City officials insist land swap above board

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Chief Reid Douglas: protocols followed (KEN GIGLIOTTI / WINNIPEG FREE PRESS ARCHIVES) Photo Store

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Winnipeg's fire-paramedic chief and property director say all protocols were followed when a deal was reached to swap two old fire halls and a chunk of riverfront city land for a piece of private property.

This fall, council expects to peruse a plan to exchange the old Fire Station No. 12 on Grosvenor Avenue, the soon-to-be-decommissioned Fire Station No. 11 on Berry Street and a parcel of riverfront land along Mulvey Avenue East for a Taylor Avenue property owned by real estate firm Shindico.

The Taylor land is already home to a new Fire-Paramedic Station No. 12, completed earlier this year. If council doesn't approve the swap, Shindico will be entitled to a $990,000 payment.

Over the past week, several councillors have questioned the process that led to the deal and raised concerns about the negotiating role played by Fire-Paramedic Chief Reid Douglas.

But both the chief and property director Barry Thorgrimson insist there is nothing unusual about the land swap, which came to light when Shindico listed the Grosvenor property for lease.

"The only thing that made this different is an aggressive developer jumped the gun," Thorgrimson said Wednesday during a joint interview with Douglas.

The two directors say the land swap originated in 2009 when the city issued a request for qualifications for companies capable of building four new fire-paramedic stations in Charleswood, Sage Creek, St. James and River Heights. Nine firms responded and seven were deemed to be qualified, Thorgrimson and Douglas said.

The city sent those seven firms a request for proposals to build the fire halls, stipulating the successful bidder must propose sites for the relocations. There were specific geographic requirements to ensure emergency response times would be under six minutes, Douglas said.

Of those companies, only Shindico responded and thus won the bid to build the new fire halls, Thorgrimson said.

The project cost was pegged at $15.3 million, a 2010 report said. This also allowed the city to borrow $9.7 million from the Canada Mortgage and Housing Corp. through an infrastructure program and called for the city to recoup $340,000 of the cost by selling the Grosvenor and Berry fire halls, which were to be declared surplus.

Douglas, then deputy chief, was in charge of selecting the locations for the new fire halls. Under his watch, a new No. 27 station was built on Sage Creek land purchased from developer Qualico, Charleswood's No. 18 station was rebuilt and a new No. 11 station is under construction on city-owned land on Portage Avenue at Route 90.

Douglas said Shindico proposed the land swap that would see a new No. 12 station rise on the company's Taylor Avenue property -- in exchange for the old city fire halls on Grosvenor and Berry, plus part of a parcel on Mulvey Avenue East, near the Red River.

"I said I'm open to anything, value for value, but the only thing is, it's subject to council approval," Douglas said.

"Shindico reacted the same way. They're anticipating council will also approve it," Thorgrimson added.

Douglas said he was assisted by the city's real estate division during the talks and all protocols governing property disposition were followed.

"We're under time constraints from the CMHC," he said, attempting to clarify earlier comments. "When I said I didn't follow the standard process that means I didn't send a letter to people in the real estate division and wait for it come to back while they were on holidays."

The report councillors will get this fall will make the disposal of the two fire halls "abundantly clear" and also include the valuations of the three city properties, Thorgrimson promised.

Real estate professionals, speaking on condition of anonymity, said they're disappointed by the land swap because there's no way to determine the fair market value for any property that isn't sold on the open market.

A spokesman for WinnipegRealtors said his organization would prefer to see governments dispose of surplus properties in a straightforward fashion that allows all firms a chance to sell the land. "We just want to see a system where everyone should have the opportunity, based on merit," Tom Derrett said.

St. Vital Coun. Brian Mayes said it's unusual the city built a fire hall on private land. "As a lawyer who's done a lot of real estate, I always say 'Don't move your stuff in before you have the title,' " Mayes said.

Shindico has "taken all the risk" by allowing the city to build a fire hall on its own land, Thorgrimson countered.

bartley.kives@freepress.mb.ca

Step-by-step look at the controversial deal

How the three-for-one fire hall land swap came about:

Spring 2009: The City of Winnipeg issues a request for qualifications to design, build, finance and maintain four new fire-paramedic stations, in Sage Creek, River Heights, St. James and Charleswood. Nine firms respond and seven are deemed qualified.

Fall 2009: All seven qualified companies are sent a request for proposals to build the fire-paramedic stations, stipulating they must suggest locations, within specified geographic boundaries. Only Shindico responds and wins the bid.

July 2010: City council approves a plan to borrow $9.7 million from the Canada Mortgage and Housing Corp. to kick-start the $15.3-million fire-hall project. The plan calls for the old River Heights and St. James stations to be declared surplus.

2010-2011: Shindico proposes a land swap that would allow a new No. 12 station to rise on property the firm owns on Taylor Avenue. In exchange, the firm would receive the No. 12 station on Grosvenor Avenue, the old No. 11 station on Berry Street and a chunk of a Mulvey Avenue East property once slated to be home to a new No. 4 station. The fire-paramedic service eventually agrees in principle to the deal.

2011: A new No. 27 station opens in Sage Creek, on former Qualico land. A new No. 18 station is built on the site of the old station in Charleswood. A Portage Avenue site is selected for a new No. 11 station in St. James. Construction begins on the new No. 12 station on Taylor Avenue.

March 2012: The new No. 12 station opens.

August 2012: Shindico prematurely lists the old No. 12 station for lease and is told by the city to remove the listing. A debate ensues among city officials about whether the property and the old No. 11 station have, in fact, been declared surplus.

Fall 2012: Council is expected to debate the land swap. Council will face a choice of either declaring Grosvenor, Berry and Mulvey surplus and exchanging them for Shindico's Taylor property -- or keeping the three properties and buying Shindico out for $990,000.

-- sources: Fire-Paramedic Chief Reid Douglas, property director Barry Thorgrimson, City of Winnipeg

Republished from the Winnipeg Free Press print edition August 30, 2012 A4