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Audit on real estate division

Fire-hall land-swap controversy snowballs into five-year review

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After a month of raising questions about Winnipeg's contentious fire-hall land swap -- and not receiving satisfactory answers -- angry and disillusioned city councillors decided to place the city's real estate division under a microscope.

On Thursday, council voted unanimously to launch an external audit of major city real-estate transactions going back at least five years, and possibly longer, as part of what elected officials say is an effort to restore public confidence in city hall.

The brainchild of Fort Rouge Coun. Jenny Gerbasi calls for all major city land acquisitions, sales, transfers, leases, policies and procedures to be reviewed. But it will be up to city auditor Brian Whiteside to determine the precise scope.

The impetus for the review is the proposed swap of two old fire halls and a parcel of Fort Rouge land for the Shindico Realty-owned site of the new fire-paramedic station No. 12. But during an hour-long debate, councillors also complained about the Parker land swap in 2009, the premature listing of the Winnipeg Square Parkade, the aborted sale of a downtown surface lot known as Parcel Four and the uncertain status of the Public Safety Building.

"The reputation of the city is affected when there is public concern and doubt," said Gerbasi, who raised the idea of a real estate audit in April, during the debate over the sale of Parcel Four. "I guess it kind of just reached the point where people agreed we had to get to the bottom of the way things are done in the city and make sure they're done fairly going forward."

It's rare for councillors who do not sit on executive policy committee to see a motion endorsed by council as a whole. But on Thursday, even EPC councillors such as finance chairman Scott Fielding (St. James-Brooklands) and Paula Havixbeck (Charleswood-Tuxedo) said they have heard from constituents who are unhappy with the fire-hall land swap.

St. Norbert Coun. Justin Swandel, who had not commented publicly about the land swap before Thursday, said he is certain something went wrong with the plan, even though he does not believe any city official intentionally did anything wrong.

Transcona Coun. Russ Wyatt said citizens can't wrap their brains around the fact the city built a fire-paramedic station on private land. Mayor Sam Katz suggested he is troubled by initial claims by city administrators that there is nothing problematic about the plan.

"When you don't get the right answer the first time, you start shaking your head and wondering," Katz said.

"Let's just find out and clear the air, once and for all."

Faced with Gerbasi's motion calling for a five-year review, Swandel said the city should look back even further, to the Glen Murray administration, to remove any taint of politics from the directive. Katz also noted it has been 12 years since the city conducted a comprehensive real estate audit.

That review, conducted over 18 months by former city auditor Shannon Hunt, resulted in a scathing report that concluded bureaucratic ineptitude and political interference in land deals cost the city millions of dollars.

Finance chairman Fielding, however, expressed concern an audit of unlimited scope might cost the city too much. In the end, council reached a compromise to look back at least five years and possibly longer, with the precise time frame left up to the city auditor.

"(That) makes sense," said Colin Craig of the Canadian Taxpayers Federation, which has been lobbying for the review.

"To be blunt, perception has gotten increasingly worse over the past month. Eventually people realized there are lots of concerns and something has to be done."

The real estate audit will be separate from a review of Winnipeg's fire-paramedic-station replacement program, which is already underway. Katz said the audit may run concurrently with the review, which he said he hopes concludes as soon as possible.


Potential targets for a city real estate audit

Parker land swap

River Heights Coun. John Orlikow and Transcona Coun. Russ Wyatt have complained for three years about a deal that saw the city give developer Andrew Marquess 23 hectares of unserviced city land in northwest Fort Garry in exchange for 3.6 hectares of serviced land in the Fort Rouge Yards, desired by Winnipeg Transit for a garage expansion. The deal was a late addition to the July 2009 property committee agenda and also included a reference to a 3,500-unit townhouse development and a rapid-transit spur line.

Winnipeg Square Parkade sale

St. Boniface Coun. Dan Vandal called for a city real estate audit in 2009 when Shindico Realty prematurely listed the city property for sale. It had not been declared surplus at the time. It eventually sold for $24 million.


Parcel Four

In April 2012, all but three city councillors balked at a plan to sell the downtown surface lot known as Parcel Four to an Alberta hotelier Canalta. One of the objections involved the fact the land -- whose value had been pegged at $7.7 million in 2009 but only $6 million this year -- had not been made available to other potential buyers.


Police headquarters

Orlikow complained the city did not conduct due diligence on a plan to recoup some of the cash spent on a new police headquarters on Graham Avenue from the sale of the Public Safety Building, whose sale is restricted by a public-use caveat. The Canadian Taxpayers Federation has also complained a property-management contract for the new Graham Avenue tower was not conducted with sufficient clarity to allow all companies to bid on $154,000 worth of work annually.

Republished from the Winnipeg Free Press print edition September 28, 2012 A3


Updated on Friday, September 28, 2012 at 12:42 PM CDT: corrects that audit took place over 18 months

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