HOUSING
Mr. Chairperson (Ben Sveinson): Order, please. Will the Committee of Supply please come to order. When the committee last sat we were considering the Estimates of the Depart-ment of Housing. I believe we were on 30.1. Housing Executive (b) Executive Support (1) Salaries and Employee Benefits $391,100. Shall the item pass?…
Mr. Kevin Lamoureux (Inkster): Mr. Chairperson, I did have a few questions in a couple of different areas that I was wanting to explore with the minister. The first one is the government in the past has entered into private, public contracts in terms of the development of land. The two larger ones over the last decade have been the Ladco, MHRC, and then there was Qualico and MHRC in opposite ends of the city, Qualico being in the north end. Virtually all of the area is inside the area which I represent with respect to the Qualico, so I guess I will start there.
There was quite a bit of expectation that was built up a number of years ago when the government signed the agreement. Individuals felt fairly confident that we were going to see other things starting to develop in that northwest corner of the city. I am wondering if the minister can give some sort of indication to us today in terms of what the current status is with Qualico and that plot of land just north of Old Commonwealth saddling Keewatin Street.
Mr. Reimer: Mr. Chairperson, the member is right. It is an agreement between MHRC and Qualico. It was entered into in July of 1993, and there are approximately 750 residential building lots. It is just almost 163 acres of land. The portion contributed by MHRC was around 124 acres, the remainder by Qualico. It was a 15-year agreement. The agreement expires in July of 2008 or until such time as all the building lots and other properties have been developed and sold, whichever occurs earlier.
From what I have been told, there have been no overtures by Qualico to start development on it. We are still of the opinion that we are willing to participate in the joint venture and that the sharing of the revenues is by agreement between ourselves and Qualico, but to date there have been no overtures by Qualico to start to develop that property. The contract is current, the intent is still there but until Qualico decides to move on it, it is still vacant.
Mr. Lamoureux: Every year there would be annual servicing costs just for having that lot there. Who would be picking up the cost for that?
Mr. Reimer: The only costs that are associated with it would be our costs for weed control. We do not pay tax on vacant land, no property tax, so our cost would be in doing weed control on that.
Mr. Lamoureux: Is there anywhere in the contract that would stipulate that they have to take action by such–you know, we will go into some discussion on the deal in the south end. My understanding of that one, because I did actually get a copy of the deal but that was a number of years ago, back I think it was in '89. It gave a detailed plan as to what expectations, how many houses need to be met by X year. Was there anything of that nature in this particular agreement?
Mr. Reimer: It has been pointed out that there is no commitment to a certain amount of homes by a certain amount of time. It is a land development agreement for the development of the land with the principal player being the developer himself, which is Qualico. But there is no time frame saying that there has to be a certain amount of development or lots are sold or completions within a certain time frame other than the agreement itself which expires, like I mentioned before, in July of 2008.
Mr. Lamoureux: So there would be no penalty at all for Qualico if it decides that it is not going to build anything on the property?
Mr. Reimer: That is true.
Mr. Lamoureux: Is the government then honoured to keep up the contract with Qualico for the full duration of the 15 years, or can it opt out if it wanted to go with someone else that might want to come forward with an idea, because I understood that it was actually tendered, and if it was tendered one would think that there might have been others that put in to develop the area? So, because we have one developer who enters into a contract and there is nothing obligating him to develop the land, it seems that the people, in particular in Meadows West and other areas because it has such a dramatic impact on the overall development whether it is in The Maples or Tyndall Park, that if Qualico is not obligated to build anything, does the government have the ability to get out with no penalty?
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Mr. Reimer: I do not know whether that has been looked at as an option. We would have to look at it and see whether there was a way of doing it if it was warranted, but I should point out that the land that is owned by Qualico itself also has not been developed, so the whole parcel is sitting vacant. I guess it is a matter of which areas of the city are developing and where the demand is. I guess it is like anything, the market will dictate where people want to move or live or develop, and I guess this piece of property, at this particular time, does not have the demand that maybe other areas have.
Mr. Lamoureux: I think that we have to at least acknowledge or note that we have a bit of a situation in the northwest end of the city if you are going to expand. You really cannot go further west because of the airport. You do not want to go building under the runway type thing, or under the flight path, so that means further construction. There are many people who would like to move into that area just north of Inkster Boulevard or see that expansion occur in Meadows West. Because I think that it is worthy of the government at the very least sitting down with Qualico, and I will come up with some other suggestions right away, but I would think that there is benefit in terms of sitting down with Qualico.
Well, first, before even sitting down with Qualico, finding out whether or not there were, because I thought that there were others that put in for that particular tender. I could be wrong on that, but I think it is worthwhile finding that out. If not, I still believe that there might be just cause to look at reopening that whole process, and it is because of limitations of individuals that want to remain or build in that community that are being restricted. If Qualico, for example, has a number of sites throughout the city and you cannot build in that area because there is no land available, Qualico is the only one who has the land but they choose not to develop that, well, it does have an impact on the market because we have allowed that to take place. So I think that there is a need for the government to look at that contract and possibly sit down with Qualico because it has been somewhat stagnant over the last number of years. I would look for just the minister's observations on the comments.
Mr. Reimer: The member brings up some interesting points. You know, it is a fairly big piece of property up there in northwest Winnipeg. It has been pointed out to me that there has been development, I believe, north of this property, northeast of this property, and it is sitting there. It would be interesting to know, and I guess I would ask the department to look into whether we have had any other types of overtures in this particular area and look at what our options are as to the agreements, pardon me, the agreement with Qualico, and get a further update on it and the situations around the development of this piece of property. But, again, I guess, as I mentioned before, even with the acreage that is indicated, Qualico has not even moved on their own piece of property.
Mr. Lamoureux: I guess that in itself is somewhat discouraging because on the onset one might speculate that they do not have any intentions of developing that property, at least in the short term, but they have already had rights to develop that entire area for the past six years. What I would be interested in seeing happen, as I say, is that we look into the contract. If it is possible to be given a copy of the contract in confidence, I would honour any requests from the minister in keeping the confidentiality aspect of it in confidence. But I would very much like to be able to see some sort of movement in that area because it is a concern, I say not only for the people that I currently represent in Meadows West but also in The Maples.
I am wondering how receptive the minister might be if I were to attempt to arrange some form of a public meeting and invite Qualico and someone from the department to come just to listen to the concerns of the residents in terms of the development or potential development of that quadrant of the city. It is something that I know would likely mean a lot to a lot of the residents in the area. I think that MHRC and Qualico would both benefit by an event of this nature. I would be more than happy to provide and ensure that the facilities and the local residents are, on both sides, on The Maples side and the Inkster side, made aware of it, at least those homes that are right adjacent to the property. Would he be open to that?
Mr. Reimer: I certainly cannot discourage the member for trying to represent his constituency in the best manner that he feels proper and in looking at the best utilization of properties in that area and the responsibilities for develop-ment of that particular area. I cannot really yea or nay whether there should be a meeting. If the member is of the opinion that is something he was wanting to pursue with the residents in that area, I could not say do not do it or do it. I think any type of information meeting that the public wants to have in regard to any type of aspect of their community, we as elected officials have an obligation to try to hear the sides of all concerned citizens. I can only say that if the member feels there is a concern shown by some of his constituents, and he feels that this is one of the ways to try to get some sort of resolve to the problem or direction on the problem, that is a decision that, as a member and a representative of that constituency, that he feels that he should do, well, then I cannot give him that type of direction.
As the landlord of that particular piece of property, in co-operation with Qualico, I imagine that if there was a meeting to discuss this particular piece of property, naturally, we would have a representative from Manitoba Housing there as an observer or someone to listen to the concerns of the citizens. But as to giving direction, we would not be in a position to give any type of direction as to what should or should not transpire there.
I think, if anything, it would be viewed as a public meeting to address a concern, so we would be there as an observer, because it would pertain to us, as a landowner, I should say, in that particular area.
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Mr. Lamoureux: I think that the request is more so trying to provide the joint partners with what the general feelings are of the area, the type of development, for example, that they would like to see. I think it just assists in the invitation of the MHRC and Qualico, if in fact the minister sees no problem in terms of accommodating an informational type of meeting at which both MHRC, Manitoba Housing, the local residents, can just give some feedback.
I can recall when it was first announced, for example, I extended an invitation and Qualico did show up, and they talked about the plan. It was a fairly impressive plan. Well, obviously that has likely changed, or maybe it has not. I do not know. Just to at least give the minister and his staff notice that this is a meeting that will likely occur, we will be appealing to MHRC to send a representative along with Qualico so that the residents can be better informed as to what the future is. In the interim, as I indicated, if it is possible to get an actual copy of the contract, I would be interested in that, as local representative, and I would ask the minister to look into the original tendering process. Were there others that had made application? Because if Qualico and MHRC jointly feel that they do not want to proceed, maybe there is someone else or another organization or another private company that is prepared to move ahead, especially if you have the local residents wanting to see the development.
Unfortunately, I do not have a map with me, but if the minister saw the map, he will see how critical of a link this particular piece is to The Maples, Meadows West and Tyndall Park. It is in essence the hook-up. The traffic patterns would change tremendously by an extension of Keewatin, for example, Keewatin Street to Adsum.
So there are all sorts of things that could result in some positive, maybe a little bit of negative also, but generally speaking I think there could be a lot of good things, good ideas that could be discussed at this particular meeting.
So the minister can give a comment on that if he so chooses, or I am going to move on to the next area.
Mr. Reimer: Just a short comment. Like I mentioned, if there is going to be a meeting called, we certainly would want to be invited as part land owner in that particular area. We would have someone from our department be there.
Mr. Lamoureux: I thank the minister. Moving on to the Ladco, MHRC deal. I think that one was a little bit better defined. I know I do have the contract for it. I am just trying to get a bit of an update from the minister in terms of I understood that–and again, I am going by memory, and this is a decade ago–I thought it was close to a 10-year agreement in which there were some time frames where they expected development to occur. If the minister can just give an update on that.
Mr. Reimer: It was a 15-year agreement that began in 1989. It was for a joint venture to develop 1,900 lots on approximately 476 acres, which was 180 acres with MHRC and 296 with Ladco. The current status as of February 28, 1999, is there are 305 lots being developed in phases one, two and three, 241 lots are sold, 64 are remaining in inventory. The cost of servicing the sites and selling of the lots was just over $7 million. The total value of the sales was just over $10 million. Our share of the profits was almost a million dollars on that.
Mr. Lamoureux: Does the minister anticipate that they will continue to receive more money or more profit? I was under the impression, and I would have to go back to the original press release, that it was closer to somewhere around $10 million that they were anticipating. Was that just an overly optimistic price back then. I realize the current minister was not even around at the time, I believe, when that actually was signed, so obviously he is not responsible for it, but I believe it was an original $10-million profit that they were hoping to achieve.
Mr. Reimer: I think the number was based on the selling of the original 1,900 lots. I guess you have to do some arithmetic. When you look at, if there has been 305 lots developed with MHRC's share of almost a million dollars, I guess you have to–[interjection] Yes. If it was totally developed, maybe that is where the $10 million would come in, you know, totally. But it is being developed as one of the areas of growth in the city.
Mr. Lamoureux: So at this point, the government is optimistic that that particular area will in fact be fully developed over the next five years.
Mr. Reimer: Well, that is a good area of town, you know. That is represented by a good MLA too. I guess it all depends on market demand and the growth area. I know there is still a fair amount of growth in southeast Winnipeg. There seems to be a fair amount of homes still going up. As to whether it will develop the full 1,900 building lots, the development seems to be still moving in that particular area and I guess you always live with the optimism, if they continue to grow it may possibly fully develop. I do not know whether that will be in the next few years or when it will happen but with 305 lots developed already since 1989, I guess that is 10 years, and you never know how the market is going to move.
Mr. Lamoureux: Actually when the minister talked about that side of the town type thing, one of the things I should mention, today I posed a question about property tax, and that side of the town even a house of the same value does not pay as much property tax because on the north side of town we happen to be in Winnipeg School Division No. 1 which is the heaviest taxed property-wise in the whole province, so it is a little bit tougher to sell in terms of the amount of property tax, but the quality of life is by far worth the venture to moving into the north end of Winnipeg. I can assure the minister of that, and that is part of the reason why I am suggesting we need to look at reopening or having more dialogue with Qualico because I believe that there is a demand for it.
An Honourable Member: Nothing to do with the MLA, then.
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Mr. Lamoureux: With all modesty, I do not think it has too much to do with me, even though my ego might like to think so at times. Anyway, I wanted to move on to another area.