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WINNIPEG — Canadian National Railway will have to head back to the drawing board, CBC News reported.

The rail company wants to build 120 homes on a strip of land running through Winnipeg’s River Heights neighbourhood, but a city committee decided not to re-zone the land.

CN spokesperson Jim Feeney says CN has spent a lot of time and money to come up with a plan that would satisfy the residents.

He says the company has been trying to develop the land since the rail line was torn out two years ago – and last night’s decision leaves them in a difficult position: “We’re left between a rock and a hard place now. The city has told us it doesn’t want to buy the land, and last night it told us it doesn’t want us to develop it, either.”

Feeney says the rail company cannot present another proposal to the city for at least a year. In the meantime, it’s paying property taxes on land it can’t develop.

While CN considers its options, area residents say they’re thrilled with the decision. Winn Adare is a real estate agent, and chairperson of the River Heights Urban Trail Coalition.

She says CN’s in-fill housing proposal was bad from the very beginning. “The logistics are too difficult: how are you going to put in a sewer system? How are you going to extend that street? You can’t add onto the back lane. You’d have to re-build that street. It didn’t seem cost-effective.”

Adare says she hopes the city will change its mind about buying the land, because her committee is already fundraising to build a bicycle and walking trail there.