Nelson Sergerie
GASPÉ – Logements CVP’s 144-unit apartment project near Carrefour Gaspé has still not been initiated, and Gaspé will exercise its termination clause if necessary.
A termination clause is a contractual mechanism that makes it possible to sanction a party’s failure to fulfill its contractual obligations by providing that the contract will be terminated at the fault of the offending party.
The company purchased the municipal land in September 2021 by paying $300,000, when its assessment at the time was $566,000, to create Le Domaine de la Baie.
The investors also posted a $266,000 bond, repayable in four instalments each time a complex was built.
The project comprises four 36-unit buildings, and the apartment buildings were to be constructed at a rate of one per year until 2026.
Logements CVP had promised to start construction on December 31, 2023. A first foundation was to be poured on that date, but it never happened.
“As this is a file that falls in the hands of our prosecutors, I would be a little embarrassed (to comment on it). The Town of Gaspé wishes to preserve its rights in this matter. I still have confidence that we will be able to move forward. There were deadlines in this contract and we just want to preserve our rights with prior notice,” notes the mayor of Gaspé, Daniel Côté.
The mayor does not want to discuss the possibility of taking back possession of the land. “I don’t want to go that far if the project doesn’t work. Currently, it works, but let’s admit that there were pitfalls and that it was necessary to lift the termination clause which would give the land to the Town. I also don’t want to harm the legal process. We are not heading towards that. For the moment, we are waiving a notice in accordance with what is provided for in the Civil Code and in the contract provided for with the developer. Some deadlines have been missed. We are only protecting our rights,” explains the mayor.
The announcement was made with great fanfare, and the project was presented as the largest real estate project in 50 years in Gaspé.
The site provides an exceptional view of Gaspé Bay, close to a shopping centre and less than five minutes from the heart of downtown and an equivalent distance from the LM Wind Power plant.
The Ministry of Natural Resources had requested $381,000 from Gaspé in September 2022 for the sale of the land to allow the transaction to close.
The ministry invoked a 1978 clause when the Town acquired this land from the ministry which preserved certain uses for the site.
Furthermore, the project also encountered technical issues due to the slope being steeper than expected, which forced the developer to return to the drawing board, erasing the hope of launching the project in 2022.
The pandemic also caused delays for materials, which scheduled the start of construction according to the initial plan for 2023. Initially estimated at $25 million, the project is now likely to exceed $40 million.