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City councillor admits to secret Shindico negotiations

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St. Norbert councillor Justin Swandel announced Wednesday that he'd been in the middle of negotiating a deal with Shindico, which is why he'd earlier opposed taking the company to expropriation.

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St. Norbert councillor Justin Swandel announced Wednesday that he'd been in the middle of negotiating a deal with Shindico, which is why he'd earlier opposed taking the company to expropriation. Photo Store

The Shindico expropriation issue became more muddled Wednesday after St. Norbert councillor Justin Swandel announced on the floor of council he had been secretly negotiating a settlement with the developer that could have avoided the dispute going to expropriation.

The announcement caught many councillors by surprise, and some questioned who authorized Swandel’s involvement in the controversy.

"I was in the middle of negotiating what I thought was a fair deal," Swandel said as he explained why he opposed taking Shindico to expropriation. "I was pretty close to getting a deal done for around $1.5 million."

Council today approved an administrative recommendation to take Shindico to the expropriation process over the firm’s Taylor Avenue land where it built the new #12 fire paramedic station.

The two sides had been negotiating for 14 months — after council squashed a covert land swap the administration had arranged with Shindico, and after construction had already begun on the fire hall.

But while they were close on the price for the land — the city offered a little more than $1 million and Shindico placed the value at $1.2 million — the city would not accept Shindico’s term that it also be paid an additional $844,000 for what it claimed was a loss in value of its adjacent property as a result of the fire station.

Swandel’s announcement was "astonishing," said Coun. Ross Eadie (Mynarski).

"I just heard a concerning issue about somebody negotiating a deal on behalf of the city who I don’t think was appointed through the executive policy committee," Eadie said. "I find that very disconcerting.

"I think some evaluation of how a city councillor is in the middle of negotiating something that has been a hot topic throughout the city for the last two years."

"I don’t understand why a member of council is off doing a separate negotiation and what process that is," Coun. Jenny Gerbasi said. "One member of council can go off and be negotiating — our staff should be negotiating."

The Taylor fire hall was one of four new halls Shindico was contracted to build as part of a troubled program that was several million dollars over budget. City officials mismanaged the fire hall project, which was also plagued by unfair contract awards to Shindico, according to a team of forensic auditors from consulting firm Ernst & Young.

Shindico has disputed the E & Y findings, arguing that the firm offered the city the lowest possible price. Shindico declined to comment on its negotiations with Swandel.

Swandel’s involvement in the negotiations is even more surprising given he is the only member of council who publicly disputed the findings of the E&Y audit and repeatedly defended the actions of the administration throughout the whole process.

Shindico had originally offered the Taylor property to the city in 2010 for $900,000 but withdrew the cash offer and stated it preferred a land swap, which the administration agreed to until council found out about it in August 2012 and stopped it.

Coun. Jeff Browaty, who chairs the property and development committee which is responsible for the Shindico issue, said he was unaware that Swandel had been negotiating with Shindico.

"I was surprised," by Swandel’s actions, Browaty said. "I didn’t know he was doing this.

"Given the sensitivity of the issue, I wouldn’t have gone there."

Browaty said Swandel wasn’t negotiating a purchase of the Taylor land but terms for a 30-year lease, which he wasn’t prepared to support.

The only member of council who said he wasn’t surprised by Swandel’s admission was Mayor Sam Katz, who claimed several councillors were aware of what Swandel was doing.

Katz said Swandel approached Shindico only after the administration said talked had broken down, adding that Swandel wasn’t negotiating with the developer but only talking to them.

"He was discussing if there were other options that we could come to some satisfactory agreement, as opposed to the expropriation," Katz told reporters following the council meeting.

Katz said it was Browaty who decided to support the administration’s recommendation for expropriation and bring the matter to council.

Katz said he agreed with Swandel’s assertion that the expropriation process could eventually cost the city $3 million, adding he hoped both sides can still negotiate a settlement.

 aldo.santin@freepress.mb.ca

Is Justin Swandel's secret negotiations an example of problem-solving or a sign of deeper problems at city hall? Join the conversation in the comments below. 

History

Updated on Wednesday, February 26, 2014 at 7:08 PM CST: Update after Shindico declined to comment on negotiations.

1:37 AM: adds conversation question and tag

February 27, 2014 at 8:48 AM: Corrects typo.

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