July 15, 2019

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Reveal developers: councillor

Homeowners charged twice for local improvements

Hey there, time traveller!
This article was published 21/3/2011 (3037 days ago), so information in it may no longer be current.

A senior city councillor wants Winnipeg to name the developers or notify property owners affected by "inside development" deals discovered by city auditors and condemned by the real estate industry.

Last week, a damning city audit revealed eight instances of land-drainage projects financed under an obscure mechanism called an "inside-development local improvement," where property owners wound up paying twice for land-drainage work -- first when they bought their lots, then through additional property taxes.

While taxation officials begin to investigate, St. Vital Coun. Gord Steeves said the city should either disclose the names of the developers as soon as possible or notify the affected property owners.

"The sooner the better, as far as I'm concerned. I think that's fair," said Steeves, who said he was annoyed that the auditor's most damning findings were not highlighted last July when executive policy committee first reviewed the report.

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Hey there, time traveller!
This article was published 21/3/2011 (3037 days ago), so information in it may no longer be current.

Property owners in Arrowwood, in the ward of Coun. Jeff Browaty (above), have been paying local-improvement taxes for land drainage.

TREVOR HAGAN / WINNIPEG FREE PRESS ARCHIVES

Property owners in Arrowwood, in the ward of Coun. Jeff Browaty (above), have been paying local-improvement taxes for land drainage.

A senior city councillor wants Winnipeg to name the developers or notify property owners affected by "inside development" deals discovered by city auditors and condemned by the real estate industry.

Last week, a damning city audit revealed eight instances of land-drainage projects financed under an obscure mechanism called an "inside-development local improvement," where property owners wound up paying twice for land-drainage work — first when they bought their lots, then through additional property taxes.

While taxation officials begin to investigate, St. Vital Coun. Gord Steeves said the city should either disclose the names of the developers as soon as possible or notify the affected property owners.

"The sooner the better, as far as I'm concerned. I think that's fair," said Steeves, who said he was annoyed that the auditor's most damning findings were not highlighted last July when executive policy committee first reviewed the report.

"I don't have an answer as to why it got this far without being flagged."

In a report that heads to council Wednesday, city auditors contend land-drainage work should never be eligible for local improvements, which are typically used to finance minor upgrades such as sidewalk paving or decorative street lighting.

"Our issue is this practice must come to an end," city auditor Brian Whiteside told the Free Press.

Mayor Sam Katz, property chairman Jeff Browaty (North Kildonan) and public works chairman Dan Vandal (St. Boniface) all concurred.

“I don’t have an answer as to why it got this far without being flagged’ — Gord Steeves (above), who wants names of developers disclosed.

TREVOR HAGAN / WINNIPEG FREE PRESS ARCHIVES

“I don’t have an answer as to why it got this far without being flagged’ — Gord Steeves (above), who wants names of developers disclosed.

"Local improvements are, at the best of times, convoluted," said Vandal, whose ward may include one of the developments in question.

In 2002, a Kelowna, B.C.-based developer received city approval for a local improvement to cover the cost of storm sewers for Windsor Park's Promenade du Parc development. It was the first time since 1975 such an arrangement was approved.

Several years later, in Browaty's ward, more than 100 Arrowwood-area property owners started to pay local-improvement taxes for land drainage. Browaty wants to know whether homeowners who purchased property in this development knew about the tax.

"I still want to get to the bottom of the subdivision in my ward to find out whether council approved it in this case," he said.

All eight agreements flagged by the auditors either did not get council approval or were amended without council's knowledge, the auditors found.

One Arrowwood homeowner, who requested anonymity, looked at her property tax bill on Monday and found she's paying an additional $120 a year over 20 years.

"I don't have a problem paying for it. I just don't want to pay for it twice," she said.

City assessor Nelson Karpa would not confirm whether Promenade du Parc or Arrowwood are among the eight subdivisions under investigation. "We need time for this to unfold," he said.

Two developers are involved in the eight cases of "inside-development local improvements," Whiteside said.

In one instance alone, the developer effectively pocketed $250,000 after he collected $2,036 per household in local-improvement taxes.

The organization representing Winnipeg's development industry condemned the double-charging as unethical and suggested fly-by-nighters — small developers — were responsible.

"You build the land drainage and you pay for it. It must be incorporated into the price of the lot," said Mike Carruthers, president of the Urban Development Institute of Manitoba. "It certainly gives a negative impression of the industry."

Peter Squire of WinnipegRealtors expressed concern his members may have sold some of the homes.

"It would be obvious our realtors would be unhappy these buyers were not told," Squire said.

It is unclear whether the city's investigation will result in reimbursement for property owners who were double-charged.

 

jen.skerritt@freepress.mb.ca

bartley.kives@freepress.mb.ca

 

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