A developer constructing a country residential subdivision next to the Meadow Lakes golf course feels his profit should not have been a consideration in the sale of public property into private hands.

Jeff Luehmann, who co-owns the Meadow Lakes Golf and Country Club, told the Star this morning he doesn't feel the sale price of the 23.6 hectares of land next to his course should have been based on country residential zoning.

'It should have been based on raw land value,' he said.

Luehmann signed an agreement with the Yukon government last week for a final sale price of $454,000.

The sale price, according to the agreement, included:

$15,000 per lot for the 26 half-hectare country residential lots of approximately 0.5 hectares in size;

$13,000 for approximately five hectares of commercial recreation land amalgamated with the golf course;

$15,000 for greenbelt access ways; and

$36,000 for the land the access road will be on.

Luehmann said he'll be selling the lots for about $160,000 each, including water wells on each property and power to the lots.

He said he's also being charged for Alaska Highway improvements to the area but is not sure exactly what will be required and how much that will cost.

'It looks like we're going to have to have a left-hand turning lane as well as an acceleration and deceleration lane.'

Luehmann said he felt an appraisal he had done on the land, which came in at $117,000 based on raw land values, more accurately reflects the cost of the land.

Luehmann said a government appraisal on the land, done by North Country Appraisals out of Kelowna, B.C., was never provided to him and gave him no room to negotiate the sale price.

He said he isn't sure why he was never provided with a copy of the appraisal and was denied a copy from the government. When he called the Kelowna company, he said, he was told it had been instructed by the Yukon government not to provide him with the information.

'Why wouldn't they give it to me? On the sale price, they just said, take it or leave it.' '

North Country Appraisals did not return several phone calls from the Star. The information has since been requested under the Yukon Access to Information and Protection of Privacy Act.

A Feb. 7 letter from Yukon lands branch director Lyle Henderson to Luehmann said the price was arrived at using an appraisal method called the subdivision development approach, and that the government's sale price was non-negotiable.

'Given the uniqueness of factors associated with the leasehold area and obvious non-availablity of comparable sales, we wish to convey that the subdivision development approach' was used as the basis for determining a market sale price,' says Henderson's letter.

'This is an accepted industry standard for valuing private development projects and requires certainty of a final subdivision plan along with appraiser estimates for development costs and projected sales. The market sale price per the above appraisal approach is determined to be $454,000.

'The lands branch is prepared to complete a sale of the leased lands based on the above non-negotiable market value.' This offer remains open for acceptance until noon of Monday, March 12, 2007.'

Luehmann said he'd like to know if the money he's been charged for the land will be taken into consideration when the government releases 52 of its Whitehorse Copper country residential subdivision lots onto the market later this year.

'It works out to be about $13,000 an acre. Is the government going to put the same value on lands when they develop their own lots?' he asked.

'It's public land, so they should be trying to get the best value for their money. It shouldn't just be the cost of infrastructure,' he said.

'Are they treating the private sector with different rules? That's what I would like to know.'

Last year, Department of Community Services officials said the price of the lots at Whitehorse Copper was expected to vary between $80,000 and $100,000 each.

The average lot size in Whitehorse Copper is larger than Luehmann's but the parcels do not include water or power.

Energy, Mines and Resources spokesperson Ron Billingham said this morning it would be difficult to compare the Whitehorse Copper subdivision to Luehmann's development because they are very different.

Billingham said he would have to look into whether the government will be including the value of the land along with the cost of development in coming up with sale prices for Whitehorse Copper.

In an interview Thursday, Billingham said while he could provide a summary of North Country's appraisal on Luehmann's 23.6 hectares of land, he is not able to release details of the appraisal itself at this time because it includes sensitive information about Luehmann's business affairs.

Energy, Mines and Resources did release the summary page of North Country's appraisal, which stated that the value of Luehmann's land is between $297,000 and $479,000.

The price, the summary stated, is dependent on certain scenarios.

Billingham said his office was awaiting word from the Privacy Commissioner as to what could and could not be released from North Country's appraisal.

Henderson said Thursday the $454,000 figure was arrived at using a subdivison development approach, an accepted appraisal process recognized by the Appraisal Institute of Canada (AIC).

'In this situation there is an industry model out there for proposed development projects and it's a standard model used across Canada and across the States and it's called the subdivision development approach model,' Henderson said.

'Essentially it takes into account bare land situations where there's nothing on the ground yet but something is about to happen, something is proposed. What is the highest value for the owner, whether it's Yukon government or someone else.

'To close on what this model is all about, it's not complicated. It is forecasted sales revenues from sale price, then what's a reasonable estimate based on that approved design for development costs. Development costs include construction costs, legal survey, project management, hydro, telephone, septic, then you take the difference between the two.'

According to the AIC, a subdivision development method has several steps, including:

determining the highest and best use of the land;

affirming the subdivison development plan;

determining the cost and timing for approvals and development;

forecasting a realistic pricing schedule;

projecting community market growth;

estimating the phasing of land development and related expenses;

estimating the annual real estate taxes; and

including overhead and a developer's profit allowance.

Henderson said the value of the land sold to Leuhmann took into account the country residential zoning and that each lot was deemed to be worth just over $100,000.

'This valuation looks at what has been approved by the planning authority, the City of Whitehorse. You can't do evaluation on this model until you're sure what can be put there.

'Once that's certain, then an estimate is done on what is the forecasted sale proceeds on the lots. This approach used $110,000 per lot. And that was validated by us as a lands branch working with our own appraisal people working within YTG, that was deemed to be OK.

'Mr. Luehmann is advertising $140,000 or $160,000; that's not a concern to us, that's his business.'

Henderson said while the appraisal was commissioned to give an arm's length opinion on the price of the land and to give Luehmann an independent document to view should he want to contest the sale price, the North Country appraisal wasn't given to Luehmann due to zoning changes his plan underwent while going through city zoning processes.

Billingham said this morning the Feb. 7 letter Luehmann was sent gave him until March 12 to consider the offer but he never challenged it.

During the zoning process with the city, Luehmann's plan went from 27 country residential lots with two commercial properties to 26 country residential lots with the two commercial lots being amalgamated with the golf course.

Henderson said the North Country appraisal was re-examined and the final sale price developed once the city had signed off with zoning approval for the revised subdivision plans.

Henderson said while he isn't able to provide the North Country appraisal details, scenarios mentioned in the Kelowna company's report took into account profit and risk assessments.

He said the scenarios ranged on sales proceeds and development costs. 'The three ranges are slightly different on range on risk and profit percentages. That's it; that's all it is. That's what allows for the lower figure of $297,000 and the higher figure of $479,000.'

Henderson said the subdivision development approach was used as there were few if any comparisons that could be made with respect to private land development of country residential lots in the territory.

The Pineridge development done in the late 1980s and early 1990s, he added, was dated and was difficult to compare.

In 1993, the 34-hectare Pineridge development area was purchased by the city from the Yukon government, then sold to developer Brad Taylor for $201,000 $5,912 per hectare.