One of the largest mixed-use projects in Saanich history has been halted indefinitely over an impasse between the developer and its anchor tenant at the University Heights Shopping Centre.

Wesbild president and CEO Kevin Layden, whose company has spent more than three years planning a $230-million residential and commercial redevelopment of the shopping centre lands at Shelbourne Street and McKenzie Avenue, confirmed Wednesday that expansion and financial demands from The Home Depot have led to work on the project being put “on pause.”

Both sides acknowledge that The Home Depot’s existing lease prevents construction of buildings on a portion of the site. In exchange for allowing that to happen, the developer says, The Home Depot tendered an offer asking for a 10,000-square-foot expansion, plus $5 million in compensation and other concessions. The store has 14 years remaining on its current lease.

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While Layden was still holding out hope for a negotiated compromise, he said the scale of The Home Depot’s offer “affects the viability of the project.”

“We are disappointed, and we know the people of Saanich and Greater Victoria will be disappointed,” Layden said in a statement. “We do not take this action lightly. But we cannot move forward with unreasonable requests. This project will address the region’s top priorities including affordability, rental accommodation and the dire need for additional daycare spaces.”

The redevelopment calls for 598 permanent rental homes, 60 affordable rental suites, an up to 11,000-square foot daycare, cycling infrastructure, a public plaza, community spaces, B.C. Transit hub, electric vehicle charging infrastructure and modern commercial spaces.

The project has not yet gone to public hearing but has received first and second readings by Saanich council. Construction was anticipated to begin in the spring of 2021 with occupancy in 2024.

Alyssa Haw, PR and communications manager for The Home Depot Canada, said the company does not typically discuss ongoing negotiations, but noted the company “has been in good faith discussions with the developer since 2017 regarding this development.”

Saanich Mayor Fred Haynes did not sound optimistic, calling the stalemate a “very, very unfortunate situation.”

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The Home Depot’s offer, when it was made, “came as a complete surprise to everyone,” he said, adding that it proves the company is “playing hardball.”

Wesbild is asking all of its Victoria planning and construction teams to pause all development activities for the project. The District of Saanich has reassigned staff attached full-time to this major project to other duties.

Layden stated that the community has worked hard together to help shape the project.

“For many years, the people of Saanich have been generous with their time and care in helping create a sustainable project that addresses the needs of the community. It is our sincere hope that this valuable project can continue.” he said.

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