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Land bid raises questions on ballpark's parking deal

By: Bartley Kives

27/11/2009 1:00 AM | Comments: 10

Mayor Sam Katz speaks to the media in September 2008 about city-owned lot that is sublet to his Winnipeg Goldeyes.

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Mayor Sam Katz speaks to the media in September 2008 about city-owned lot that is sublet to his Winnipeg Goldeyes. (WAYNE.GLOWACKI@FREEPRESS.MB.CA ARCHIVES)

Earlier this month, councillors gathered behind closed doors to hear who answered the city's call to build a water park with the help of a $7-million grant.

They learned the sole respondent to Winnipeg's second attempt to give away water-park cash wants to build a luxury hotel on a vacant, city-owned gravel parking lot at the southwest corner of Waterfront Drive and William Stephenson Way.

At the time, this was like catnip to a city hall reporter. This parking lot is the very same parcel of land at the centre of the Riverside Park Management affair, a 2008 controversy about a lease renegotiation between the city and the non-profit organization that sublets city land to the Winnipeg Goldeyes, the baseball club owned by Mayor Sam Katz.

As reported several weeks ago, an unnamed hotel developer is willing to buy the vacant, unimproved lot for $7.7 million. But something slipped past me at the time.

What I failed to notice was the apparent value of the land has pretty much doubled during the 14 months that have elapsed since the conclusion of the Riverside Park affair in September 2008 and the emergence of the luxury-hotel plan.

More than a year ago, the crux of the Riverside Park issue was the assessed value of the gravel parking lot. City real-estate managers used that value of the land to determine how much rent to charge to Riverside Park for leasing the lot.

Up until 2005, the company paid nothing to use the property, due to a quirky deal signed by the city that indexed the rent to the assessed value of land that never happened to be assessed after the reconstruction of the Provencher Bridge.

So when the time came to renew the lease, the city's assessment department pegged the value of the property at $3.9 million. Riverside Park immediately rejected the assessment, claiming it represented the "highest and best use" of land that in fact could not be used for anything other than a parking lot.

The non-profit organization, which still listed Sam Katz as its president, went to the city's Board of Revision and whittled the assessed value down to $1.6 million. In response, city tax officials appealed the decision to the provincial Municipal Board and saw the value get bumped back up to $3.7 million.

But Riverside Park didn't let the issue die. So in 2008, city council approved a plan to retroactively cut the size of the lease in half and effectively erase a $233,000 bill for unpaid rent owed by the organization. By endorsing the deal, Riverside Park agreed the whole property should be assessed at $3.7 million.

Fourteen months later, councillors were told the land is worth $7.7 million to a private developer. To politicians who opposed the parking-lot lease renegotiation in 2008, this amounted to a vindication.

"The assessment department was clearly not wrong. Neither was the municipal board. They were both headed in the right direction. In fact, they did not go far enough toward the real value of the land," said Transcona Coun. Russ Wyatt, who was the mayor's staunchest critic on this particular issue.

"How can that parking lot be appraised at $3.7 million and 14 months later, it's worth $7.7 million? You can't have your cake and eat it, too. Clearly, council made an ill-informed decision with Riverside Park Management."

Jason McRae-King, the organization's current president, could not be reached for comment. And the mayor does not talk about Riverside Park.

But on Wednesday, when Katz pledged to eliminate some downtown surface lots, I took the opportunity to ask him whether it would be wise to assess those empty plots at their "highest and best use" as a means of encouraging owners to develop them.

"There are certain parking lots that cannot be developed at their 'highest and best use.' They're only allowed to do parking," he said, not missing a beat.

The development restrictions on the land at Waterfront Drive and William Stephenson Way were put in place to respect the future needs of The Forks and the Canadian Museum for Human Rights. So can a luxury hotel rise on the land?

The answer depends on the will of council. But some unnamed developer is certainly willing to pay more than $3.7 million for the privilege.

On the bright side, the value of empty surface lots in downtown Winnipeg appears to have jumped 119 per cent since September 2008.

 

bartley.kives@freepress.mb.ca

Republished from the Winnipeg Free Press print edition November 27, 2009 A7

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10 Commentscomment icon

Stop voting for business men.

This sounds kind of crazy. I am fairly new to the city, can anyone clarify for me, what is the relationship between Riverside Park Management and the Goldeyes? They sublet city land to the Goldeyes? And Katz was the president of one and the owner of the other (a private company, no less) AND he was Mayor at the same time? Do I understand this correctly? If so, holy conflict of interest, Batman!... that sounds insane!

Thanks for keeping us informed, Bartley.

If these lots have gone up in price since Sept 08, does that means that parking fees are going to climb even more in the next couple of years?

I don't have a problem with that as our rates are very low compared to other Cities. Higher rates = more transit usage?

Bart:

The momentum is on your side. You have the squirm factor approaching an appropriate level.

Finn Macool, Winnipegger, hefty J, skutch, GreatFlatLand, and watchingout all score top points. For once, I can't think of a single thing to add except moral support.

[edited]

'slightly' off topic...
If a surface lot increase 119 per cent in 14 months, I wonder if the value of an underground lot will raise anywhere near that percentage in a similar time frame.

Winnipeggers generally vote for incumbents when election time rolls around. It's a fact. The guy currently in the Mayor's chair is the worst Mayor we've ever had. Full stop. Please vote for anyone else next October - it's about our future!

Bartley-I totally agree with the other commenter...not only do you need to keep on this, someone, (anyone?) needs to delve further into these shenanigans because [edited] Sam and his behind-the-scenes cronies at City Hall are really stinking up the joint. [edited]. It is up to someone to really get the heat turned up high on our Mayor. How does he get away with this crap??

This is getting ridiculous. The mayor clearly needs to put his business dealings in a blind trust during his term, if he wants to show he has integrity and ethics. There should also no longer be corporate or union donations to city politicians (like federal and provincial laws). I bet I can guess the name of the hotel developer. Maybe a complaint to the city ombudsman would start an audit of all these cozy deals.

Are they going to need Shindico to sell the parking lot to the luxury hotel?

Please keep on this, Bart. It has that certain smell of you know what.

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