British ColumbiaThe City of Terrace has won a legal battle after a developer sued to try and keep a $6.18-million construction deposit — despite failing to meet project deadlines. City of Terrace allowed to keep construction deposit after developer Taisheng fails to meet deadlinesHanna Petersen · CBC News · Posted: Oct 31, 2025 9:00 AM EDT | Last Updated: 5 hours agoListen to this articleEstimated 4 minutesThe Skeena Industrial Development Park is a joint venture and revenue-sharing partnership between the City of Terrace and the Kitselas First Nation. It was the subject of a recent court battle between a developer and the city, with a judge ultimately finding in the city’s favour. (City of Terrace)The B.C. Supreme Court has ordered a company to return a $6.18-million construction deposit to the City of Terrace after it failed to meet project deadlines. B.C. Supreme Court Justice Mark Underhill has dismissed a lawsuit filed by Taisheng International Investments Services Inc., which sued the City of Terrace for the deposit related to the construction of a new industrial park south of the city airport.Taisheng argued it was contractually allowed to keep the construction deposit, despite not developing a groundwater system for the park, which is a joint venture between Terrace and the Kitselas First Nation and has been in the works since 2014. But in his ruling, Underhill said that Taisheng is not entitled to the return of the deposit after deadlines weren’t met, and “to find otherwise would result in Taisheng receiving a $6.18 million windfall.”Taisheng is a B.C.-based company that, until 2023, was a subsidiary of a Chinese state-owned asset management company. CBC News has reached out to their lawyers for this story, but did not immediately hear back.Groundwater system Taisheng and the City of Terrace first entered an agreement in July 2014 for the purchase, sale and development of certain portions of the Skeena Industrial Development Park — an area of undeveloped lands located south of the Northwest Terrace Regional Airport The company agreed to construct a groundwater system for the development. The proposed Skeena Industrial Development Park is located near the airport in Terrace, B.C. (City of Terrace)Under the agreement, if Taisheng completed the project, Terrace would reimburse Taisheng for the $6.18-million deposit.Taisheng, however, would then be solely responsible for any additional construction costs in excess of the deposit.The company also agreed to grant the city an option to repurchase the land if it failed to meet development milestones.In 2019, Taisheng said it could not find a groundwater source on the land that met the requirements for the development — so it agreed with the City of Terrace that it would source water from wells on adjacent land owned by the province. But Underhill said that little work was done on the groundwater system outside of a technical report prepared by Allnorth Engineering and Constructing. That report found the cost of the groundwater system would exceed $14 million, and the deposit would only fund the first stage of construction. With the project stalled, Terrace decided to buy back the land on Oct. 15, 2021, given no significant development had been undertaken by Taisheng. However, Taisheng refused to transfer the lands, resulting in arbitration which the company lost.The land was ultimately transferred to the city on Oct. 4, 2023, for just over $3.09 million.’Years behind schedule’ The City of Terrace said it wishes to retain the construction deposit and use it to fund the construction of a groundwater system, while it markets the land and searches for a new developer for the project. In his judgement Underhill said there is no basis for concluding that Terrace acted in bad faith or breached any duty of honesty. “At the time that Terrace exercised the option to purchase, it was left with a development that is now years behind schedule, all of the costs associated with that delay, and the burden of an additional $8 million of construction costs to complete the groundwater system,” wrote Underhill. The City of Terrace said that it recognizes there is a 30-day period in which the company may seek to appeal the ruling. ABOUT THE AUTHORHanna Petersen is a reporter for CBC News, working out of the Prince George, B.C., bureau. You can email her at hanna.petersen@cbc.ca.
Northern B.C. city wins $6.18-million fight against developer
