Difference on escrow vexes County of Wetaskiwin, developer

County of Wetaskiwin council continues to wrestle with a tabulation of what it should cost to finish the Mountain Shores Land Ventures...

The County of Wetaskiwin and developer Mountain Shores Land Ventures are disagreeing by millions of dollars on what will be needed to finish the Dorchester Ranch Phase 1 subdivision (area south of golf course only).

County of Wetaskiwin council continues to wrestle with a tabulation of what it should cost to finish the Mountain Shores Land Ventures project after hearing a report at their regular meeting Jan. 10.

Councilors heard a report written in Dec., 2016 from WSP Engineering, represented by Marty Rowley, Mike Minshall and Nathan MacLeod, regarding the development company’s unfinished subdivision called in the report “Dorchester Ranch Phase 1” located south of Pigeon Lake on Range Road 11.

County assistant CAO Rod Hawken explained by phone Jan. 12 that the original project was estimated at $6.5 million in 2013, and the developer provided that amount in escrow. As work progressed and was verified by the developer’s engineer, money was removed from the escrow. Eventually, $3.5 million was removed from escrow, leaving $3 million. Hawken stated that as the county reviewed the project as proposed, the $3 million left in escrow was not enough to finish the project.

The county provided a notice of default, part of the original agreement, informing the developer more money was needed in the escrow account to finish the project. Hawken stated no additional money was ever provided.

So the county placed a stop order on Dorchester Ranch Phase 1, froze the escrow account and froze work on the site until the funding shortfall was straightened out. The developer’s engineer estimated $4.998 million was need to complete the project, which meant an extra $1.998 plus the escrow money.

The County of Wetaskiwin disagrees.

WSP’s report, summarized in the council agenda package and received just before Christmas, noted “The WSP report outlines an estimated total of $9.8 million to complete the construction of remaining work of Phase 1 of the subdivision, including RR 1-1, affiliated forceman/gravity sewer works, engineering and contingency.

“Based on the findings of the report, council will need to consider all options available to them for the subdivision. Council has been advised by their solicitor that the Notice of Default and subsequent stop order do not force council to complete the subdivision as approved. The Notice of Default and stop order have been put in place to help recover any costs associated with work completed on the subdivision as decided by council should it exceed the remaining funds (in escrow).”

The County of Wetaskiwin and Mountain Shores Land Ventures have history concerning the project in question.

The council agenda stated, “At the July 7, 2016 Council for Planning and Development the following resolution was passed: That if Mountain Shores Land Ventures Ltd. has not remedied the outstanding defaults as set out in the Notice of Default issued by the County of Wetaskiwin on April 18, 2016, by 4:30 pm on July 19, 2016, that Administration shall: 1. Request that the Escrow Agent forward to the County the balance of the funds currently held in escrow pursuant to the Escrow Agreement dated March 2016; and 2. Proceed, at the discretion of Administration, with exercising the County’s rights to address the outstanding defaults of the Development Agreement dated October 8, 2013 and amended by way of the Amending Agreement dated March 24, 2016.

“Mountain Shores Land Ventures did not remedy the deficiencies as outlined and on the advice of the County Solicitor, the County moved forward with notice of default and registered a Stop Order on all properties in the name of Mountain Shores Land Ventures.”

The WSP report from December was intended to give council an up-to-date look at the subdivision’s current state. “On August 26, 2016, after multiple discussions in camera with Council, Administration contracted WSP to provide an assessment of the construction completion of RR-11 and the Mountain Shores Land Ventures development,” stated the council agenda.

“WSP was to assess the infrastructure within the Right of Way and prepare cost estimates to complete the project as contemplated in the Area Structure Plan, Development Agreement and Subdivision Approval.

“The intent of the assessment was not to comment on the workmanship or quality of works performed by the developer, design engineer or construction contractor but to provide a ‘snapshot’ of the work completed to date compared to the design and construction drawings submitted and the remainder of work required as outlined by the developer through his design engineer with an estimate of $4.998 million.”

The Dorchester Ranch Phase 1 was proposed to hold 174 lots described as recreation properties. The entire subdivision, including all phases, was proposed to hold over 400 lots. Some would be zoned country residential.

After examining several alternatives, council decided to approve administration’s recommendation that they accept the engineer’s report and also ask administration to obtain a report that outlines priority items, including costs to complete the subdivision, for councilors to examine at a later date.

The complete report is available on the county’s website, http://www.county.wetaskiwin.ab.ca.

 

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