesperson said in an email. 

"Performance securities provide a means for cities to have greater assurance in a developer's capability to follow through with a significant project as planned. They are allowed through The Planning and Development Act, 2007 and applied at the discretion of the municipality," they wrote. 

"While securities help to mitigate the risk of incomplete developments, unforeseen circumstances may still arise from time to time." 

This measure is part of the Regina's new proposed zoning bylaw, which regulates land use and development.

The proposed updated bylaw comes before council on Monday, with several people scheduled to present on fitness facilities and about the proposed sign bylaw.

Mayor Michael Fougere declined to comment on the performance security measure, saying his views on the matter will be made known when it comes before council. 

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