Fredericton Council Moves Exhibition Grounds Compensation Dispute to Arbitration

City and N.B. Ex Fail to Reach Compensation Agreement

The City of Fredericton is moving forward with arbitration to resolve a dispute over compensation for the expropriation of leasehold interests in the Exhibition Grounds. This step comes after both the city and Fredericton Exhibition Limited (N.B. Ex) were unable to settle on a payment amount following months of negotiations.

Council Vote Formalizes Shift to Legal Settlement

During a council meeting held Monday night, Fredericton's chief administrative officer, Steve Hart, explained that the decision to pursue arbitration was an "administrative and procedural" measure. He noted that this move does not impact the already completed expropriation process and will focus solely on determining a fair compensation figure.

Background: Expropriation and Redevelopment of Exhibition Grounds

The city owns the Exhibition Grounds, with N.B. Ex having leased a portion until 2031. Earlier this year, Fredericton completed expropriation of N.B. Ex’s leasehold interest, acquiring full control over the property as part of a larger redevelopment initiative. A 4.9-hectare parcel has already been sold to the province for $7.7 million to build a new middle school, with construction scheduled to begin in the spring.

Negotiations and the $4.1 Million Offer

In May, Fredericton council voted to offer N.B. Ex $4.1 million as compensation for the expropriated leasehold interest. However, the two sides have not been able to reach an agreement, with N.B. Ex expressing dissatisfaction with the proposed amount. As of August, N.B. Ex director Rae Tretiak described the city's offer as “definitely not a fair number.” Negotiations continued since then, but a settlement has remained out of reach.

Next Steps: Arbitration and Possible Settlement

Now that negotiations have stalled, a court will arbitrate to determine the compensation N.B. Ex should receive. Hart emphasized that the city can withdraw from the arbitration at any point if both parties arrive at an out-of-court settlement. The arbitration process could take six to 18 months, depending on the court’s timelines.

Other tenants remain active on the grounds, including a Tim Hortons, William’s Seafood restaurant, and Feeds'n Needs. The city has allowed N.B. Ex to stay on part of the grounds through December and is negotiating a two-year lease extension for Feeds'n Needs.

Ongoing Discussions and Outlook

Hart clarified that moving to arbitration should not be interpreted as an escalation, reiterating that open dialogue between the parties is ongoing. “I'm still hopeful that we can avoid arbitration by achieving a settlement agreement with the N.B. Ex.,” he said. The broader redevelopment project at the Exhibition Grounds continues while the compensation dispute proceeds through legal channels.

Source: cbc.ca.