CEO explains Hydro’s view of land talks

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This article was published 14/06/2016 (3433 days ago), so information in it may no longer be current.

The disagreement between Manitoba Hydro and city hall is so wide the two sides can’t even agree to the agreed-upon sale price or the narrative of how they got there.

Hydro CEO Kelvin Shepherd held a 20-minute question-and answer session with media Tuesday, where he said the board had approved the controversial sale for $19 million but denied his officials had broken any agreement or had taken advantage of the fact the city is unable to expropriate Hydro land.

“I’ve reviewed the correspondence between the managements of both Hydro and the city… and I see no evidence of negotiations in bad faith,” Shepherd told reporters.

Shepherd outlined a negotiations process that was in complete contrast to what senior city officials had described last week: city hall and Hydro began negotiations without any formal agreement on how the final value would be determined.

Hydro negotiators did disagree with the initial appraisal value, which Shepherd said was set at $12 million; Hydro later countered with another value of $22 million and ultimately agreed on a price of $19 million, which could be lowered further if the city doesn’t need all the land.

“There was never an understanding (the first appraisal) would be a binding appraisal or a sole appraisal,” Shepherd said during the news conference in the lobby of the downtown Manitoba Hydro Place tower.

City officials never objected to Hydro getting its own appraisal, Shepherd said. “So, I don’t see how that can be considered bad faith.”

At city hall, Mayor Brian Bowman said he couldn’t explain the difference between Hydro’s version of events and that provided by senior city officials.

“The questions you are asking are consistent with what I and members of council are asking with regards to the administrative report and the characterization by Hydro,” Bowman said before the start of another closed-door meeting with city administrators. “These are questions we are seeking clarity on as well.”

The discrepancy in the value of the Hydro land between Hydro’s $19 million and the city’s $20.4 million was explained in the city’s administrative report: both sides agreed on a final price that ranged between $19 million and $20.4 million, depending on how much of the transmission land is needed for the transit roadway.

The administrative report also suggested the city could recoup almost half of the purchase price, as suggested by Shepherd, by transferring back to Hydro a chunk of land near the Parker lands but the administration said more realistically the final price might drop to $16 million to $17 million.

It’s now up to council to vote on the deal, which will happen Wednesday. It’s not certain there is enough votes on the 16-member council to approve the Hydro deal. The city can’t proceed with the dog-leg route through the Parker lands without the Hydro transmission property. Failure by council to ratify the purchase could scuttle the project or force city officials to consider another route to link Jubilee to the University of Manitoba campus and Investors Group Field.

Bowman said the deal approved by the Hydro board is the same one that was presented by the administration and will be going to council for a vote on Wednesday.

Shepherd said Hydro’s second appraisal, which placed the value of the land at $22 million, had been determined by a professional appraisal firm using the Over The Fence methodology. That approach is generally applied to corridor lands — hydro transmission corridors, rail line, pipelines — long, narrow strips of property, where the value matches the adjoining property.

However, local appraisers contacted by the Free Press last week said Hydro’s appraisal puts its property at over $1 million an acre, equal in value to the most lucrative, commercialy zoned property, on a major thoroughfare. The appraisers said Hydro’s valuation doesn’t match the reality of where the land exists — between the Fort Garry Industrial Park and the residential neighbourhoods of south Fort Garry, west of Pembina Highway — and should be assessed a far lower price.

aldo.santin@freepress.mb.ca