Property owner disappointed with lack of clarity in land purchase process

Prince Albert City Hall/Daily Herald File Photo

A developer who owns property north of the Indoor Recreation Centre site says he’s disappointed with city council’s decision to purchase seven acres of land from Signature Developments to build a parking lot, instead of considering his own.

Reg Fontaine, the president and owner of Fontaine Holdings Company Ltd., spoke to council on May 10 asking them to reconsider an offer to purchase his property for the parking lot instead. Fontaine originally had a non-binding agreement with the City to sell 7.78 acres of land north of the site for $2-million. The deal fell through after the City realized it would need to pay additional costs to remove piles of dirt, demolish buildings, and take out an underground septic tank.

Fontaine told council on May 10 he was willing to pay all of those costs if the City purchased the property. Council voted instead to purchase seven acres from Signature Developments for roughly $2.5-million.

“I was disappointed,” Fontaine said during an interview afterwards. “What I’m really looking for is clarity of process, and I think I had a valid point. My property was considerably cheaper than what Signature was providing, and for a little bit more land as well.

“I’m not upset at anybody personally, but I am a little frustrated in the process,” he added. “I think it should be open and fair. I’m an adjacent landowner, so it’s not like 10 people are going to come forward to undercut. I’m somebody who’s right there.”

Fontaine provided a copy of the email he received from Mayor Greg Dionne outlining why they were not making an official offer. In it, the mayor says they looked at the cost to remove dirt and the septic system, demolish buildings, and grade the property, and the cost far outweighed the benefits. In an interview afterwards, Dionne said those costs meant the City would only have saved around $5,000 by purchasing Fontaine’s property.

Fontaine said he replied, telling the City he was willing to deliver the land to spec if that’s what they wanted, but never heard back.

At the time, Fontaine said he assumed Signature Developments offered a better deal. However, when he saw media reports outlining the agreement, he decided to step forward with another offer. Fontaine reiterated that he has no problems meeting the City’s demands, and if that means paying to demolish buildings and upgrade the property, he’s willing to do it.

“I think I have a case for being given an opportunity,” he said. “I think this opportunity that was brought before me was cut off and went in a different direction without really any opportunity to come back on a level playing field in terms of ‘what exactly does the City want in terms of serviced property.’ I wasn’t provided with any of that, so I think the scales were tipped a little in a different direction.”

Fontaine added that his property would be ideal because it could provide parking for nearby ball diamonds like Andy Zwack field, as well as the new recreation centre and large arena.

He emphasized that he’s excited by the recreation centre development, but wants some of the processes improved.

Council voted 6-2 in favour of rejecting Fontaine’s offer, and purchasing land from Signature Developments. Mayor Greg Dionne said there was more to the decision than just the cost of removing dirt piles and demolishing buildings.

Dionne said the Signature Development property was a better fit for the City’s vision of the site. Previously, the City planned to build the recreation centre and new 4,500 seat arena closer to the highway, but changed their minds, and decided to build it on the far east portion of the property. Dionne said the Signature Development property would make a better parking lot under the new layout.

According to a report included in the May 10 council meeting, Signature Developments has agreed to install services to the land. Dionne said that was also a major factor, since the City would have to pay for that work themselves if they bought Fontaine’s property.

Fontaine told council on May 10 he was willing to install those services too, if that’s what it took to get the deal done. He also asked council to clarify the process so developers knew what the City’s needs were.

“I think it should be taken back and developed into a clearer process,” Fontaine told council. “If there’s two partners submitting (offers), lay the groundwork, let us both know what the needs are in terms of services, and let us bid at it.”

In an interview afterwards, Dionne said that was the first time the City learned Fontaine Holdings was prepared to pay for services. He said the City can’t allow developers to change their offers at the last minute.

“When he negotiated with us, at no time did he tell us about these services,” Dionne said during the interview. “That was in the 11th hour when he came to council.”

Fontaine’s presentation kicked off a more than 30-minute debate on the recreation centre, with much of it focused on the ethics of having two Signature Developments representatives advising the recreation centre steering committee. The steering committee was responsible for overseeing the parking lot land purchase, and recommended the Signature Developments proposal to council.

Mayor Greg Dionne told council the two Signature Development representatives only attend meetings when they are asked to do so, and were not present during discussions about this land purchase.

Several other councillors were also adamant there was no conflict of interest. Coun. Ted Zurakowski, who sits on the steering committee, also rejected the notion, and did Coun. Dennis Ogrodnick, who is not a committee member.

“Those advisors were not in the room, nor a part of any discussion that took place,” Zurakowski told council. “And as you know, it comes to council for any final decision.”

“This decision … is a recommendation from the steering committee. It is not a recommendation from Signature Developments and those two (representatives), and I really, really don’t like when we start slandering these two businessmen,” Ogrodnick added. “That really bothers me. We have local developers who are doing something good for our community, and we’re somehow insinuating that there is a conflict of interest.

“Developers have the right to make money. Business people have the right to make money, and I support that 100 per cent. What I don’t support is this ugly politics we’re … saying horrible things about people. That has to stop.”

At least one city councillor says she has some concerns about how the negotiations and discussions went down. Coun. Terra Lennox-Zepp said she’s not convinced the public wants to spend $2.5-million on additional parking and was worried council does not have a contract they could look at before voting.

Lennox-Zepp says she was told the contract is similar to the last contract that was signed with Signature Development, but was worried council wasn’t acting with full transparency.

She was also concerned with the appearance of having two Signature Developments reps advise the committee recommending the purchase.

“It is the steering committee that is recommending this purchase, and the steering committee is recommending this price. The report makes that very clear, that that is the case,” Lennox-Zepp said during the May 10 meeting. “I would suggest that there is a concern here—there is a conflict of interest—in having an advisor to a steering committee that then makes a recommendation of $2.5-million. It’s a large price tag and a large issue here.”