Tories question MPI’s purchase of cityplace

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This article was published 27/02/2009 (6383 days ago), so information in it may no longer be current.

Manitoba’s opposition Tories are outraged Crown auto insurer Manitoba Public Insurance is now in the business of running hamburger stands, pizza joints and a spa.

Progressive Conservative critic for MPI, Cliff Graydon, said Friday MPI’s purchase of cityplace, a nine-storey downtown building, raises questions whether it’s a responsible use of its funds in such an uncertain economy.

MPI bought the building for $81.5 million to use as its head office.  The provincial Crown corporation already occupies close to 80 per cent of the building.

“In today’s market what is a good deal?” Graydon said. “My portfolio has dropped 48 per cent. How much has their portfolio dropped?

“How does is that going to translate into a better deal for ratepayers?”

Graydon also said the deal puts MPI in the potential position of being a property manager as the building contains a number of private tenants, including fast food restaurants and a day spa.

“Are they going to use excess staff to flip burgers?”

Grayden called on Attorney General Dave Chomiak, the minister responsible for MPI, to put the conditional purchase before a legislative committee so opposition MLAs can question the deal.

Marilyn McLaren, MPI’s chief executive officer, said the deal is the best one for ratepayers and MPI as it’s almost half as cheap as moving to another building. She also said MPI made the decision to buy cityplace — it was a corporate decision that did not need government’s blessing — to better control operating costs and spread out its investments.

She also said Redcliff Realty will continue to manage the building and Impact Parking the attached parkade — MPI will only be the landlord.

Gerry Gaudreau, secretary and executive director of the Public Utilities Board, said the provincial arm’s-length regulator cannot interfere in the sale.

Gaudreau said the PUB’s only regulatory authority over MPI is on rate premiums, not its operations.

He said the PUB can only ask MPI about the building’s purchase when MPI applies for new premiums likely in June.

McLaren said the PUB should have no problem with the building’s purchase as in the past it has questionned MPI about better spreading out its investments to protect Manitobans.

bruce.owen@freepress.mb.ca