We’re grown-ups; we know ‘zero’ risk isn’t realistic

Hey there, time traveller!
This article was published 18/02/2012 (5176 days ago), so information in it may no longer be current.

Every time Mayor Sam Katz says we have “nothing to worry about,” you can bet there’s at least something to worry about.

Recently, Katz was pressed to explain why he had said there was “zero risk” to the city in a $10-million loan guarantee to Andrew Marquess, the developer promising to transform the brown fields of the Fort Rouge Yards into a vibrant, dense, urban community. Documents obtained by the Free Press revealed this week the city’s own number crunchers believe taxpayers face a $7-million liability should Marquess fail to find the necessary financing and default on the infill project.

That should not come as a shock to anyone. In fact, any time a government is asked to use taxpayer money to guarantee a loan to a private entity, there is inherent risk. Add in an uncertain real estate market, tight-fisted lenders and a developer who has, through his recent business and legal travails, raised questions about his liquidity, and you have some degree of risk. How much is difficult to quantify, but you can safely say it’s more than “zero.”

No doubt the mayor and officials in his office are rolling their eyes at what they believe is a silly semantic debate. In categorizing this as a dispute over semantics, however, they are once again demonstrating their lack of familiarity with the principles of accountability and transparency. It is important to tell the good people of Winnipeg when there are risks inherent in a project and lay out a clear plan to mitigate those risks. That way, people know you are honest and realistic, two characteristics we should demand our local government leaders embody.

No one would begrudge the mayor a measure of risk in his agenda to make Winnipeg a better city. In fact, good leaders embrace risk as a condition for progress. Few great things are accomplished without a degree of risk. But constantly portraying “some” risk as “zero” risk is just plain disrespectful. And it’s hardly a model for a successful public relations strategy.

Would it have killed Katz to admit there was some risk, but then explain he is reasonably confident the city is in a position to recoup some if not all of the money by assuming ownership of Marquess’ Fort Rouge Yards assets? No, he would have survived and the citizens would have been better off because of his frankness. Lamentably, Katz has been operating like this for some years now and has never been punished by voters. So, in that sense, fudging the truth has been a ‘zero-risk’ strategy for Katz.

Interestingly, in denying what is patently evident, Katz is actually stirring up unwanted interest in the expedited, quirky deal that made the city and Marquess partners.

In 2009, the city agreed to swap a small chunk of Marquess-owned land in the Fort Rouge Yards — a vacant strip of former industrial land on the northwest flank of the Lord Roberts neighbourhood — for a much larger parcel of unserviced land in Fort Garry known as the Parker lands. The city needed a piece of Marquess’s Fort Rouge holdings to expand its transit garage at Osborne just south of the Pembina interchange. Marquess saw great opportunity in the Parker lands, particularly because the city had already begun to contemplate a rapid transit line through that area to connect burgeoning west Winnipeg and related developments, such as IKEA.

The land-swap deal arrived suddenly and without much in the way of analysis from city officials. As is the style in Katz’s city hall, it was rushed through with only a modicum of debate. And as a result, questions about the deal still linger.

Marquess was the owner of the only land appropriate for the transit-garage expansion, so obviously the city had to do business with him. But how did the Parker lands come into the mix? The details of those negotiations have never been properly revealed. Nor do we know the true value of the Parker lands, especially when viewed as part of an as-yet unrealized transit development. It would have been interesting to see how much money the city could have sold the Parker lands for if they were put on the open market.

There are a lot of people in this town who would like to see the Fort Rouge and Parker developments succeed. The increased property taxes that would flow from new development on those lands would go a long way to paying for much-needed improvements to rapid transit, while providing new and exciting options for Winnipeggers looking for something in between a downtown condominium and a sprawling, cookie-cutter suburban split-level.

However, by rushing important decisions, glossing over the fine details and dismissing all notions of risk, Katz is not doing these projects any service. In fact, he is actually attaching a growing list of troubling questions to what should be a positive development.

It would be refreshing if the mayor would stop patting us on the head and telling us everything is OK, and start giving us the frank goods.

dan.lett@freepress.mb.ca