Saint John council has agreed to give more time to finalize the option agreement terms for the Fundy Quay development.
The decision comes as the city waits to hear back from the province on its infrastructure funding applications for the site.
In December, council approved an option agreement and ground lease with Fundy Quay Developments for the former coast guard site.
Local developer David Elias plans to build a $250-million multi-use development featuring commercial and residential spaces.
According to a staff report, the rent for the ground lease and the pricing structure for the option to purchase were based on the city delivering a “development ready” site.
The city had applied to the province for $10 million over five years to help remediate the site, which includes upgrading the sea wall.
“As the required provincial infrastructure funding to prepare the site for development was not secured at the time, the option agreement provided additional time for a decision to be made on the City’s infrastructure funding applications, and allowing the City and the developer to finalize the terms of the agreement,” said the report.
The option agreement allowed for three more months to complete the terms of the agreement, but in early March, the city was informed the project was not selected in the current round of funding under the Integrated Bi-Lateral Agreement with the federal government.
Since then, the province re-engaged the city and Develop Saint John on options to move the project forward.
“While these discussions are positive, the ultimate decision on infrastructure funding has still yet to be concluded. In light of the recent outbreak of COVID-19 and the challenges facing the province and all of Canada, it is anticipated that more time will be required to finalize a decision,” said the report.
“While both parties have agreed in principle on the final terms of ground lease, until there is clarity on the provincial decision regarding the infrastructure funding for the Fundy Quay, the final version of the ground lease cannot be completed.”
Council agreed at their Mar. 23 meeting to extend the three-month deadline to May 29, 2020.
Steve Carson, CEO of Develop Saint John, said in a previous interview a lack of provincial funding for the site remediation would put the future of the waterfront development into question.
In addition to the $8.5 million budgeted by the city, Carson said they also require $13 million from the federal government.
“About $3 million of that is already committed, the rest is conditional on the province’s $10 million,” said Carson.
“If we don’t have the provincial funding, which means we don’t mean the federal funding, it really is going to make it a challenging development. It’s part of the reason [the property] has sat vacant for over a decade and why it’s a parking lot today.”
