'Taxpayer dollar bills are getting lit on fire': SaskPower's land at GTH still racking up costs
Geoff Leo | CBC News | Posted: May 22, 2018 12:00 PM | Last Updated: May 22, 2018
Four years after SaskPower’s $25M purchase at GTH, land remains idle
Internal documents show SaskPower took just a few months in 2013 deciding to buy 145 acres of land at the Global Transportation Hub for $25 million.
The land has sat idle, accumulating bills at the taxpayers' expense, ever since.
Over that period SaskPower has racked up an additional $4M in costs ranging from consulting fees to interest. The total bill for the land is now $29 million and rising.
"Taxpayer dollar bills are getting lit on fire," said Todd MacKay, the prairie director of the Canadian Taxpayers Federation. "How come you can buy $25 million worth of land so quickly and it takes you ... years to figure out what to do with it?"
'A really expensive pause button'
Last week, SaskPower's president and CEO Mike Marsh told a committee of the legislature the crown "pressed the pause button on that project" in 2015 as a cost cutting measure. He said SaskPower hopes to have a plan for the land to its board by early 2019.
In an interview with CBC late last year, Marsh said when decision time arrived SaskPower would have to consider whether it would build at the GTH or on another large parcel of land it owns north of the city.
"At that point, if we decided to go with the north land, we will probably exit the GTH land and put it up for sale," Marsh said.
"That's a really expensive pause button they keep hitting there," said MacKay
"Think faster. I know you can do it cause you did it once already," he said, referring to the speed with which SaskPower made the $25 million purchase. "You can make million dollar land transactions very quickly when you're appropriately motivated. Get appropriately motivated."
According to SaskPower and the GTH, SaskPower has incurred the following costs in addition to the land purchase price:
- $2.4 million for design consultants.
- $83,000 for environmental testing.
- $382,000 for Geotechnical and project management.
- $446,000 for internal Saskpower staff.
- $66,000 for storm drain.
- $434,000 for interest on $25M purchase.
- $150,000 for grants in lieu of taxes.
SaskPower purchase funded GTH land deal
MacKay said all the extra expense is made worse by the "coincidental" connection between the timing of SaskPower's massive land purchase and the now-infamous GTH land deal.
In December 2013 the GTH decided to purchase 204 acres of land from Regina developer Anthony Marquart for $21 million — millions more than government appraisals said it was worth.
The trouble was, the GTH didn't have the money to make that purchase until the Saskpower deal arrived, just at the right moment.
On December 4, then SaskPower minister Bill Boyd brought SaskPower's proposed purchase of land from the GTH to cabinet for approval. That same month, Boyd, also the minister responsible for the GTH, asked cabinet to approve the GTH's purchase of Marquart's land.
"There's quite a coincidence that all this is happening just as the GTH needs money to make the land purchase that we've all been looking at for some time," said MacKay. "Perhaps that's a coincidence, perhaps it was orchestrated. But I think you have to ask the question."
The deal comes together
The deal between SaskPower and the GTH appears to have come together relatively quickly, from concept to contract in seven months.
According to an email obtained by CBC, the GTH seems to have first learned of SaskPower's interest in its land on April 25, 2013.
SaskPower said it was considering closing many of its locations around Regina and centralizing operations at the GTH.
The default value that we've experience from SaskPower is to rag the puck if they get the chance. - Todd MacKay, on Acess to Information requests to SaskPower
By mid-June, the GTH board was considering entering into a "purchase option agreement" with SaskPower and the crown had hired an appraiser to assess the land.
A couple days later, the GTH's Rhonda Ekstrom wrote an email to Steve Sousa of SaskPower, which CBC obtained through access to information.
Sousa's comments are blacked out but Ekstrom's replies seem to indicate he was talking about shopping around.
Ekstrom replied "Great. It's likely prudent to explore possible options, if for nothing else than for SaskPower to say that they considered all alternatives."
SaskPower conceals its due diligence
So just how much shopping around did SaskPower do? The company says it considered 13 different locations before settling on the GTH.
Through an access to information request, MacKay asked for a copy of the spreadsheet SaskPower created to compare the various options.
But the taxpayer-owned company refused to provide anything.
"They won't show what other pieces of land they looked at. They won't even show what the price tags were on the other pieces of land," MacKay said.
He said he would have thought that from SaskPower's perspective, "that document is by far the best way to justify their purchase" because it would presumably demonstrate that it got the best deal.
"Instead they've decided to go the other way and failed to provide that transparency."
MacKay said he's filed several access requests to SaskPower recently and this reaction is typical.
"The default value that we've experience from SaskPower is to rag the puck if they get the chance," he said.
MacKay complained to Saskatchewan's Information and Privacy commissioner, but the commissioner sided with SaskPower and agreed the company could legitimately conceal the documents as they constituted advice to government which can be redacted under the act.
By mid-October 2013, the Board agreed with SaskPower management that the GTH was the best available option.
Planned facility at GTH was to 'reduce costs'
A month later, in an email from Ekstrom to Sousa, Ekstrom noted there was some urgency to conclude the deal, noting "time is of the essence for closure."
On December 9, 2013, in an email to SaskPower managers and directors, Sousa explained that the new facility at the GTH, "will result in 1,100 employees moving from 27 different properties to a brand new building" at the GTH.
He claimed the move would "streamline operations and reduce costs."
A news release sent out the same day explained that "the cost of purchasing the land is included in SaskPower's 2013 capital budget."
The deal was officially concluded by the end of the year.