A multimillion-dollar deal has been reached between the Yukon government and the City of Whitehorse to finance the construction of the athletes' village for the 2007 Canada Winter Games.

Premier Dennis Fentie and Mayor Ernie Bourassa were scheduled to officially sign off the memorandum of understanding at 2:30 p.m. today.

A copy of the agreement obtained by the Star says the Yukon government will commit up to $20 million in financing for the village in exchange for a reciprocal commitment from the city of $8.2 million-plus.

Under the terms, the city will forgive up to $2.5 million in property taxes over 10 years on any permanent structures built at Yukon College to serve as village facilities.

The city also commits to secure funding approval under the federal Municipal Rural Infrastructure Fund to cover the cost of extending Hamilton Boulevard to meet with Robert Service Way in 2008.

The city also agrees to come up with its one-third share of the Hamilton Boulevard project as required by the infrastructure fund, to a maximum of $3.5 million.

Similarly, city hall has agreed to apply to the infrastructure fund for improvements to the Takhini North subdivision, with a maximum one-third contribution from city of $2.7 million.

The city has also agreed to write off any permit fees for the project, estimated at $150,000.

As well, the city has agreed to sell 1.3 hectares of the old Motorways trucking property to the Yukon government for $2 million. The $2 million, however, is to be donated to the host society for construction of the athletes' village.

The agreement says if the cost of the village is less than $12 million, one-half of the difference between the final cost and the $12-million mark will be deducted from the government's annual contribution to the city. (For example, if the final cost of the village is $10 million, the difference is $2 million, half of which will be deducted from the annual contribution.)

The host society has yet to announce a design for the village. There was talk, however, about building the village in such a manner that sections could be removed and relocated for permanent use in other areas of the territory.

The memorandum of understanding, though, refers to the development of permanent structures.

Host society president Piers McDonald explained in an interview late last month that several options were being discussed for an athletes' village somewhere in the area of 100,000 square feet.

Each option calls for construction to begin this year somewhere on the college grounds, McDonald said.

The games are scheduled to run Feb. 24-March 10, 2007. An estimated 3,600 athletes, coaches and managers will use the village facilities, with approximately 1,800 in the first week and 1,800 for the second week.

One of the sites being talked about is the large open area directly behind the Yukon Arts Centre.

The memorandum notes the territorial government has already committed $27 million toward Games-related initiatives.

With the additional $20 million for the village, as well as the $2 million to buy a piece of the ex-Motorways property, the government's commitment to the 2007 Games now stands at $49.8 million, the agreement points out.