Dave Hutton of The StarPhoenix documents the missed deadlines that have defined the Lake Placid project at River Landing. Hutton has a story on the latest deadline but it can be summed up in one paragraph.
Six months ago, Lake Placid CEO Michael Lobsinger and Nasser, backed by a long list of businesspeople, stood in front of council and said they expected financing to be in place imminently with shovels in the ground within six weeks.
So Lake Placid Developments hasn’t been able to come up with the money for River Landing.Â Apparently the fall of the capital markets has made it very hard to come up with the $200 million dollars needed to build the cornerstone of what we hope River Landing to be.Â While I was hunting around online for some information on their other projects, I realized that there was only two.Â A condo development in Kelowna and a big office renovation.Â There may be other projects but they are not listed on their website.Â When this project was introduced, there was a lot of talk of a world class companyÂ coming to Saskatoon to do a world class project but it looks pretty dead right now.
I agree with the Star Phoenix that we need to find out why the financing wasnâ€™t completed.
People expect this land to generate something of which Saskatoon and Saskatchewan can be proud — a landmark akin to the Bessborough or, as prospective developer Michael Lobsinger of Lake Placid noted when he proposed the hotel-condo-office development in 2007, the Hanging Gardens of Babylon.
Considering the public treasure and emotions that have been invested in the site, there is no reason for city council to now water down expectations for any development.
For better or worse, the Lake Placid development — like proposals that have come before — failed to materialize. Whether this is a fault of the global markets, a reflection on the developer’s abilities, or the fault of public expectations, the municipality’s job now should be to re-assess the land’s potential and head back to the marketplace, having made only those adjustments required to reduce the odds of failure without unduly impacting on public expectations. And once requests for proposals are out there again, there is no reason to prevent either developer who initially bid on the project from trying again.
While I had initially gone along with the idea that it was limited liquidity global markets that had delayed the financing and to be honest, no media reports had really questioned that assumption, I am wondering now if the developer is over their heads.Â It was a couple of months ago that the Bank of Canada had said that the worse was over and some of the liquidity problems were dealt with.Â So we are left with several questions?
- Is a $200 million project too big for Saskatoon?Â Too big for the liquidity market?Â A combination of both?
- Is this project flawed in some other ways on a business level which is making the banks stay away?
- Is our developer not able to seal the deal on a project that large?
- Are we about to settle for a smaller project when a change in global economic markets may allow for a larger project in a couple of years time?
Perhaps my biggest question is was the due diligence done by the city to determine whether or not a fairly new development company could in fact deliver the â€œhanging towers of Babylonâ€ and develop the most valuable property in Saskatoon and one that could define downtown for 100 years or more.Â I guess I also want to know is it common to turn over the most valuable property in a city to a company that has only developed one other property and renovated their office?