Grand Forks city council won’t take property from a developer as security against unfinished work on a subdivision.
Chuck Varabioff appeared before council Monday concerning his proposed 20-lot subdivision at 2345 68th Avenue. He said construction began last year based on city-approved electrical and sewer drawings.
However, about six months ago, the city sent him a revised electrical drawing that changed the location of the main service pole. That ended up costing an extra $70,000, money that had otherwise been set aside for paving, Varabioff said.
Varabioff said he hopes the city will reduce the 125 per cent security required for unfinished work. That money is set aside in case the subdivision isn’t otherwise completed, but council has the discretion to increase or lower the amount.
“I’m asking that the bond be lowered in order to allow us to get titles to the properties, end up selling them, and then maybe in six months or early next spring, we’ll get the paving done after we have some lots sold and some houses started to be built,” Varabioff said.
“I know that’s a big ask, but once we have titles and start selling properties, that increases your tax base right away. If I put up a bond, that’s money that you’re giving back to me in a year or two years.”
Varabioff said he didn’t understand why the city’s electrical department didn’t flag the pole location as a problem sooner so that it could be changed before construction drawings were prepared.
“I’m sure you don’t want to see that development left sitting the way it is for the next five or 10 years because I can’t pay for the paving and the bank takes it over,” he said. “It’s not good for the community.”
In addition to asking for a reduction in the amount of the bond, he asked that he be allowed to use property as security rather than cash.
City manager Duncan Redfearn said while that arrangement would be unusual, it’s within council’s power to do so. He said in the event the subdivision isn’t otherwise completed, the property could be sold and the proceeds used for that purpose.
Mayor Everett Baker said he wanted to see the development finished and his only qualm was what precedent might be set by agreeing to Varabioff’s request.
Councillor Neil Krog said he was also willing to look at taking property as security. “The whole point is to ensure that the subdivision is finished appropriately, and this land would just ensure that it’s done,” he said.
However, councillor Rod Zielinski said he was concerned about rising costs over time. “Someone put 125 per cent in that bylaw for a reason,” he said. “And then when you throw on top of it trying to value land in this community, whether it can be sold or not, is another issue. There’s just too many variables.”
Zielinski proposed that Varabioff’s request to use property as security be received for information, with no action taken. His motion passed with councillors Deborah Lafleur and Christine Thompson in favour and Krog and Baker opposed. Councillor Zak Eburne-Stoodley excused himself from the discussion because he is a neighbour to the property.
Council has not yet decided on Varabioff’s request to lower the security bond amount.
Varabioff is also asking for a development variance permit that would eliminate a requirement for a concrete curb and gutter and allow a flush asphalt edge instead.
Council has made no decision on that request yet either, as neighbouring property owners need to be notified first.
(CORRECTION: An earlier version of this story stated that council declined Varabioff’s request for a lowered security. But mayor Everett Baker says that will be addressed as part of the development permit.)
