Sask. NDP demands government apology after Regina has to provide $6.8M in incentives for new Costco

Saskatchewan's Opposition NDP is demanding the provincial government apologize after a Crown corporation nearly highjacked the construction of a new Costco in Regina and ultimately cost the city nearly $7 million.

During a meeting of Regina city council last week, it emerged that the Global Transportation Hub (GTH) had been in talks with Costco about building the retail giant's second store at the GTH, west of Regina.

Mayor Chad Bachynski said Costco had previously reached a deal in principle to build the second location in the city, near the Westerra neighbourhood, but cancelled the deal in favour of building at the GTH.

That forced city council to agree to $6.78 million in incentives to lure the development back to its original location.

The funds will be taken from Regina Land Development Reserve. The city said it will make the money back through property taxes within seven years.

Few councillors were happy with the deal, and the NDP echoed that sentiment on Monday. 

Jared Clarke, the NDP critic for municipal affairs, said the Global Transportation Hub has no mandate for retail development and shouldn't be competing with Regina's municipal government.

"Regina residents shouldn't have to be on the hook and trying to spend more money or have more of their tax dollars used because the province wants to compete with them," Clarke said Monday.

"We think the the minister should have taken some responsibility for what has transpired and costing Regina taxpayers that $7 million."

Four times during question period on Monday the Opposition asked David Marit, the minister in charge of the Global Transportation Hub, to apologize. He did not.

Marit did not take questions from media on Monday.

GTH CEO Daniel Hersche defended the process on Monday.

He said Costco approached the Crown's realty broker, Colliers, about potentially building at the GTH. Hersche said the company was interested because it could get more land at the facility for its retail store, and it was also exploring the construction of a "last-mile" delivery and distribution hub that would service southern Saskatchewan. 

"It wasn't just an easy decision to make. It was something that we definitely did a lot of analysis on to, to see if it was the right fit for us," Hersche said.

The GTH has a "mandate to plan, develop, construct, operate, manage, and promote a dedicated transportation logistics park" in Regina, according to its website.

Hersche said the Crown is not looking to change its mandate and that Costco has built retail stores in industrial parks in other cities, so building at the GTH would not have been out of the ordinary.

Hersche said it will be a "little bit disappointing" to not have the Costco at the GTH, but that he is happy to have the project moving forward. He did admit there could be room for improvement in the future. 

"I think we definitely need to make sure that we're communicating at all times and between the city and us and making sure projects aren't competing, because again, we have no intent to compete with the city. That's not what we're trying to to do," he said.