Katz defends $1-M Arizona purchase

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At city hall Thursday, Mayor Sam Katz explains to news media his cash purchase of a $1-million upscale home in Scottsdale, Ariz. (BORIS MINKEVICH / WINNIPEG FREE PRESS) Photo Store

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For the second time in two weeks, Winnipeg Mayor Sam Katz has had to answer questions about his activities in the Phoenix suburb of Scottsdale -- a place he does not like to discuss.

In August, Katz acquired a home in Scottsdale's upscale Windgate Ranch development from the sister of an executive with Shindico Realty, one of Winnipeg's largest developers. Maricopa County records show Katz took possession of the 4,400-square-foot property from Teri Nordstrom, the sister of Shindico's chief financial officer, Diane Shindleman.

The home's price was not disclosed in county records due to an exemption that applies to properties purchased in full. Records show the property has a cash value of US$829,000, though the market value is about 20 per cent higher -- about $995,000, according to county treasury officials.

On Thursday, Katz confirmed he bought the property but refused to answer questions about how long he has lived there.

"I purchased a home in Arizona. I paid fair market value. As has been mentioned on many occasions in the past, I've obviously owned other homes there," said Katz, adding he has also bought and sold 10 or 12 homes in Winnipeg over the years. "And that's basically the gist of it. There's nothing really more to say. It's unfortunate the innuendoes or conclusions that may or may not be drawn, but those are the facts and that's what I'm going to leave you with."

Earlier this month, Katz declared he was a victim of a witch hunt when he was first asked about his purchase of Scottsdale-based shell company Duddy Enterprises from Phil Sheegl, the city's chief administrative officer. Both Katz and Sheegl later said the transaction was a mistake.

Over the years, the mayor has refused to disclose how often he travels to Scottsdale, insisting the trips are a personal matter.

Sheegl also has a presence in Phoenix. Maricopa County records show Winnipeg's CAO owns a condo in a Scottsdale subdivision northwest of Windgate Ranch. Sheegl purchased the property in 2005 for $465,000, according to county property records.

Records also show Katz's next-door neighbour in Windgate Ranch is George Bell, listed on Arizona Corporation Commission records as a business partner with Sheegl in at least three companies.

Records show Katz's new home was worth $1.58 million in 2008, before the U.S. economic slowdown devastated Arizona's real estate market. An official with the Maricopa County treasurer's office confirmed Nordstrom paid close to $1.6 million cash for the property following a foreclosure in 2008, the year it was built. The Arizona Republic newspaper featured the transaction in a story on the Phoenix area's priciest home sales in October 2008. Documents show the home has a three-car garage and a pool.

In 2011 and 2012, property-tax bills for the Windgate property were sent to the Colorado-based Nordstrom at Katz's Winnipeg address. Katz declined to answer why the bills were sent to him in Winnipeg. He would not answer questions about the nature of his relationship to Nordstrom. Calls to Nordstrom and Diane Shindleman were not returned Thursday.

Earlier this month, Katz told radio station CJOB he has no relationship with Shindico Realty beyond an investment made by Shindico executives Robert and Sandy Shindleman in the Winnipeg Goldeyes baseball club and Shaw Park.

In 2010, Katz sold another Scottsdale home -- a 3,800-square-foot house in the gated community of Stonegate -- for $525,000 after his mortgageholder tried to foreclose on it. The mayor purchased that home for $837,500 in 2004, according to Maricopa County records. The original loan on the property was $749,000.

There is no mortgage on his new Scottsdale property. Katz said he was able to afford paying $1 million cash for the Windgate home because he's been very successful over the years as a nightclub, travel agency, comedy club and commercial property owner.

"I guess you've forgotten, I've had a 40-year business career. I've been blessed and very fortunate in many of my business ventures," he said. "You know what? If you work hard, wonderful things can happen."

There are no rules compelling members of city council to disclose properties and businesses they own outside Winnipeg. The city is in the midst of reviewing its code of conduct to determine if councillors should be required to disclose other properties such as a cottages, but council speaker Grant Nordman (St. Charles) said he sees no need for elected officials to report properties they own elsewhere.

"There's been no request for that and I don't feel any necessity to worry about it, whether it's in Phoenix or Scotland, Japan or the Philippines," he said. "If it's not in Manitoba, I really don't care."

jen.skerritt@freepress.mb.ca bartley.kives@freepress.mb.ca

Republished from the Winnipeg Free Press print edition September 28, 2012 A4