Saugeen Shores received approval on Friday for a hearing regarding its application to the Superior Court of Justice related to an ongoing disagreement with the developer of a halted beach project in Port Elgin. The hearing is set for July 30 in Walkerton.
The application discussed on Friday focuses on a “specific legal question about how to interpret a written contract,” but it does not address the “substance of the underlying dispute,” according to documents from the Walkerton court office.
On March 2, the town announced that it is looking to end a lease with Cedar Crescent Village, the company behind the proposed beachfront development in Port Elgin, due to missing a key “milestone” deadline, despite extensions granted by the town.
The town’s application seeks a court ruling stating that Article 13, which covers arbitration in the lease agreement, does not pertain to whether a force majeure event occurred under Article 1.1 of the lease, as claimed by the respondent.
Justice Gordon J. Cudjoe from Superior Court has scheduled this hearing and established several deadlines for both parties to submit necessary documents.
The town entered into a lease agreement on December 19, 2019 with Cedar Crescent Village’s developer, 2706913 ONTARIO INC., led by Piergorgio Donnini. The contract was revised on February 10, 2020 and again on February 24, 2025.
A rendering of the proposed Cedar Crescent Village development on Port Elgin’s waterfront. SUPPLIED RENDERING
On February 2, the company responded to the town’s application by issuing a Notice to Arbitrate based on Article 13 of their lease agreement, which includes limited arbitration terms.
The respondent is “seeking clarification on whether a force majeure event,” something outside their control, “occurred under Article 1.1 of the lease that allegedly caused delays in meeting an important deadline.”
However, the town contends that Article 13 only applies to Articles 7, 8 and 11 and does not consent to arbitration over this matter.
The application “raises a discrete question of law concerning the interpretation of a written contract; namely, whether Article 13 of the lease applies to the determination of a force majeure event under Article 1.1 of the lease.”
The town’s filing states that it “does not engage with the merits of the underlying dispute and is strictly focused on whether both parties agreed to arbitrate this issue raised by the respondent.”
In its March 2 announcement, the town explained it had extended several critical deadlines but noted that progress on this project had stalled as required by contractual obligations and failed to meet an important construction milestone set for February 2.
The town indicated it was asserting its rights under both leases and site works agreements including terminating said lease. Since further proceedings will occur through court processes, they chose not to comment further at this time.
In late 2019, Saugeen Shores along with 2706913 Ontario Inc. signed off on a long-term lease aimed at redeveloping waterfront land previously home to attractions like mini train rides and summer markets.
Initial building permits were issued early in 2023. These two-year permit deadlines were extended until February of2025 with an expected completion date set for September14 ,2026.
Donnini shared his thoughts with council back on February24 ,2025 citing reasons for delays such as impacts fromthe COVID-19 pandemic alongside directives fromthe Saugeen Valley Conservation Authority requiring adjustments movingthe development awayfromthe beach area.
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