N.L. plans to buy pricey land for new hospital. Turns out they owned it 8 years ago
Government plans to buy back former Crown land at 3 times the price it sold for
The Newfoundland and Labrador government is planning to buy back the land it sold to H3 Development eight years ago for the site of a new hospital in St. John's — and the infrastructure minister says it's a good deal.
According to the land grant issued in 2016, H3 Development Ltd. bought 38 acres of Crown land near Kenmount Road for $3,215,000 — putting the cost per acre at $84,605.
The government is now buying back 17 acres from the company, in addition to the 10-acre donation that was announced earlier this month, said Infrastructure Minister Fred Hutton.
"It is definitely a good deal in my opinion, for the residents of Newfoundland and Labrador," Hutton told reporters on Wednesday.
Last week, the provincial government announced the replacement for the St. Clare's Mercy Hospital would be located off Kenmount Road on that 10 acres of land being donated by H3 Development, a joint venture between the Hickman automotive group and companies owned by Glenn Hickey.
However, it was later revealed the land donation was actually part of a $23 million agreement for 54 acres owned by H3. The deal hasn't been approved yet, but if successful it would mean approximately a price tag of $400,250 per acre.
Hutton said anyone who wanted to buy an acre of H3-owned land would pay $485,000. But, he said, the government is getting a lower price.
"The market value on this — if you total it all up — we're paying $359,000 per acre, which is well below the asking price," said Hutton.
Cheaper plot available
In the House of Assembly Thursday, provincial Opposition leader Tony Wakeham questioned whether that was actually the best deal.
A nearby 55-acre property, 720 Kenmount Rd., was sold for $575,000 in October 2022, Wakeham said. That's $10,400 per acre.
Wakeham added that another piece of land located at 543 Kenmount Rd., which is 70 acres, is up for sale at $1.75 million— $25,000 per acre.
"Again, I ask the minister, are we getting the best value for our dollars?"
In the legislature, Hutton defended the plan to purchase the land after hearing these figures.
"Almost half the province are going to live within about a 15- to 20-minute drive of this facility," said Hutton. "They can access it through the Outer Ring Road. They can access it through the other busy road in the province, one of the busiest, Kenmount Road.
"So yes, it is a good deal. And it's a good deal for Newfoundland and Labrador residents who require better health-care service."
Developed land
Hutton said there could be a tax benefit for H3's land donation, and it has happened in the past with other donors.
Since H3 Development bought the Crown land eight years ago, he said, the company has made investments to the area through roads, water, sewer infrastructure and a private pump station.
"This was purchased at a time eight years ago, land prices were quite different up there. There was no infrastructure. They've spent well in excess of $10 million," said Hutton.
He said he believes both the donation and acquisition of land will be closed around the same time, adding that the deal is with lawyers who are going through surveys and land deeds. Hutton said he expects the deal to go smoothly.
"The donation is basically what prompted our desire to purchase more land and to build this hospital there," he said.
Need more land
Hutton said it was H3 Development that approached his department over possibly donating 10 acres and the owners believed that land would be enough for a hospital.
However, he said, the government realized that more land would be required.
"It became apparent that we were going to need more land and we entered into a negotiation with them at that point," he said.
The St. Clare's footprint is currently 5.5 acres and, Hutton said, government wanted to model its replacement on Corner Brook's new Western Memorial Regional Hospital, but they needed to find a spot where it could fit. He said the old Grace Hospital and old Waterford Hospital sites were not suitable.
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With files from Here & Now
