Lot 262 affordable housing bids a bust

The Yukon government's much-vaunted plans to put affordable housing on the corner of Mountainview Drive and Range Road have hit a setback.

The Yukon government’s much-vaunted plans to put affordable housing on the corner of Mountainview Drive and Range Road have hit a setback.

The territory wanted to sell the 10-acre lot to the highest bidder on the condition that at least 30 affordable housing units be built on it. But it received only two bids by the April 27 deadline, and this week both offers were disqualified.

Both came with “strings attached” that required the government to help pay for the affordable housing units, said Rick Gorczyca, manager of lands availability.

That wasn’t part of the tender package floated by the government.

Now officials are scrambling to craft a new plan. It was hoped that the affordable housing units would be built by late 2013.

“I anticipate this would be somewhat of a delay, but I don’t know how big that would be,” said Gorczyca. “But this is a high-priority item. So it’ll be sooner, rather than later.”

The land parcel, known as Lot 262, has been touted by the Yukon Party government as one solution to Whitehorse’s housing shortage. Housing Minister Scott Kent has frequently referred to the project while fending off opposition criticism during this legislative sitting.

The Mountainview tender was supposed to give the private sector greater say in the development of land – a responsibility now largely assumed by the government and City of Whitehorse.

But the complexity and risks involved with the tender kept many developers away from the lot, which sits between the Takhini and Northland trailer parks.

Marsh Lake resident Gary Pettifor bid $10,000. And an Alberta company named Commonwealth Corporate Support Services Group bid just $100.

Pettifor didn’t return a call from the News.

Commonwealth Group proposed building 100 affordable housing units, said chief administrative officer Reid Lillico. But he declined to provide any more information.

The territory’s tender required the developer to rent out the affordable units for at least 15 years, at or below Whitehorse’s median rent.

Currently, that’s $800 for a one-bedroom unit, $813 for a two-bedroom unit and $1,050 for a unit with three or more bedrooms.

The Mountainview project’s size alone would deter many from putting in bids, said Doug Gilday, president of Narrow Gauge Contracting.

And the affordable housing units would likely be a money-loser, he said, unless it were offset with something like pricier condos added to the mix.

The developer would also need to negotiate with the city and have plans approved by council, with a tight December deadline before the lot reverts back to the government.

Development designs are complicated by various easements for power and utility lines.

“I read the proposal once and it was just too complicated for my taste,” said Gilday. “You could see getting bogged down in the permitting - it looked like it might turn into a mud pit. And I wouldn’t feel comfortable making an offer on it, and then not producing 30 units.”

Northern Vision Development also passed on the project. The company remains focused on its waterfront condos and commercial buildings, and its new Titanium Way business park, said president and CEO Rich Thompson.

“If we were getting involved with affordable housing, we’d have to do something unique and different,” said Thompson.

“It’s interesting because there’s a real demand for affordable housing in Whitehorse and we’d like to be part of the solution. But there’s nothing unique that we’d offer.”

The number of conditions attached to the lot also proved a deterrent, said Thompson. “The first-blush analysis of it was that it was a reasonably hairy project.

“I think a lot of people would have looked at it and said, ‘It’s just not worth it.’”

Contact John Thompson at johnt@yukon-news.com