Moncton will pay $455,000 to end a controversial parking deal which will allow a new development to be built on a prime piece of downtown real estate.

Coun. Brian Hicks raised concerns in February that a 10-year deal to give 385 free parking spaces to a Toronto developer could turn into a 50-year arrangement.

Last week, Hicks negotiated a solution that will have the city pay $455,000 to the developer, who will now build in the area. Hicks won't say what the developer will build but he feels it's going to be an exciting project.

"I, and council, know of Plan A and Plan B, both [are] extremely exciting. The fact is something finally is going to be built on these lands, which were acquired in 1998 by the city," Hicks said.

"The fact is once buildings go up, the parking spaces used for Roger's will disappear and parking infrastructure will be needed."

The arrangement is with a company called Generation Place, which is a partnership between Moncton's Ashford Properties and Toronto's Verdiroc.

The free parking lot currently offers spaces to employees at the Rogers call centre in downtown Moncton.

Hicks warned in February that if the deal turned into a 50-year free parking contract, the city could lose $42 million in parking revenue.

The councillor’s concerns over the parking deal caused his counterparts to begin questioning the arrangement.

Coun. Kathryn Barnes said councillors were surprised to learn about the fine print in the deal, particularly how it could become a 50-year contract.

"I, like Coun. Hicks, was steadfast in my belief that we had a 10-year parking agreement," she said.

Discussion over development on the downtown parking lot is not entirely new.

In 2005, the developer agreed to build a hotel and an apartment building on the property.

However, the promised construction never materialized.

Mayor George LeBlanc said the property was turning into a legal nightmare.

"One of the most difficult things we were faced with was trying to unravel this knot," he said.