Hoarfrost gathers on the branches of a tree next to the vacant 50/50 lot in downtown Yellowknife in February 2019. Ollie Williams/Cabin Radio
Yellowknife’s city councillors have unanimously approved the sale of a downtown lot for $1 to a developer proposing to build 180 or more housing units on the land.
The 50/50 lot has been vacant for years despite various municipal efforts to sell it. Holloway Lodging, which owns half of the next-door mall, is now set to acquire the lot and construct a 12-storey building.
Councillors argue such a cheap sale of downtown land is justified because nobody else wanted it and the city urgently needs more housing.
However, former Yellowknife mayor Mark Heyck on Monday called the deal “corporate welfare at its finest.”
“Let me see if I have this right,” Heyck wrote in a tweet. “The same YZF councillors that cut taxes for ‘businesses’ at the expense of residents – foisting a nine-percent tax increase on Yellowknife households to make up the shortfall – now want to give a multi-million-dollar southern hotel company a sweet-heart land deal?”
The agreement was first pitched to councillors earlier in September. Monday night’s formal vote gave city staff permission to go ahead with the plan, which must also follow all of the city’s usual planning and permitting stages.
Theoretically, it’s still possible for another company to submit a separate proposal and compete with Holloway for the land. Given the absence of any other realistic offers in almost a decade, that outcome is unlikely.
Holloway says its finished building will have commercial retail space on the ground floor and units on the 11 upper floors that range from studios to two-bedroom homes.
Councillors did use their Monday session to make a minor amendment that instructs the city to ensure at least a portion of Holloway’s new building is dedicated to affordable housing.
Mayor Rebecca Alty, who initiated that amendment, said the ability to set that kind of condition justified the $1 sale price.
“It’s not free land, it’s an investment to address current community needs,” Alty said, reading out a statement designed to explain the sale to residents.
“In exchange for the subsidy, the city becomes a partner in the project and gets to dictate some conditions – like that the construction has to be complete by certain date, and that a certain number of units must be made affordable.”
Alty said the influx of residents would also help to revitalize Yellowknife’s downtown and add tax revenue that might take the edge off future tax increases.
Councillor Robin Williams opposed Alty’s amendment.
“The part that I was mostly in favour of was just the housing component, not necessarily its affordability,” Williams said at his penultimate meeting before stepping down as a councillor.
“If the developers find a business case for high-end housing, rental housing, there’s also a lack of that in our community as well.
“I just have hesitations about putting up other roadblocks that might not be in line with the vision that the developer has in mind.”
Councillor Shauna Morgan, though, said the development “could fill a big gap” in affordable rental housing, even if only a small percentage of units were set aside in such a manner.
Similar projects that rely on federal funding are often set targets whereby 20 to 30 percent of units built must meet the federal definition of affordable housing and must remain so for an initial period of, say, 15 to 20 years after construction.
Monday’s amendment gives city staff freedom to define exactly how affordability is measured in any deal with Holloway.
Several councillors expressed a desire for the project to come back to council at a later date once more is known about Holloway’s plans. So far, councillors have not seen any detailed drawings or proposals beyond headline figures.
“I think we have to put a little bit of faith in this company that has already invested within Yellowknife and wants to do a little bit more, and put a little faith in our administration and let them do their portion of it,” said Councillor Stacie Arden Smith, who is seeking re-election.
Morgan, who is stepping down after two terms, responded: “This is not about faith. This is about putting in place a process, and agreements, that will lead us to the goal that we all agree now is what we want.”
Alty said the city has bylaws and processes in place that can adequately supervise the development.