Winnipeg Free Press - PRINT EDITION

Swandel's backroom dealing with Shindico raises flags

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During Glen Murray's first term as Winnipeg's mayor, former city auditor Shannon Hunt spent two years investigating city real-estate transactions.

In a scathing report, released in the spring of 2000, Hunt concluded city councillors were too involved in property deals. Elected officials, she declared, were undermining civil servants in the property department.

"This created the impression that the only way to get things done at city hall was to circumvent the process," the Free Press reported in a summary of Hunt's final report, which also chastised the civil service for failing to provide council with clear advice about the disposition of property.

"There are no policies on whether land should be sold by public tender, or directly to an interested buyer, creating an impression that some developers are favoured over others."

Given the events at city hall over the past 18 months, Winnipeggers can be tempted to think not much has changed since the 1998-99 timeframe of the city's last real-estate audit.

The city stands accused once again of favouring one developer, based on the conclusion of an external audit of Winnipeg's fire-paramedic-station replacement program. The public service stands accused once again of failing to provide information to elected officials and circumventing process.

But on this city council, elected officials have only suffered indirect damage from the maelstrom swirling about city hall.

Sure, Mayor Sam Katz is doing terribly in recent polls. And it's fair to say all members of council have been embarrassed by city's capital-procurement and real-estate woes.

Still, no member of this council has taken any form of direct flak. The closest has been St. Norbert Coun. Justin Swandel, the lone member of council to find fault in the fire-paramedic station audit and the only member of council to suggest his colleagues are only motivated by political expedience.

On Wednesday, Swandel risked further scrutiny by informing council he attempted to negotiate a deal to acquire fire-paramedic Station No. 12, the city facility built on Taylor Avenue property owned by Shindico Realty.

A proposed three-for-one land swap would have placed Station 12 in the city's hands, but that was cancelled amid the furor of the fall of 2012. Council then approved a plan to have city property officials and Shindico come up with appraisals for the land and split the difference, if the two values wound up close to each other.

The city came up with a $1.05-million appraisal, while Shindico's estimate came in at $2.08 million -- $1.2 million for the land and another $844,000 in compensation for the negative effect a fire-paramedic station has on neighbouring property.

The two sides were so far apart, city property officials recommended the land be expropriated.

To borrow a phrase from Boromir, one does not simply take property from Shindico Realty, a firm run by some of the brightest minds in Winnipeg real estate.

Expropriation is a confrontational process that can take years to conclude, especially if neither side is willing to settle on a given value.

Shindico, whose officials expressed disappointment with the cancellation of the land swap, is not likely to let the city get away without a hearing before the Land Value Appraisal Commission, a provincial body that determines what governments pay for land acquisitions.

The expropriation process requires the city to pay Shindico's legal costs and any interest that accrues as a result of payment delays. The Land Value Appraisal Commission, meanwhile, is clogged up with CentrePort Canada Way expropriation cases.

So Swandel, attempting to play the role of diplomat, began talking to Shindico in a last-ditch effort to stave off expropriation. He said he was trying to get Shindico within the vicinity of $1.5 million before other members of the city's Executive Policy Committee scuttled the back-channel discussions.

"I was having a conversation with a party to see if I could find some good ground," Swandel said Wednesday in an interview. "I was trying to save the city millions of dollars."

Swandel said he was close to a framework for a deal, but wasn't able to bring anything firm to EPC. He said he only mentioned his discussions with Shindico in passing because he wanted his council colleagues to know there was interest on both sides in avoiding a time-consuming, financial headache.

What council heard, however, was one of their colleagues went behind their backs to conduct negotiations. Property chairman Jeff Browaty (North Kildonan) called that inappropriate.

Did Swandel overstep his bounds? He certainly rejects any comparison to the behaviour assailed by Shannon Hunt 14 years ago.

"I've read that real-estate audit twice," he said, repeating that he was simply trying to save the city time and money.

More reading is on the way. A new real-estate audit is expected within months.

And this time, elected officials are not expected to serve as the focus.

Republished from the Winnipeg Free Press print edition February 27, 2014 A5

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About Bartley Kives

Bartley Kives wants you to know his last name rhymes with Beavis, as in Beavis and Butthead. He aspires to match the wit, grace and intelligence of the 1990s cartoon series.

Bartley joined the Free Press in 1998 as a music critic. He spent the ensuing 7.5 years interviewing the likes of Neil Young and David Bowie and trying to stay out of trouble at the Winnipeg Folk Festival before deciding it was far more exciting to sit through zoning-variance appeals at city hall.

In 2006, Bartley followed Winnipeg Mayor Sam Katz from the music business into civic politics. He spent seven years covering city hall from a windowless basement office.

He is now reporter-at-large for the Free Press and also writes an outdoor-recreation column called Offroad for the Outdoors page.

A canoeist, backpacker and food geek, Bartley is fond of conventional and wilderness travel. He is the author of A Daytripper’s Guide to Manitoba: Exploring Canada’s Undiscovered Province, the only comprehensive travel guidebook for Manitoba – and a Canadian bestseller, to boot. He is also co-author of Stuck In The Middle: Dissenting Views of Winnipeg, a collaboration with photographer Bryan Scott and the winner of the 2014 Carol Shields Winnipeg Book Award.

Bartley’s work has also appeared on CBC Radio and Citytv as well as in publications such as The Guardian, explore magazine and National Geographic Traveler. He sits on the board of PEN Canada, which promotes freedom of expression.

Born in Winnipeg, he has an arts degree from the University of Winnipeg and a master’s degree in journalism from Ottawa’s Carleton University. He is the proud owner of a blender.

On Twitter: @bkives


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