“One of the Fastest Growing Companies In Canada”: Brad Wall, Lorne Nystrom & the GTH

Today CTV Saskatoon and Regina have been airing a taped interview with Sask Party Leader Brad Wall.

Inevitably, the host asked Wall about Saskatchewan’s Global Transportation Hub.

You can watch the full video here. If you’re not familiar with the story, there’s background here, and here.

I’m struggling with Wall’s interview – specifically, his arguments in favor of the deal that’s been under such scrutiny.

Here are a few quotes from his interview, with my comments underneath.

Wall: “The (GTH) purchase in question was for $103,000 dollars per acre… the seller had an appraisal of $130,000 per acre.”

The Appraisal, which no one has ever seen, has gone from $125,000 per acre (Bill Boyd, Feb 3rd) to $129,000 per acre (Wall, March 24th) – now $130,000 per acre.

Which is it? Since we’ve never seen The Appraisal, could we at least get some consistency?

Wall: “The government – GTH – had a lower appraisal.”

No, the government and the GTH both had lower appraisals. Two. It appears you might be forgetting about the government’s, which was even lower than the GTH’s.

Wall: “Typically in these situations – including the NDP – we’d go somewhere in the middle… $103,000 dollars was the number.”

I wonder how nearby landowners feel about that statement.

Landowners like Ruth Eisworth, who had her own land appraisal for $38,000 per acre, but had it expropriated by the Ministry of Highways for approx. $10,000, after the Ministry declared her appraisal invalid and smeared her appraiser (Colliers, not exactly a fly-by-night real estate company).

Here’s the reason a “government spokesperson” gave for why they paid Marquart $103,000 per acre, but Eisworth $10,000:

“The GTH is a Crown corporation and must make a business decision as to how much it can pay for land and still make a reasonable rate of return … The GTH makes decisions based on strategic and commercial priorities.”

Come.

ON.

The government says the GTH is not government, even though the Premier had to sign off on the deal, and this was a “government spokesperson”?  Instead they’re insisting it’s a market-competitive Crown corporation?

SaskPower, SaskTel, and SaskEnergy – aka Crown corps – all expropriate land.

If the GTH is a competitive corporation, why did it sell half of The Land immediately to the Ministry of Highways…at a loss?

Regina man Rudy Balzar also wants to know why he didn’t get the “middle”, after the GTH government paid him $38,000ish per acre for his land – which is across the street.

Oooh oh oh pick me! I know!

It might be because the government’s own appraiser excluded the 2014 Marquart deal, saying it wasn’t a good market indicator, when he appraised Balzer’s land… in 2015.

So to recap:

2014: Government GTH pays Marquart $103,000 per acre, despite their own appraisal saying it’s worth half that price.

2015: GTH Government pays Rudy Balzar approx. $38,000 per acre for land across the street.

“Somewhere in the middle”.

Wall: “A couple weeks ago we sold 30 acres of GTH land for a new business – that wants to locate here and create jobs – at $256,000 dollars per acre.”

That “new business” is a company called Brightenview, which you may remember from that time they were “one of the fastest growing companies in Canada”.

Or, you may remember them from such currently non-existent developments like the Dundurn mega-mall.

Okay, sure. Maybe the (booming Saskatchewan) market wasn’t, er, the right time to build the mega-mall, which Brightenview announced in 2012.

Maybe it’s a better time now.

In fact, according to Brightenview’s Vice-President of Public Affairs, former Saskatchewan NDP MP Lorne Nystrom the GTH “purchase” is actually a step forward for the Dundurn mega-mall.

Let’s be abundantly clear: 30 acres of GTH land has not been “sold” to Brightenview.

Brightenview and the GTH have made an “agreement in principle”. Brightenview put a deposit down on the deal – $256,000, or the price of one acre.

Just like they put a deposit down on land in Ontario in September 2014 – two years after announcing the Dundurn mall.

“Chatham-Kent council has accepted an offer from Brightenview Development International Inc. to buy land…deposit of $40,200 from Brightenview …Construction is expected to begin in the spring and be completed in 2016.”

Chatham-Kent residents were skeptical at the time, especially given the timing of Brightenview’s announcement… which was right before a local election.

Weird, right?

But, local Chatham-Kent pundits encouraged residents to stay positive.

April 2015: Brightenview asks Chatham-Kent for an extension on closing the deal, because they had been just so darn busy with “a major project they are working on in Saskatchewan”.

You know, that major project. That one.

August 2015: Still nothing.

April 2016 (if you read one link, read this one): You guessed it. Nada

Bottom line: in Chatham-Kent, Brightenview put one shovel in the ground, one time, three years ago.

I’m not sure they’ve even gone that far in Dundurn.

We don’t know the conditions of the “agreement” between Brightenview and the GTH (maybe they’re stashed in the same vault as that $129,000 appraisal), or when they expire.

All this considered, if I was Brad Wall, not sure I could bring myself to use the word “sold” in relation to this transaction.

Nevertheless,

Wall: “The taxpayers are actually making money. Yes that seems like a lot – 103,000 dollars a acre – except the value just a year a half later is 256,000.”

Really.

The value of an apple in 2014 was $103,000.

The value of that apple in 2015 is $256,000.

I don’t think so.

If we were comparing apples to apples, the first thing we’d have to do is factor in the loss – $5,164,000 – the government GTH took when it sold half of The Land to the Ministry of Highways, for half of what they paid for it.

That ups the $103,000 purchase price of The Land to $128,000

Okay, but we’re still doubling our money, right?

Sure, if we were selling Brightenview exactly what we bought, but we’re not.

We’re selling Brightenview serviced acres at $256,000 each.

The Land we bought from Marquart at $103,000 per acre was raw.

Grading, ditching, sewer, water, natural gas, electric, telephone – all “very expensive things to do”, according to Lorne Nystrom.

How expensive?

So: $128,000 purchase price + loss on sale to Highways + $200,000 servicing costs = $328,000 per acre cost to the taxpayer.

To sell for $256,000.

The government disputed their own appraiser’s numbers, again, saying the cost to service raw land at the GTH is only $80,000 per acre.

Which would be true, if $80,000 included the soft costs to service raw land, such as architectural, engineering, financing, and legal fees etc etc etc. Lawrek’s number was all-in.

Wall wrapped up the subject with,

Wall: “It speaks to the success of the GTH – the value of the land there is increasing because companies want to be there. There’s 800 new jobs out there. There’s businesses locating or want to locate. This is a success story and I’m happy to defend it.”

I just absolutely cannot with this anymore.

Honest to god Brad – really? You’re happy to defend this?

I just don’t understand.

Why is Wall still defending this, anyway? Shouldn’t it have all been straightened out by now?

“There’s been contact made, unsolicited, by people in the story,” he told reporters on February 5th. “People who are not very pleased with how their facts were presented (in the original CBC story), how even their quotes were presented or their comments were presented in terms of the context…to the extent there was a letter received here recently…I think there’s going to be others as well.”

What people? What letters?

“I think there are going to be more questions,” he continued. Yep, I’ve sure got some.

“But I think they may be directed more at CBC…as the story unravels.”

Unravels, indeed.