Winnipeg Free Press - PRINT EDITION

Steeves' golf course valuations well over industry estimates

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Gord Steeves has promised voters a pot of gold if elected mayor, but industry analysts say the pot would be half-filled, at best.

Steeves claimed the city could earn $100 million from the sale of four city-owned golf courses -- money he would be put in a fund to rebuild roads.

Doing the math

Gord Steeves' road, infrastructure fund

$100 million: revenue from the sale of four city-owned golf courses.

$37.32 - $49.1 million: Industry analysts' estimation of revenue from the sale of four city-owned golf courses.

Gord Steeves would sell John Blumberg at 198 acres**

Industry estimation of value: $40,000 to $50,000 per acre $7.92-$9.9 million.

Steeves' estimation of value: 200 acres at $110,000 per acre $22 million.

 

Three other city golf courses: 256 acres.** But Steeves would withhold 60 acres for public green space, leaving 196 acres to be sold.

Industry analysts' estimation of value of remaining city golf course land: $150,000 to $200,000 per acre $29.4-$39.2 million.

Steeves estimates acreage of three city golf courses totals 440 acres, valued at $180,000 per acre $79.2 million.

 

** Acreage of city-owned golf courses based on City of Winnipeg document expression of interest #497-2011 for select city-owned golf courses

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But a calculation based on development-industry estimates of land value shows Steeves would, at most, reach half that amount -- $49 million.

Steeves would sell the Windsor Park, Kildonan Park, Crescent Drive and John Blumberg golf courses. Developers view each property as a prime site because all are situated near rivers.

The three courses within the city -- Windsor Park, Crescent Drive, Kildonan Park -- are located in established neighbourhoods, and development costs would be much less than vacant land on the outskirts that are in various stages of development.

John Blumberg also runs along the Assiniboine River -- but it's located in the RM of Headingley, where lot density is limited and without services, which limits its value compared with the golf courses within Winnipeg.

"These are in extremely well-located pieces of land," said Alan Borger, CEO and president of Ladco Company.

"There'd be a definite premium," adding the properties could be developed with a mix of single-family and multi-family housing and river views in existing neighbourhoods.

Why the discrepancy in land values?

Steeves based his $100-million figure on high numbers: He valued the John Blumberg course at $110,000 per acre, while analysts placed a more realistic value at $40,000 to $50,000 per acre.

Steeves also believes the three city golf courses combined equal 440 acres of land, but a City of Winnipeg document from 2011, when the golf courses were listed for sale, puts the total acreage at 255 acres. That accounts for the other difference in value.

"There's no way that those four golf courses would only raise $49 million," Steeves said. "I think ($100 million) is low and we'd probably surpass that."

Steeves said a development researcher determined the size of the city golf courses, adding he has no reason to doubt his numbers: "There's no way those three (city) golf courses are only 255 acres."

Steeves estimated the value of the city golf course land at $160,000 to $180,000 per acre; while the analysts surveyed by the Free Press put the value at $150,000 to $200,000.

As far as the value of John Blumberg, Steeves said $110,000 per acre is conservative: "We showed our numbers to six different developers and they all said our numbers were probably low."

Wilf Tallieu, mayor of the RM of Headlingely, said zoning restrictions only allow two lots per acre. He placed the value of the Blumberg land at $40,000 to $50,000 per acre, a figure Borger said is reasonable.

The Blumberg golf course has been for sale for 14 months.

The Winnipeg School Division sold a 4.4-acre parcel of land in River Heights in November for $2.7 million -- $616,000 per acre. Based on that figure, Steeves would surpass the $100-million total, even using the smaller acreage from the 2011 city document. But analysts said that property isn't a fair comparison. The plan calls for 31 homes on narrow lots and the cost of constructing services would be minimal.

It's believed Genstar paid $120,000 an acre for land near Island Lakes. Borger said based on that figure, the three city-owned golf courses could be sold for $150,000 to $175,000 per acre, possibly $200,000 per acre.

aldo.santin@freepress.mb.ca

Republished from the Winnipeg Free Press print edition July 26, 2014 A5

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