The company, which has partnered with Magnetic Capital Group Inc. on the project, is asking the city to eliminate the compound interest accrued since 2018, highlighted in a letter dated Dec. 3.
As of right now, a projected cost of nearly $3 million is owed to the City of Regina which includes the cost of backfilling the site and late payment penalties.
Smith Street Lands is asking the city to accept $2,124,295.78 for the cost of the backfill and $129, 246.76 for property tax arrears. It would bring the total cost to $2,253,542.54 plus property taxes between now and Jan. 18, 2021 — the current closing date.
“If we cannot agree to eliminate the compounding interest that has been accruing since July 2018, we will not be able to close on the property as that would not be able to close on the property as that would push the purchase price too far exceed the appraised value of the property,” Smith Street Lands said in the letter.
Smith Street Lands had been trying to purchase the site at 1971 Albert St. for nearly two years and was finally able to get the property under contract on Oct. 27, 2020. It gained control of the site just over a month ago.
Outlined in the city’s executive committee’s public agenda on Wednesday, the committee recommended council deny Smith Street Lands’s request.
“There are only certain circumstances upon in which we can excuse property taxes and administration’s recommendation to council is that this request does not achieve those things,” said Sandra Masters, Regina mayor.
“Anything we can do levitate or advance that sale would be preferable, but we can only do what the law allows us to do.”
Although tabled, the report did provide one option that will be discussed by council.
“Approve a conditional grant equivalent to a partial property tax reduction of $600,000 payable upon the owner receiving an occupancy permit (or substantial completion as otherwise determined by the city) for a permanent structure on the property,” the option read.
The site has been sitting vacant since 2017 after work stopped on the Capital Pointe project — a promised a 27-storey condo and hotel complex, leaving a giant hole in the city’s core.
The city paid to have it filled in 2019.
On Dec. 2, city council approved Smith Street Lands Ltd.’s application to build a temporary parking lot.