The Gazette would like to retract a story published in Wednesday's paper that contained inaccuracies about a city council motion regarding a development agreement with Landrex Developers for Erin Ridge North.
The story reported that city council approved a $3-million loan to Landrex to begin construction of underground services that would serve the annexed lands.
In fact, at no time was there any discussion about the city loaning money to Landrex for this purpose. It was Landrex that agreed to provide a $3-million letter of credit to the city as a guarantee that services will be built to serve Erin Ridge North and other areas in the annexed lands.
In exchange, the city will contribute up to $1.6 million for the project.
The Gazette deeply regrets the errors. Below is a corrected version of the story.
Letter of credit
City council has asked Erin Ridge North developer Landrex for a letter of credit up to $3 million as a guarantee the company will extend sewer, storm and water servicing to other parts of the annexed lands.
In exchange, the city would contribute up to $1.6 million to help cover the cost of the work collectable once the work is completed.
"This is a very financially challenging phase to do," said Landrex president Larry Andrews during Monday night's council meeting. "We're doing this to accommodate the families along the highway."
The move comes after the city had asked Landrex to build an oversized sewer and extend water and storm systems to service new development beyond Erin Ridge North, including lands west of Highway 2 and north of Villeneuve Road. The work is over-and-above typical requirements for developers and would boost capacity for future subdivisions in St. Albert and even into Sturgeon County.
With Landrex taking on the servicing, council was able to delete three projects from its utility capital budget worth $2.6 million. Money left over from the Landrex payment will go to the city's future growth fund for future land service costs.
City engineering director Todd Wyman said the deal with Landrex made the projects redundant.
"The intent and the direction this money is going towards is no different than the [cancelled] projects," he said. "We're losing absolutely nothing."
City manager Bill Holtby now has the authority to work with Landrex on finalizing a development agreement.
Financial security
The letter of credit would act as proof that Landrex intends to complete the underground services. Should they not fulfill the terms of the letter, the city can take either $3 million or 20 per cent of the servicing costs and 100 per cent of the landscaping costs, whichever is less, from Landrex.
Currently, letters of credit issued to the city require a financial security of 50 per cent of surface and underground infrastructure and 100 per cent of landscaping costs. In comparison, Edmonton only requires 10 per cent of infrastructure costs and 200 per cent of landscaping.
Administration recommended taking a closer look at the financial security and letter of credit process for future developments next year. The Urban Development Institute offered to help, saying in a letter read by Coun. James Burrows the group could bring St. Albert closer in line with other municipalities in the Capital region.
Coun. Roger Lemieux later said he was proud of council's decision to allow the letter of credit. By adopting his motion, Lemieux feels council made a statement to the business community in and around St. Albert.
"We showed the development community [Monday] night that we are business friendly," he said. "It's important to get the new subdivision off the ground."
