Regina’s Capital Pointe sale collapses, another potential buyer standing by

The contentious sale of Regina’s vacant Capital Pointe property has fallen through, but there is at least one other interested party still waiting in the wings.

Royalty Developments Ltd.’s  $2.2-million offer was accepted at the end of 2019, but the company’s attorney confirmed Monday that it has been withdrawn.

“It has fallen through as a result of Royalty having failed to meet or waive its condition relating to a zoning change to allow parking on the property,” the lawyer, Grant Richards, said in an email to Global News.

The vacant downtown lot, on the northeast corner of Albert Street and Victoria Avenue, was listed for $8.5 million. The price was lowered to $2 million last August with the requirement for any buyer to assume the associated property taxes.

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Three bidders — Royalty Developments, JYR Investments and Smith Street Lands — made offers on the property.

At $2.8 million, the one by Smith Street Lands was highest, but The Merchant Law Group filed it late.

Upon learning Royalty was successful, The Merchant Law Group filed an appeal.

Smith Street is still interested in the property, Merchant Law’s Tony Merchant said, and will be back in court regarding its appeal on March 20.

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“Our hope is that the Court of Appeal deals with the legalities in a practical way and approves the Smith Street Lands purchase,” he said.

“If they do that, that solves the problem for the taxpayers because they will be fully paid even with this high rate of interest and it also solves the problem just for Reginans, generally, who want an 11-year eyesore to come to an end.”

Like Royalty’s offer, Smith Street’s includes a condition that the land be rezoned for parking over the short term. Unlike Royalty’s offer, which had a 60-day limit for the change, Smith Street’s has no timeline.

“Smith Street Lands wouldn’t contemplate going many years before putting something practical and profitable there,” Merchant said.

Smith Street Lands is comprised of shareholders including Bison Properties Ltd., Victoria Acres Development Corporation and a numbered company, which is owned by Evatt Merchant and Pana Merchant.

Smith Street has developed property in Regina for over 50 years. They developed 2001 Cornwall St. with 106 suites, and commercial development on the main level of Centre Pointe Plaza.

Plans for 27 storeys of condominium and hotel space on what’s come to be known as the Capital Pointe lot were announced in 2009. Construction began in 2015.

The developer, Fortress Real Estate, became embroiled in a fraud investigation linked to similar projects in Manitoba and Ontario. The project came to a standstill in 2017, leaving a gaping hole in the ground. The City of Regina eventually ordered the landowner, Westgate Properties, to backfill the site. The city ended up doing so itself at a cost of more than $2 million.

A mortgage firm with close ties to the developer has remained on the title as property taxes have gone unpaid.

The sale of the property has been and will continue to be handled by the courts.