The city is giving up its two most valuable pieces of land in voting to ratify a memorandum of understanding with the territorial government for the construction of the 2007 Canada Winter Games' athletes' village, says Coun. Doug Graham.

Graham was the only councillor to vote against the MOU Monday evening.

It will see the city sell two lots at the former Motorways trucking yard to the government (YTG) with the funds approximately $2 million going toward the construction of the athletes' village for the national event.

Under the agreement, the territory would provide financing and human resources to the Games' host society to plan, and design and manage the construction of the village, which would be built at or near the Yukon College site.

The city would write off property taxes on the permanent structures set to serve as seniors' and student housing for 10 years or to a maximum of $2.5 million, and cover all permits and fees for the village, a value estimated at $150,000.

Graham argued the city will not only be getting rid of the two most valuable pieces of property on the waterfront, but also sell them for less than their value.

'We will not, after we sell them, have any real say or control,' Graham said through a conference call into last night's meeting.

At an earlier meeting, city manager Bill Newell explained the $3.1 million the land was originally valued at was for the properties with municipal services, rather than the $2-million value with no services.

Coun. Dave Stockdale also pointed to a condition of the MOU that the property must 'be developed in a manner consistent with the City of Whitehorse zoning bylaw, waterfront plan, waterfront design guidelines and with similar conditions to the purchase/sale agreement between the city and Yukon...'

The city will have some control over what is developed on the waterfront lots, he said.

There can also be control over the waterfront through the development permit process, Coun. Dave Austin said.

Graham, a member of the host society himself, also said he's never seen a recommendation from the society's housing committee or the society itself asking for or recommending the deal.

'I have never seen anything from the host society to council saying, Look, we believe this is the best course of action because there's insufficient funds,'' Graham said.

'I don't know if the housing committee has reviewed all the proposals that they've received as a result of their invitation to tender.'

As Newell said later in the meeting though, the proposal came to the city from the territory after the host society asked it for assistance in funding the village.

The territory then approached the city for support.

Council is not fulfilling its responsibility if it spends taxpayers' money without even a design concept for review, Graham suggested.

'We're committing a great deal of taxpayers' money to a project that we don't know the slightest bit of information about,' he said. 'And that's not a responsible decision that we should be making.'

Graham believes there weren't enough alternatives considered.

'I wonder sometimes if this decision to go with YTG hadn't been made long in advance of this and this is just the follow-up to a decision that was made sometime ago,' he said.

The administrative report to council points out that while the host society reviewed other options, the most basic would have been to rent mobile units that would be trucked up from Alberta and sent back following the Games, at a cost of $14 million.

Another option would see units built and resold after the Games. That would leave no lasting legacy, and with no guaranteed sales contracts after the event, could be a liability the host society couldn't absorb.

Though the administrative report stated the deal wouldn't impact the city's budgets, Graham believes it will.

The city is committing several million dollars for capital projects that don't fall under its five-year plan, he said.

Under the MOU, the city would put two applications into the federal Municipal Rural Infrastructure Fund: the first for an extension to Hamilton Boulevard and the second for improved infrastructure in the Takhini North subdivision.

If those projects are approved, the city would pay a third of the capital costs of the projects, up to $3.5 million for Hamilton Boulevard and $2.7 million for Takhini North, with both to be completed by 2008.

That brought Graham to the last issue he has with the deal.

'And that's what I see is predetermination of the distribution of the Municipal Rural Infrastructure Fund (MRIF),' Graham said. 'And I just think that's wrong.'

If the money is approved, the councillor suggested another community in the territory may not be able to get funding under the MRIF program.

Graham said that informally, there's a committment the city will not apply for the funding until other communities in the territory have had a chance to do so.

The decision by council last night on the agreement could impact upcoming discussions on how the federal gas tax revenue coming to municipalities will be distributed throughout the territory, Graham suggested.

He also said one project could be approved and the other denied by Ottawa, which would not do the city well 'at all.'

Coun. Bev Buckway said she had concerns surrounding the MRIF as well, describing it as 'the most unsettling part of this'. She also pointed to an informal agreement with the communities that Whitehorse wouldn't be 'right up to the trough first.

'I think we've come up with a compromise,' Buckway said before voting in favour of it. 'I can't say I totally like it, but I guess when you have a compromise, you give up some things to get other things, and in this case, we're going to get an athletes' village that we need.'

Austin said the application for federal funding can be made down the road after other communities have a chance to apply, with the completion of the project not proposed until 2008.

Mayor Ernie Bourassa pointed out the total MRI fund is $32 million to be doled out over the next four years.

'These two projects are about $12 million, so there would still be $20 million available to the communities in the Yukon,' he said. 'And I do not recall any discussion here at council regarding the City of Whitehorse not submitting in applications for (MRI) funding.'

If an application is made, the projects wouldn't occur until 2007 at the earliest. It's not like the city would be preventing other communities from accessing MRI funding earlier, he said.

A year ago, council members agreed the city would seek funds for the Takhini North project, the mayor added. He argued the MOU will be good for the city.

'While it's not the best deal possible, we are going to get an athletes' village,' he said.

Stockdale said the territory has come through for the city in recent months when assistance was needed on the cost overruns of the multiplex, for example.

Although he said Graham had some good points, he also pointed out there is a time factor that has to be considered.

'Time's always a problem when you make your decisions in a hurry, but this decision has to be made, and I am comfortable supporting this memorandum,' he said.

While Coun. Jan Stick, who was just elected in a byelection, admitted she wasn't well-versed in the background of the issue, she supported the agreement.

'I'm pleased to see some different housing options,' she said.

Mike Barnes is among the six contractors who submitted proposals for the village last November and has been waiting to hear what the host society is doing with them.

He said he'll be building the structures he had proposed regardless of whether he's awarded the contract for the village.

'It's still a mystery,' he said in an interview last week of what is happening with the village.

Barnes proposed building 30 modular units that would be 36 feet wide by 48 feet long with two stories, which could be fully disassembled.

Barnes would not say what his idea would cost. He did say the units can be cost-effective because approximately four 16- by 48-feet-wide trailers, which were outlined as the type of building for the village, is equal to one of his structures.

The call for proposals asked contractors to look at whether there would be anyone interested in purchasing the units. At the time, Barnes said there were 17 that signed on as interested in the structures.

Since then, that number has grown to a full 30, though Barnes said an expression of interest doesn't guarantee a sale. He expects about half of those who are interested will buy the buildings.

He also pointed out that the modular units he builds don't require the cost of hiring a pilot car because of the way they're disassembled.

Trying to get information on where the host society is in awarding a contract has proved difficult for the contractor who, as of last week, could only find out that there was an agreement being considered for funding the village.

A report on the proposal review for the athletes' village, provided by Games manager Chris Morrissey last week, states six proposals came in, with four meeting the technical requirements. Those came from ATCO Structures, Paddlewheeler Industries, 39700 Yukon Inc. and 34930 Yukon Inc.

Price envelopes were opened for the four that met the technical standards, though Morrissey refused to reveal the costs until after the exact details of the village have been decided.

In an interview this morning, he said with council approving the MOU, the host society and government will work on coming up with a capital funding agreement.

'It's great news; we'll be able to move forward,' he said.

The capital funding agreement will outline what the project will look like details like how many permanent and how many modular units will be built, as well as what the salary will be for the athletes' village project manager.

Within the next two weeks, Morrissey is hopeful the capital funding agreement will be complete, with the hiring of the project manager beginning.

From there, work will be done on finding a contractor for the work.

'Upon completion of a funding agreement, further discussions may take place with the highest ranked proponent(s) for the fabrication of some of the space required for the village,' reads the report on the proposal review.

Morrissey would like to see site work get underway this spring and early summer, with construction of the buildings in the summer.