December 16, 2019

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Land-swap deal back to bite city

City must expropriate or buy back land it needs for southwest BRT

Andrew Marquess was at the centre of the 2009 land-swap deal with the city. Below, Coun. Russ Wyatt has blasted the deal.

PHIL HOSSACK / WINNIPEG FREE PRESS files Andrew Marquess was at the centre of the 2009 land-swap deal with the city. Below, Coun. Russ Wyatt has blasted the deal.

Hey there, time traveller!
This article was published 14/2/2015 (1766 days ago), so information in it may no longer be current.

Ramifications of a controversial 2009 land swap between a private developer and city hall are still being felt as the city prepares to expropriate 35 parcels of land for completion of the southwest bus rapid-transit project and construction of a storm retention pond.

City officials boasted it was a good deal in 2009 when it traded, straight up, the 23.8-hectare Parker lands to developer Andrew Marquess for a 3.6-hectare parcel of the former Fort Rouge yards.

Officials justified the even trade on the ground both parcels of land were valued at $1 million — a claim shown to be false in the June 2014 audit of 33 city real estate transactions by consulting firm EY.

Now, the city is required to expropriate or buy back 9.7 hectares of the Parker lands from Marquess — mostly for a storm retention pond needed to solve perennial basement flooding in the Taylor-Grant Park-Earl Grey neighbourhoods, but also for a portion of the BRT project.

"This is an example of the short-mindedness that took place during the last administration," said Coun. Russ Wyatt (Transcona), who voted against the 2009 land swap. "The fact we now have to go back and buy back land we (sold) five years ago is outrageous."

'This is an example of the short-mindedness that took place during the last administration. The fact we now have to go back and buy back land we (sold) five years ago is outrageous' — Coun. Russ Wyatt, who voted against the 2009 land swap

The land expropriation is the only matter on Tuesday's special meeting of the property and development committee.

An administrative report identified 34 parcels of land needed for the completion of the southwest BRT corridor from Jubilee Avenue to the University of Manitoba, and one parcel needed for the construction of a storm retention pond.

The Calrossie storm retention pond, to be constructed adjacent to a portion of the BRT corridor through the Parker lands, is proposed to solve the perennial basement flooding suffered by homeowners in the Taylor-Grant Park-Earl Grey neighbourhoods.

The storm retention pond will be constructed on eight hectares of land owned by Gem Equities, a development company controlled by Marquess.

The city also plans to expropriate 1.6 hectares of Gem Equities' Parker property needed for the BRT corridor.

Terms of the 2009 land-swap deal allowed city hall to buy back from Gem Equities any portion of the Parker lands needed for the BRT corridor, at a price of $42,500 per hectare.

However, the purchase price for the eight hectares of the Parker land needed for the retention pond will be subject to further negotiation or the expropriation process.

Parker lands

Parker lands

An administrative report states it's not possible to place an estimate on the total price tag for the 35 parcels needed for both projects, but the cost will be covered within the $590-million budget of the combined projects.

Wyatt said the administration's position is not genuine, adding they must have an estimate but added he believes they don't want to disclose it now to jeopardize the ongoing negotiations with the individual property owners.

"It would have been a lot simpler, and honest, if they had just said that, but I don't know why they didn't," Wyatt said, adding he is surprised details on the planned expropriation are being presented in a public report when previous land deals were discussed confidentially.

The review of the Parker land swap was criticized in the June 2014 EY audit, which found city officials failed to appraise either property involved in the transaction and the equitable value was only a guess.

The 2009 review was "completed in a rushed manner," EY noted. "The highest and best use of either property was not determined, nor was either property inspected. As such, it could be questioned whether value for money was achieved (in the swap)."

Marquess had a reputation as one of the city’s most ambitious and innovative developers, known for incorporating geothermal heating-and-cooling systems and other energy-efficient features into many of his projects, and pursing rental projects when few others are doing it. He launched the conversion of the former downtown Sheraton Winnipeg into a rental apartment, which was later sold to another firm, and renovated several other downtown properties.

But his reputation has been tarnished by some high-profile controversies. He has a reputation for not paying his bills on time and he was penalized for misleading city officials over location of recreational space on a McPhillips condo development. He has been criticized for failing to develop the remaining Fort Rouge property, for which the city decided to guarantee $10 million of a $14.7-million loan for the project – but he has installed the underground geo-thermal infrastructure on the site and constructed a transitway station there as required by the city.

While the loan guarantee was being debated, city officials were quietly negotiating with Marquess to address three apartment blocks that had been cited as derelict properties.

Marquess could not be reached for comment.

An administrative report for Tuesday's meeting states negotiations are ongoing with Marquess for the eight hectares needed for the retention pond. The report states he plans to develop the remaining 15.3 hectares of the Parker lands.

Coun. John Orlikow, chairman of the property and development committee, said he is concerned the city is buying back land it sold five years ago, but said administration officials told him neither project was foreseen for the Parker property when the 2009 trade was approved.

Orlikow said constructing the retention pond was first proposed in 2012 and the BRT route through the Parker lands was only an option in 2009 that became the chosen route in 2013, adding that was why the buyback price was included in the swap.

"I am unhappy about" the expropriation, Orlikow said. "The staff went through the whole decision-making process on how that happened and they satisfied me."

Aldo Santin

Aldo Santin

Aldo Santin is a veteran newspaper reporter who first carried a pen and notepad in 1978 and joined the Winnipeg Free Press in 1986, where he has covered a variety of beats and specialty areas including education, aboriginal issues, urban and downtown development. Santin has been covering city hall since 2013.

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Updated on Thursday, February 26, 2015 at 11:58 AM CST: Adds more details on Marquess' history and reputation in real-estate development in Winnipeg.

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