Value of Parcel Y in Saskatoon doubles since 2006
According to recent appraisals of the land known as “Parcel Y” today’s current market value is somewhere between $10.4 million and $11.6 million, well over twice its value in 2006 when it was purchased by Lake Placid Developments for $4.8 million. That deal fell apart when Lake Placid failed to pay the purchase price when it was due on October 30 of last year.
Saskatoon city council had been preparing for another request for proposals on the land but on March 22 Lake Placid CEO Michael Lobsinger and a new partner, Dr. Karim Nasser appeared before council indicating that funding is now available and asking for reinstatement of the previous agreement. Council will likely vote on Monday and reach a decision on whether or not they will enter a negotiation with the developer.
Lobsinger and Nasser have indicated that they are seeking reinstatement of the previous agreement and have suggested that an interest penalty for late payment would be appropriate. They’ve also stated that they will not submit a proposal for the land if the city chooses to reopen requests for proposals.
The 2.43-acre site on the riverbank in Saskatoon’s Central Business District is intended to become to primary anchor at River Landing, and currently its use is restricted for a hotel, condominiums, street-level retail, a public gathering spot and parking. Lake Placid had proposed a $200 million development that met the requirements.
The Star Phoenix coverage is here.
I’m always happy to answer your Saskatoon real estate questions. All of my contact info is here. Please feel free to call or email.
Norm Fisher
Royal LePage Saskatoon Real Estate
7 comments so far. We'd love to hear your thoughts.
April 10th, 2010 at 4:24 PM
I promise my questions aren’t sarcastic because I can’t imagine that I’m correct. In the interest of full disclosure, I have paid minimal attention to all of this mess, but:
1. Am I correct in assuming that they are not willing to pay the appraised amount for the land and still want to pay the price that they screwed the city (and its citizens) out of years ago?
2. If the city attempts to open up the competition they won’t re-bid? Are they attempting to politically blackmail the city?
April 10th, 2010 at 4:53 PM
Hey Ginger,
1. Lobsinger and Nasser have indicated that they’re willing to discuss any agreement, but they have also said that they believe the previous agreement, plus interest is “fair.” I would expect as much at the start of a negotiation. That said, I seriously doubt that the city is in a position to grab $10-11 million for this land from anyone. Nobody else has expressed any interest in it at $4.8 million. They would likely disagree with the characterization that anyone was ‘screwed” however.
2. Blackmail. I don’t know. Lobsinger said that the last process took thirty months and he wasn’t feeling prepared to go through that again. I think he believes that River Landing Village’s time is now and that he is either going to move forward to get it going now or move on to other things. There’s only one way to know if he’s genuine or bluffing and a 50/50 chance that we end up with nothing finding out.
April 10th, 2010 at 5:32 PM
Ha! Thanks, well said. I was concerned that I was having a pretty visceral response so thought I may need a reality check.
Would it have been a different story if there had been people interested in it at the 4 million dollar range? Then would we consider the city screwed (I know, I know, my eloquence is striking really
) ? I just mean that I don’t think it makes it ok that the city was never properly paid just because there were no other active participants at the time. While waiting for Lobsinger couldn’t the city have used that time to further advertise, attempt to partner or something?
I certainly understand the ‘time is now’ mentality. However, was the 30 months due to city bureaucracy or his own continuation of deadlines, failure to pay, etc? Because if it was city bureaucracy then I fully understand his hesitation; however, if it was because of him and his inability to secure funding, then I have no sympathy. We may also be splitting hairs – or ‘b’ words as it is, over the use of ‘blackmail’ vs. ‘bluffing’. I just don’t like feeling like the city is being put over the barrel – either give it to us at a significantly discounted value or don’t, but if you shop around for a better deal then we’re out totally? That just seems dodgy at best. Especially because we’re back at square one due to Lobsinger’s inabilities.
I may need to do some more reading I suppose because while I think it’s an amazing idea I am quite unsympathetic towards Lobsinger.
April 10th, 2010 at 6:01 PM
All good points Ginger.
Personally, I think Lobsinger has demonstrated a lot of humility and regret that things weren’t able to come together and I’m certainly impressed by the guy’s tenacity.
Given what happened in late 2008 and the difficulties in arranging financing that ensued, I’d have been surprised had he been able to pull it off in time to meet the deadlines. I can’t imagine what it would have been like trying to get a couple hundred million together for a condo project in 2009.
If anyone else were to express interest it would be worth exploring, but at this point Lake Placid still seems to be the only player and you know what they say about “a bird in the hand.”
April 11th, 2010 at 10:31 AM
“impressed by the guy’s tenacity” Lobsinger really is not going to going away that easily. Lake Placid from what I hear owns the former legion land. Parcel Y is stuck for many years in my view for getting developed by anyone else that would require the Legion Land. Rumor has it, there are a lot of liens put on it by unpaid architects and other design professionals.
No other project will be coming forward that is as grand as Lake Placid’s.
April 11th, 2010 at 11:40 AM
Steven,
Good points. Lake Placid holds title to both parcels highlighted here.
Given the size of these parcels relative to the whole, I’m not sure how relevant they are in terms of other development options but you may well be right.
More details on how that all unfolded in this Canada.com article from early 2008.
April 15th, 2010 at 9:55 AM
I think the surest way to ultimately kill this project once-and-for-all is to force them to go back to their lenders for an additional $4 to $5-million for the land purchase. Honestly, with $85-million plus invested in River Landing – what are the City of Saskatoon’s other viable alternatives? Besides, when housing takes a hit in a few years so will land values.
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