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TSMVPL launches $161 million civil lawsuit on defeated development plans

Three Sisters Mountain Village Property Limited is suing the Town of Canmore and all seven members of the previous Town council for $161 million.
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New homes under construction in Stewart Creek at Three Sisters Mountain Village on Thursday (April 1). EVAN BUHLER RMO PHOTO

CANMORE – Three Sisters Mountain Village Property Limited is suing the Town of Canmore and all seven members of the previous Town council for $161 million.

In a civil lawsuit filed Friday (Dec. 10) in Court of Queen's Bench in Calgary, Three Sisters Mountain Village Property Limited (TSMVPL) is seeking $150 million due to the build-out of the TSMVPL-owned lands being prevented. The company is also asking for an additional $11 million to cover the cost of putting together the defeated Smith Creek and Three Sisters Village area structure plans (ASPs).

According to the 22-page lawsuit obtained by the Outlook, TSMVPL is alleging council acted in a misfeasance in public office – which essentially means the wrongful exercise of lawful authority – as well as had a negligent misrepresentation. The lawsuit also asserts the decision by the former council is a de facto expropriation of the lands.

“We have worked collaboratively with the Town of Canmore’s planning and administrative personnel over the past seven years to design a holistic vision for development of our lands,” said David Taylor, the president of TSMVPL in a statement. “Our area structure plans for Smith Creek and The Village not only demonstrate commitments to climate change, affordable housing, employee housing and economic diversification, but also far exceed similar applications in any other Alberta municipality.”

The Town of Canmore declined comment since it's an ongoing legal matter.

The lawsuit argues that since the Natural Resources Conservation Board’s (NRCB) 1992 decision, the Town of Canmore has resisted development from multiple ownership groups.

“The extent and degree of that resistance has been unwarranted, unlawful and beyond the legitimate circumscribed interests and entitlement of Canmore,” according to the lawsuit. “At all material times, Canmore and Canmore council understood the paramountcy of the NRCB order and that Canmore was required to take into consideration the interests of all Albertans.

“TSMV has, at all material times, made every reasonable attempt to see that the Three Sisters land is developed in accordance with the objectives set, and approved as determined, by the NRCB. The Three Sisters land is effectively the only remaining developable land within the jurisdiction of Canmore available to meet these objectives, and fulfill the vision of the Bighorn MD, Canmore and the province, in the interests of all Albertans.”

The lawsuit also asks both Smith Creek and Three Sisters Village ASPs be reheard, considered for approval without conditions. The Town and the previous council could also face punitive, aggravated, exemplary damages that they acted in bad faith for $1 million, the legal claim states.

The new legal matter between the Town of Canmore and TSMVPL adds an additional layer to the ongoing legal saga between the two sides that is likely to continue for several years.

The legal filing comes days after the Land and Property Rights Tribunal (LPRT) set the dates for the hearing between the Town of Canmore and TSMVPL to begin Feb. 22, 2022, and run until the end of March.

The LPRT hearing is likely to come to an answer for both parties before the civil lawsuit is heard, but it continues the contentious relationship between the two sides.

A statement of defence by the Town and the previous council has yet to be filed.

The lawsuit claims TSMV worked within the guidelines set by the Town, worked with Town staff and also amended the two ASPs to coexist with the Municipal Development Plan (MDP), the Transportation Plan (ITP) and other council approved guiding documents.

“At every step over the past 30 years, TSMV has adhered to the conditions set out by the NRCB," Taylor said in the statement. "Canmore’s town council, on the other hand, has not, repeatedly and frequently pushing back against the board’s decision and now preventing fair access to all Albertans to one of the most beautiful areas of this province, not to mention a priority area identified by the provincial government as a critical tourism area featured prominently in its economic recovery plans.”

The lawsuit also states neither of the ASPs was ever suggested that they weren’t consistent with the 1992 NRCB order.

“Together, TSMV and Canmore administration came to a consensus about acceptable public and private recreation facilities, implementation strategies, phasing of infrastructure and mitigation works, and the overall consistency of the ASPs with the MDP/ITP. At the conclusion of the hearing, members of Canmore council were given the opportunity to question TSMV. They did; their questions were answered.”

The lawsuit states after the lands were annexed by the Town of Canmore in 1991, the 1992 NRCB decision approved a recreational and tourism program.

“The NRCB order directed that such a project was in the public interest and approved, subject only to limited and narrow terms and conditions upon which Canmore, as the affected municipality, may have input,” the legal claim states. “The NRCB order left only reduced residual planning authority discretion to Canmore, restricted to specific matters.

“The NRCB order compels the support and the approval of Canmore for development proposals of the Three Sisters Land that are consistent with the NRCB order. Notwithstanding, this development has stalled.”

The lawsuit outlines the history of the project, including TSMVPL purchasing the lands in 2013, and attempts to work with the Town in the past eight years. Those include the defeat of the 2017 Resort Centre ASP and more than three years of work on the Three Sisters Village and Smith Creek ASPs, the lawsuit claims.

The legal document argues the Town set the terms of reference in 2018 on which lands were to be proposed for development, but following council’s defeat of both ASPs it was “effectively sterilizing it [the land] from development, and extinguishing opportunity for property use.”

The lawsuit claims Canmore council defeated the Smith Creek ASP prematurely and without fully factoring in the 1992 NRCB order. It also argues the Three Sisters Village ASP met the numerous conditions added to the project such as undermining reconsiderations, the wildlife corridor enhancement and an affordable housing component.

“The defendants’ deliberation on and disposition of the ASPs were taken in bad faith, and render them collectively liable to TSMV for abuse of power of public office, a cause of action also known as misfeasance of public office,” according to the lawsuit.

TSMVPL is arguing the decision is ultra vires, which means an act is taken beyond a person or organization’s legal power.

In addition to this lawsuit and the LPRT hearings, the TSMVPL has also filed for judicial review – which has been granted by the Court of Queen’s Bench ­– but has been adjourned sine die, meaning there’s no timeline for it to be heard.

The development of the lands has been highly contentious and largely opposed by Canmore residents.

A lengthy six-day public hearing in March had nearly 2,200 written and oral submissions, with more than 90 per cent being opposed to the ASPs.

The Smith Creek ASP was unanimously defeated by council at second reading in April, while the Three Sisters Village ASP was voted down 6-1 at third reading in May.

The Smith Creek ASP proposed an estimated population of 2,200 to 4,500 people and would have between 1,000 and 2,150 residential units.

The ASP had upwards of 75,000-square-feet of light industrial and business space and about 125,000-square-feet of retail and commercial space for local services.

Three Sisters Village ASP could lead to between 3,000-5,000 residential units – depending on the bonus density – and between 5,500 and 10,000 visitors and permanent population. There would be up to 602,000-square-feet of retail and business space and about 188,000-square-feet of indoor recreation and entertainment, with 75 hectares of open space and 10 per cent of the housing affordable.

The legal claims have yet to be tested in court.