No closed-door deal: Shindico

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The controversial Station No. 11, which is under construction at 1705 Portage Ave., is over budget. (JOE BRYKSA / WINNIPEG FREE PRESS ARCHIVES) Photo Store

Councillors OK spending for external audits

CITY council's finance committee has approved spending up to $500,000 to pay for a pair of external audits ordered in the wake of the fire-paramedic affair.

At a special meeting Friday, Couns. Russ Wyatt (Transcona), Paula Havixbeck (Charleswood-Tuxedo) and Grant Nordman (St. Charles) approved the spending to pay for the external review of the fire-paramedic construction project as well as a broader audit of major city real estate transactions in the past five years.

The review will cost about $250,000 and the audit will likely cost more, city audit manager Bryan Mansky told the committee.

The first $500,000 for two projects will come from a 2012 operating budget surplus, chief financial officer Mike Ruta said. The city's year-end surplus is projected to be $7.7 million, based on end-of-September financial data.

The city is also poised to select an out-of-province firm to conduct the fire-paramedic review next week. It will take more time to conclude a search for someone to do the real estate audit.

 

-- Bartley Kives

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Old fire hall No. 11 on Berry: Second proposed land-swap site

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Aging fire hall No. 12 on Grosvenor: One of the proposed sites in the now-dead land swap.

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Mulvey property: Third site in controversial land swap

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Station 12 on Taylor: New facility built on land owned by Shindico.

Over the past 21/2 months, Shindico Realty has remained mostly silent about the fire-paramedic furore that has consumed city hall.

The Winnipeg developer was tasked with building four new stations under the fire-paramedic station replacement program. But this role was not widely known until August, after Shindico prematurely listed the city's old Station No. 12 on Grosvenor Avenue for sale.

That listing sparked a cascading series of events that included the disclosure of the construction of a new Station No. 12 on Taylor Avenue land owned by Shindico, a proposed swap of that land for three city properties and cost overruns at the new Station No. 11 on Portage Avenue.

Faced with questions city administrators couldn't answer, city auditor Brian Whiteside called for an external review of the program. Council also voted to conduct a broader audit of major city real-estate transactions conducted over the past five years.

Now, 11 weeks into the fire-paramedic construction affair, Shindico development manager Bob Downs has offered his perspective on the project that has placed his firm under unprecedented public scrutiny.

Downs said Shindico sought the work in 2008 because the project was supposed to be a public-private partnership -- an arrangement in which a private company designs, builds and maintains a public amenity.

"That's what we do. That's how we got involved," Downs said in an interview. "From the original request for proposals to the final one, there were five amendments. At the end of the amendments, it was no longer a P3. We weren't going to own the stations. We were just going to build them. That's not what we do."

The plan changed in 2010, when the federal government made $9.7 million available for a $15.3-million project.

But elements of the plan now familiar to Winnipeggers -- including the construction of the new Station No. 12 on Shindico land and the three-for-one land swap -- had already been proposed, Downs said.

Here's his account of how some of the contentious aspects of the program came into being:

Building on private land

The original request for proposals to build four new fire-paramedic stations called for new facilities to rise in Sage Creek, Charleswood, River Heights and St. James. An amendment asked applicants to suggest locations, with an eye to improving emergency response times.

There was no need to find land for a new Station No. 18, which was built on the same Roblin Boulevard site as the old one. To build a new Station No. 27, the city purchased Sage Creek land from developer Qualico.

Shindico also identified the northwest cloverleaf at the intersection of Portage Avenue and Route 90 as the only viable location for a station to replace the aging No. 11 on Berry Street. The cloverleaf site wouldn't cost the city a penny, Downs said.

Shindico suggested its own land on Taylor Avenue as the home for the new Station No. 12.

"You build a building on land that doesn't belong to the city, because if you don't, it doesn't get built," said Downs, referring to timelines on the four-station construction project approved by council in 2010. "Now we have land that we own, and we don't sell land."

To resolve this issue, the land swap was born.

Origin of the swap

The original land swap involved only two properties -- Shindico's Taylor plot and a vacant parcel of city land at Mulvey Avenue East in Fort Rouge.

The latter site, located along the Red River, was once slated to be the new home for fire-paramedic Station No. 4, currently located in Osborne Village. But riverbank stabilization issues rendered that unworkable, so Fire Paramedic Chief Reid Douglas offered the Mulvey property for trade. "That was supposed to be the proposal we took to council for approval," Downs said.

Douglas, however, came back and informed Shindico the police still required part of the Mulvey land for its river-patrol unit. So a chunk of this land was carved off.

"I said, 'What do we do about the balance?' (Douglas) said, 'The only thing we have is the two stations that are being replaced,' " Downs said.

The chief enlisted the help of city property officials to determine values for the properties. "He wasn't on his own," Downs insisted. "He didn't come up with anything on his own."

The eventual plan to trade Taylor for the Mulvey, Grosvenor and Berry properties was a compromise solution.

"You have to understand the reason we wanted to swap the land is then we can make something out of the land. It benefits both the city and us," Downs said. "We add value to assessment rolls in generating taxes -- none of these were generating taxes at the time -- and we could convert to something that could generate the taxes."

The proposed land swap effectively died on Tuesday, when council's property committee voted to purchase Station No. 12 from Shindico and declare the other three properties surplus.

Station No. 11 price tag

Station No. 11 on Portage is the largest of the four new stations. It's also the last one to be built and the only one to be designated a "core station" as opposed to a suburban one.

Downs said lessons learned from the construction of the three suburban stations demanded changes to No. 11's design, which he pegged at 11,400 square feet in its original form. An initial 10,500-square-foot figure did not account for doors and corridors for personnel to move around.

Moving from double dorms to single dorms added even more space. The configuration had to be amended to satisfy concerns about traffic flow.

Downs said time and money were spent on redesigning access roads. Other costs that did not relate directly to the construction included estimates, permit fees and heating.

By the time the project was tallied up, the cost had jumped by $2.5 million. Council must approve that additional spending on Wednesday.

Looking back, Downs concedes "a different thing" happened almost every day to change the project, but he rejects the notion anyone was trying to pull a fast one on the public.

"It was always our understanding, that whatever we agreed to was subject to council," he said. "So it wasn't being done behind closed doors."

bartley.kives@freepress.mb.ca

Republished from the Winnipeg Free Press print edition November 10, 2012 0