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Land values miscalculated in land-swap deal

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The pending sale of three civic properties reveals that senior administrators had badly miscalculated the value of the land when negotiating with developer Shindico.

City hall is about to sell the three parcels of land for almost $1.7 million — properties that the administration wanted to trade to Shindico for the company’s land on Taylor Avenue where the new #12 fire paramedic station was built, which Shindico had valued at $900,000.

"Our (administration) should not have gone down the road of a straight-up land swap (with Shindico)," Coun. Jeff Browaty said. "We should have put the properties up for an open bid in the first place."

An administrative report states two old fire halls will be sold for a combined $686,000 and a third parcel of vacant land will be sold for $1 million.

Details of the three deals are contained in next week’s agenda of the property, planning and development committee report.

Browaty, chairman of PP&D committee, said the sale prices of the three parcels do not support Shindico’s claim in its dispute with the city over the value of the Taylor Avenue land.

Browaty (North Kildonan) said city staff were willing to throw in a third parcel of land in the Shindico deal, without knowing its market value.

The fire hall replacement program went $3.2 million over budget ($18.5 million versus the original $15.3 million) and could go higher if the city has to pay more than $1 million to Shindico for the Taylor Avenue property, which is now going to an expropriation process.

The Ernst & Young audit into the program was critical of the decision by former CAO Phil Sheegl to let former fire chief Reid Douglas handle the negotiations with Shindico, finding that Douglas didn’t have the expertise or the staff resources to negotiate with Shindico.

Shindico has disputed the audit findings, claiming that its actions saved the city millions of dollars.

Coun. John Orlikow said he takes little comfort in knowing that the proceeds from the sale of the land will be going to cover the cost of the Taylor Avenue purchase.

Orlikow said money from the sale of the former fire halls was always going to be used to offset the construction of the four new halls, but now that money will be used to buy land for one of the new stations.

 

aldo.santin@freepress.mb.ca

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