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A jogger makes her way past signs informing people of various locations along Stanley Park's seawall in Vancouver, British Columbia, Wednesday, July 11, 2012.Rafal Gerszak/The Globe and Mail

A Vancouver float-plane company has withdrawn a proposal to move some of its terminal buildings off a downtown seawall, dashing hopes that an obstructed pathway would be cleared for bikers and pedestrians.

But despite that setback, city officials hope there's still a way to clear the route.

"We are continuing to work closely with Harbour Air, PavCo and the provincial government on this file," city manager Penny Ballem said Monday in an e-mail provided by staff.

"We are very hopeful there will be a resolution to this matter very shortly. The seawall completion is on track and will be completed in the planned timeframe."

Ms. Ballem did not specify a timeframe but the city's current agreement with Harbour Air for use of its waterfront site runs out in September.

The stretch of seawall in question – between downtown and Stanley Park – is tied up in a wrangle that involves Vancouver-based Harbour Air, city and provincial governments and the owners of Vancouver Harbour Flight Centre.

Opened last year, VHFC was supposed to be the new base for an estimated 300,000 float-plane passengers that fly in and out of downtown every year. It is a $22-million float-plane terminal on the same strip of waterfront as the seawall. But Harbour Air, the biggest float-plane operator in the province, has refused to move in to the new facility, citing safety concerns. VHFC maintains those concerns are unfounded.

The two sides have also clashed over money, with Harbour Air balking at rental fees to use the new terminal. The dispute is now in court.

The provincial government is involved through Crown-owned B.C. Pavilion Corp., which runs the convention centre where VHFC is located. The city, meanwhile, is in charge of the development permit process that has allowed Harbour Air to operate from its current base since 2004. Harbour Air was bumped from its former home that year to make room for convention centre expansion.

In June, consultants for Harbour Air filed a development application that would have moved some buildings off the water's edge to allow the seawall to be completed.

That application was withdrawn in early July.

Harbour Air chief executive officer Greg McDougall on Monday would not say why the application had been withdrawn but said parties in the dispute had been negotiating over the summer with an eye to resolving the impasse.

VHFC president Paul McElligott was not immediately available for comment.

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