Rejected developments spur $161M lawsuit against Town of Canmore

Three Sisters Mountain Village Property Limited is suing the Town of Canmore and all members of its previous town council in a $161-million civil lawsuit filed last Friday in Court of Queen's Bench in Calgary.

The company says it's seeking $150 million in damages due to Canmore refusing to allow the company to move forward with a development project on land it has owned since 2013.

They are also asking for another $11 million to cover the costs of putting together the defeated Smith Creek and Three Sisters Village area structure plans (ASP) between 2017 and 2021.

Alternatively, the company wants a rehearing of the Smith Creek and Three Sisters Village plans by Canmore's town council, with consideration of immediate approval without conditions.

The contentious development plans, which could have doubled Canmore's population by creating thousands of units for residents and tourists, as well as hotel rooms, were rejected in April and May of this year, respectively.

The project — worked on by Three Sisters Mountain Village Property Ltd. (TSMV) from 2013 to 2021 — raised concerns about the impacts on wildlife, affordable housing and property taxes from councillors and hundreds of Canmore residents.

The 22-page lawsuit obtained by CBC News alleges the rejection of the area structure plans was conducted in a manner that amounted to an abuse of the power of public office — a cause of action known as misfeasance of public office.

"The defendants knew, or ought to have known, that the dispositions of the Village ASP and Smith Creek ASP in this way would probably, or be likely to, cause significant injury and damage [to] TSMV, and in fact such dispositions have done so."

The Town of Canmore and its former council members are also being sued for negligent misrepresentation and "de facto expropriation" of the lands, which is essentially when the town places restrictions on the use of land without acquiring the property.

The lawsuit also states that the Town of Canmore and former council members may face punitive, aggravated exemplary damages of $1 million for acting in bad faith.

Several of the council members who were on council when the plans were rejected were replaced in the October municipal election.

Approved by NRCB in 1992

According to the document, the Natural Resources Conservation Board (NRCB) approved a recreational and tourism project in Canmore in 1992, subject "only to limited and narrow terms and conditions upon which Canmore, as the affected municipality, may have input."

Despite this, the document claims the development of that project has been stalled for nearly 30 years.

"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 claims that when the Smith Creek and Three Sisters Village area structure plans were rejected last spring, the company was prevented from proceeding with the NCRB-approved project, rendering it "virtually impossible, unfeasible and uneconomic to develop the Three Sisters Land."

"TSMV withdrew, and re-engaged over a three-year period with Canmore administration, and returned in 2021 with proposals in compliance with Canmore council's direction," said the lawsuit.

Conditions added to the Three Sisters Village area structure plan include a wildlife corridor enhancement and affordable housing component. Those requests were amended but the area structure plan was still denied.

It also argues that company made every reasonable attempt to work in accordance with objectives set by the NRCB, as well as conditions added to the Three Sisters Village area structure plan by the town, including a wildlife corridor enhancement and affordable housing component.

"Given the extensive work, efforts and co-ordination with Canmore administration, and regular public communication with Canmore council, TSMV understandably and reasonably expected that its applications would be approved by Canmore council."

CBC News reached out to the Town of Canmore, as well as the company, who declined to comment.

"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," said David Taylor, president of Three Sisters Mountain Village Property Ltd., in a statement.

The legal claims have yet to be tested in court.