This land is whose land?

City of St. John’s unsure if it’s still legally committed to sell land to developer

Daniel MacEachern
Published on February 21, 2014
A dense clump of trees marks the parcel of land off Blackmarsh Road that Karwood Estates wants to buy from the City of St. John’s. — Screen grab from Google Earth.

A local developer says St. John’s has committed to sell his company land for a proposed development — but the city is weighing all its options.

Karwood Estates has an application with the city to develop 4.3 acres of land off Blackmarsh Road into two four-storey apartment buildings (one with 32 units, the other with 20) and 10 three-storey row houses in a single condominium corporation. Greg Hussey, president of Karwood’s construction arm, says the city committed long ago to selling them the land.

But the city’s planning and development committee has directed staff to see just what their obligations are. Karwood first approached the city about buying the land in the late 2000s, two municipal elections ago, and each side blames the other for the delay in closing any deal.

At Tuesday’s meeting of the city’s planning and development standing committee meeting, Gareth Griffiths, the city’s manager of real estate services, said the city was approached by Hubert Hussey of Karwood to buy the land, which would require property to be purchased around it to provide access from Blackmarsh Road.

“The city did agree that we would sell it to him,” said Griffiths.

“We came up with a price per acre for this land, and it was subject to him getting rezoning approval. It took a while for him to get anywhere with this, for whatever reason.”

After a couple of years, said Griffiths, the city told Hussey the agreed-upon price was no longer appropriate, and they reached another agreement.

“A couple of years went by again, and now we said to him very recently, ‘Well, OK, that price is no good anymore because values are changing.’”

The city is appraising the land value, said Griffiths, to determine what the new price will be. Just how strong the city’s commitment is to sell the land to Karwood was discussed by councillors on the committee — with other options discussed, such as selling the land through public tender, building a community centre on the land or pursuing affordable housing options — with Griffiths noting Karwood can back out if it doesn’t like the price. In the end, the committee — which didn’t have objections to Karwood’s proposed development — directed city staff to determine if they’re still legally bound to sell Karwood the land.

But Greg Hussey — Hubert’s son — says the city clearly has a commitment to sell his company the land, and it’s the city’s fault the transaction has dragged on so long.

“That’s pretty much been a done deal now for five years,” said Hussey. “The only reason they didn’t take the money off us so far is they had paperwork that they wanted to do, and it took them this long to get it done. We’ve been waiting with the cheque to hand them for the past five years, and we’re just waiting for them.”

Karwood’s development arm has done a lot of work in the interim, said Hussey, including buying adjacent land and houses on Blackmarsh Road that they’ll tear down to make room for a road to access the property.

“We’ve done all our planning and engineering and worked with the people next door, got all the servicing done and in place,” he said. “You’ve got some new players at the city who haven’t read all their files. They’ve got to go read their files.”

Karwood’s ready to proceed, said Hussey, who doubted the city would come to any conclusion other than that the land should be sold to Karwood. Putting it up for sale to the highest bidder wouldn’t be much of an alternative, he said.

“Good luck with that,” he said. “It’s completely and utterly useless to anyone else, because there’s no access to it. The only way in and out is through back lands — we had to buy accesses to all that, and we wouldn’t have done any of that had we not had a firm agreement in place.”

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Correction: An earlier version of this story incorrectly identified Gareth Griffiths as Ken O'Brien, the city's chief municipal planner. The Telegram regrets the error.