More than three years after the first store on the Argus Properties Ltd. site opened, the Kelowna, B.C.-based firm has agreed to pay the territory more than $600,000 for infrastructure developed on the property.

The matter was settled by the two parties just prior to it going to an arbitration hearing, Eric Magnuson, who directs the territory's community development branch, said in an interview Wednesday.

Argus bought the former White Pass and Yukon Route property at the bottom of Two Mile Hill.

The city signed a deal with Argus that saw it receive a number of tax incentives in exchange for having the necessary infrastructure installed.

Argus was expected to develop a commercial site with a minimum of two anchor tenants where stores like Wal-Mart, Ricky's All Day Grill, Starbucks, Kia and other such shops now sit.

When the city and Argus couldn't agree on the standards for the infrastructure to be installed, the matter went to mediation.

The Yukon government eventually stepped in with an assignment agreement where it would be responsible for installing the infrastructure. Argus agreed to pay it $705,000 of the $750,000 in territorial money it was paid under the original deal.

When Magnuson took over the file about 1 1/2 years ago, he said he found Argus was delinquent in its payments by a year.

The company had argued initially it wasn't making payments because all the infrastructure that had been anticipated hadn't been installed at the time, Magnuson explained.

He pointed out that some of the infrastructure couldn't be installed at the time because there were no buildings in place then. The territory argued that payment should at least be made on the work that was done and the matter of the deficiencies could be dealt with at a later date.

Argus was not willing to pay on that, he said.

'We had to take action to move it,' Magnuson said.

A preliminary arbitration hearing was held to determine whether it could go to a hearing.

Although the hearing had been set to go ahead on June 4, Magnuson said, the two sides reached the agreement at approximately 4:50 p.m. the previous Thursday, just before the July 1 long weekend.

Argus agreed to pay $669,314.50. That figure is based on $655,000 for the infrastructure work done by the territory and the remaining $4,314.50 for half of a report done on the matter. The money must be paid in 10 days.

Magnuson said both the territory and Argus are splitting the cost of the report, which each side had planned to use in the hearing.

As for how much the territory spent on negotiations to this point, Magnuson said he doesn't have all the figures calculated out. A lot of the expense, however, was in-house, using the territory's lawyers.

He estimated an arbitration hearing would have cost the territory between $40,000 and $50,000.

Magnuson also suggested the negotiations proved beneficial in settling a date for Argus to have the gravel removed from the Burns Road site.

Part of the deal Argus had for developing the site saw it take gravel from a property on Burns Road.

The deal, however, didn't specify when the gravel had to be removed. That date has now been settled at July 31, 2008, giving Argus three construction seasons to use it.

Ted Callahan, Argus' managing director, was unavailable for comment this morning.