A highway paved with money

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This article was published 02/10/2015 (3820 days ago), so information in it may no longer be current.

The cost of acquiring land for CentrePort Canada Way is five times higher than the original budget because expropriation disputes aren’t going the province’s way.

The 9.5-kilometre provincial highway, which connects Inkster Boulevard to the west Perimeter Highway, opened to vehicle traffic in 2013. Expropriation costs originally pegged at $7 million are now $35 million and rising, the Selinger government confirmed this week.

What’s officially known as Provincial Trunk Highway 190 came with a price tag of $212 million, including $7 million to expropriate 31 parcels of land in Winnipeg and the RM of Rosser to make way for the road.

More than a third of the former property owners, however, balked at the purchase price offered by the provincial Crown Lands and Property Agency. This led to a series of hearings before the Land Value Appraisal Commission, an independent body that settles expropriation disputes when both sides can’t come to an agreement.

In several decisions, the commission sided with the property owners. As a result of these decisions — and expenses associated with the hearings — the cost of acquiring land for CentrePort Canada Way has reached $35 million.

“This number is likely to go up again as more cases are settled,” government spokeswoman Rachel Morgan said in a statement. “Building CentrePort on this site has increased the value of the land.”

In one of the cases, Crown Lands offered $600,000 to property owner Hubert Kleysen, the former president of Kleysen Transport, for 39 acres of land on the western edge of what’s now CentrePort Canada Way.

After hearing arguments from the province and Kleysen, the Land Value Appraisal Commission set the compensation at $1.95 million, or more than three times what the province offered. Other decisions have favoured property owners.

The province made a series of mistakes when it went about planning CentrePort Canada Way, said Rocky Neufeld, a lawyer and land appraiser who represented some of the property owners along the route.

First, the province announced the creation of CentrePort, an industrial trade hub, before it approached property owners along CentrePort Canada Way with purchase offers. This drove up the value of the land, Neufeld said.

The province also did not have enough of its own land to begin with to create the road, he said. Developers usually assemble more land in order to prevent acquisition costs from running away.

Finally, the $7-million kitty set aside for expropriations was so low, it guaranteed low offers and costly disputes, Neufeld said.

“It was a quick decision, based on the availability of funding. They put the budget together too quickly, without looking at realistic costs,” he said in an interview.

“They have to expropriate from time to time. There’s no way around it; there’s not always land available. But any time they take that decision lightly, it will blow up in their face.

“It will cost them more than just poor budgeting. All the expenses rise when there are disputes.”

Reg Helwer, infrastructure critic for the Opposition Progressive Conservatives, described the CentrePort Canada Way expropriations as another example of NDP mismanagement.

“They plugged in a number and then went out into the real world,” said Helwer, the Tory MLA for Brandon West.

He also questioned the purpose of the roadway.

“I’ve driven around CentrePort a number of times, and I’ve tried to wrap my mind around what it’s supposed to be,” Helwer said. “I’ve been around infrastructure projects a long time, but that one remains a mystery.”

Citing a cost-benefit analysis, the Selinger government says CentrePort Canada Way will provide the province with $450 million in savings over 25 years for businesses and citizens by reducing idle time, fuel costs and accidents for vehicles operating northwest of Richardson International Airport.

The government also says the new CentrePort Rail Park, an industrial park made possible by the roadway, will attract $45 million in private development over the next three years.

bartley.kives@freepress.mb.ca