MEMORANDUM

TO: Mayor and Council February 4th, 1977

FEB 7 1977

FROM: L.D. Pollock
City Administrator

Re: Nu~-West Development Subdivision - Security Deposits

When the Nu-West Development's Land Use Contract was under consideration by
Council, the question of Cash Deposits and the Letters of Credit for Offsite
Servicing Costs and Subdivision Servicing Costs was considered. At that time,
Council confirmed that they wised to have all Deposits and Letters of Credit
for all phases of the subdivision filed at the outset. Nu-West Development

has pointed out that this is a considerable financial burden to them as they
will be required to put up Letters of Credit for future phases of the subdivision
and will incur considerable extra financing costs because of this. They are
not objecting to depositing in advance for the Offsite Servicing Costs and the
Park Development. Their main concern is obtaining Letters of Credit now for
Servicing Costs in the future phases of the development.

Alderman Laking and I met with Mr. Schellenberg, of Nu-West Development, to
discuss this matter and Mr. Schellenberg asked if he could speak to the Council
and ask for a change in this procedure. He would like to request that Council
permit them to deposit all of the funds required for the Park Development and
Offsite Servicing Costs along with Letters of Credit for the Servicing Costs in
the first phase of their development, and that Letters of Credit for subsequent
stages of the development ‘be deposited when the Subdivision Plans for these
phases are approved.

From a technical point of view, there is nothing wrong with this procedure and
it is the procedure followed in most subdivisions, that is, the Subdivision Plan
is not signed by our Approving Officer until all of the Letters of Credit and
Deposits have been made. In the case of the Nu-West development, they will be
receiving Subdivision Approvals for each stage as it comes up for development
and therefore the Deposits can be obtained in advance of each phase.

I believe Council's concern at the time of discussing the Land Use Contract was
that after the Land Use Contract was passed, Nu-West might develop their first
phase of subdivisicn and then not proceed to subsequent phases. This is a
possibility, however, we would have all our Offsite Servicing and Park requirements
taken care of and the Land Use Contract would still be in place so that the project
would have to proceed on the terms originally set out by Nu-West unless a further
Land Use Contract was negotiated. Requiring all of the Deposits at the outset
might insure that the development would proceed in the shortest possible time in
accordance with the Land Use Contract phasing, as the Developer would want to

incur the minimum amount of financing costs. Requiring the Letters of Credit for
each phase of the development as they come up for development might permit some
flexibility in the timing of future phases of the development, but would not place
us in the position of being able to force the Developer to complete in accordance
with the schedule set out in the Land Use Contract.

Mr. Schellenberg will be in attendance on Monday night and will have further
information for Council on the effects of the financing costs on the development
to support their request.

More: See letter from .
No-West Deve lop mount attached, LE _—

Cury CeenK L.D. Pollock