Dear Mr. Premier:
Forty years ago, a young and naïve entrepreneur decided to take the biggest risk of his life and start a company from the ground up, in his home province of Saskatchewan. Having spent all his life in this province, he felt it was the perfect place to take that risk, even though the political climate was volatile and interest rates were sky-high. Today, this entrepreneur is not quite as young, and certainly nowhere near as naïve. However, he is still proud to call Saskatchewan the home base of his now international business, which has expanded exponentially during the last four decades. Tragically, the future of this proud Saskatchewan business is now in jeopardy. Our once ambitious plans to utilize our industry-leading manufacturing processes to facilitate greater international expansion and the resulting increase in employment and prosperity have been greatly diminished. At Super Seamless of Canada we are now considering if we are best served by relocating our operations in another province.
We argue that due to a combination of inconsistencies and incompetency’s on the part of both civic and elected officials responsible for the development of the Highway No.1 Regina Bypass has caused irreparable harm to our business.
We are on record in several venues over the last few years as having sincere concerns about the method in which this project was implemented. Several issues surrounding the planning and construction of the Highway No.1 Regina Bypass demand attention and reconciliation. Many of these issues point to unusual land acquisitions, land valuations and proper notifications and appeal processes being neglected if not manipulated to accommodate the interests of partisans.
Those whose interests would be served by last-minute changes to the established plan which had been described by city officials as “unlikely to undergo any major changes” (sic), are at the centre of our concerns. Many appear to either have had access to privileged information, or were able to exert influence on city and provincial government officials resulting in ‘last minute’ changes to the existing Regina Bypass plans upon which many (including ourselves) had based both our individual and future business plans. As a result, we have experienced and continue to experience significant hardships which these circumstances have imposed upon us.
Specifically, we point out the fact that the hastily revised plans to the New Regina Bypass appear to have also ‘bypassed’ many legitimate concerns over functionality and safety, while at the same time causing land owners of properties adjacent to the revised Regina Bypass to be severely affected. City engineers are on record as not endorsing the revised Regina Bypass plans due to their failure to address the more immediate concerns of northbound freight traffic and relieving congestion and wear on existing infrastructure within the city’s east end.
Additionally, those (like ourselves) whose business plans had been based on what we had been assured by those same officials would be “unlikely to change within the foreseeable future”, found ourselves at the mercy of land acquisition authorities as they arbitrarily carved up property which had been earmarked for our business expansion and future access based on the originally approved plans. This resulted in significant devaluation of several properties as the arbitrary formula for compensation offered by those officials did not accurately reflect our business potential, our future needs or what we later learned others had been paid for similarly sized properties.
Further to these points, over the last four decades we had heavily invested in engineering specialized equipment and had developed a distinctive business model based on the proprietary manufacturing systems and processes that this equipment would require. In 2005, we purchased 11 acres of land along the Highway No.1 South Service Road just off of Tower Road to expand and consolidate our manufacturing processes. We had plans to build 200,000 square feet of warehouses to house our manufacturing and distribution centre. In 2010 we were approved for development.
At a public forum in June of 2013--midway through construction of our first building-- we discovered that the access to our property could be impacted by the decision to route a major section of the Regina Bypass, 400 metres east of Tower Road. Our plans to expand our manufacturing capacity in order to reach international markets were effectively destroyed. The bulldozing through those parcels began only four days after they took title, resulting in many of our building products being destroyed and hauled off to the garbage dump. In the process, fill was dumped in our front driveway, which cut off all access to our property. When they offered to build a roadway into our property at the rear, it came with the condition that we sign a four page release, settlement, and non-disclosure agreement and waiver, which would effectively remove any government liability for any damages to our property and our business. This was not how we envisioned our governing authorities were expected to serve their constituency. Trust and respect for the institutions of government is difficult to maintain under such circumstances.
As a result of our treatment, we were compelled to investigate the circumstances surrounding these ‘last-minute’ changes. Upon researching the circumstances surrounding these changes, we discovered that the rationale for them appeared to serve only the interests of those who had recently acquired strategically placed parcels of land adjacent to the newly revised location of the Regina Bypass. Those properties then increased dramatically in value as a result of these changes. Their revised values compared to their purchase prices a short time ago, bore no resemblance to the values that we and many others had been offered. In short, what had been valuable property under the existing plan became far less valuable under the new plan and vice-versa.
One cannot help but conclude that the objective of repositioning the Regina Bypass to its present location was done to serve the interests of those who were in existing business relationships with elected officials and civic department managers. They appear to have been in a position to speculate through land purchases based on their access to privileged information regarding these late changes.
The decision to relocate a major part of the proposed Regina Bypass in such a surreptitious manner prompted us to conduct extensive research and to write dozens of letters and to ask hundreds of questions as to the science and reasoning behind the government’s decision. We wanted to know why the choice was made to route the eastern sections of the Regina Bypass within city limits, when the southern sections of the Bypass are routed 5 kilometers south of city limits. Unfortunately, we never did get a compelling answer from our government as to why this decision was made. We were told that it was the Department of Highways and Infrastructure engineers who decided where the Regina Bypass should be located.
Minister of Highways and Infrastructure Don McMorris stated that at first he did not agree with the location of the Regina Bypass, but his engineers convinced him not once, not twice, but three times that this was where the Regina Bypass should be located. However, a number of senior Highways Engineers told us they didn’t agree with the location of the Regina Bypass at Tower Road, and that their mandate was only to study how to link the Regina Bypass from Tower Road to Pinkie Road in documented and recorded conversations.
These very Engineers confirmed to us that it was certain developers who influenced this mandate. It was only too obvious that particular sections of the Regina Bypass were routed so that certain developers would be paid between 20 to 80 times more for land they had purchased relatively recently along the Bypass route, while other existing land owners along the eastern Bypass route who had their land expropriated, would be paid far less, simply the appraised market value.
It is well documented that these decisions were not driven primarily by public safety concerns. They appear to have been taken to facilitate the interests of a few chosen developers without consideration for the financial burden that will be borne by the taxpaying public many years into the future. For that reason alone, we believe that there needs to be better accountability for the cost of this project. Public trust is in the balance. Taxpayers need to be assured that the stewardship of their finances is in capable and objective hands.
Over the past few years, we have spent thousands of hours, and a significant amount of our own money, researching, writing letters and talking to business owners and taxpayers to solicit their opinions observations surrounding the New Regina Bypass. Not surprisingly, a vast majority of the informed public strongly disagree with the decision to locate the East Terminal of the Regina Bypass along Tower Road. The following is a synopsis of our findings:
- We discovered that in 2012, Long Lake Investment Inc. (LLI) purchased over 500 acres of land just off of Tower Road. The principle in LLI, Mr. Murad Al-Katib, has also been a director of Economic Development Regina (EDR)--formerly known as the Regina Regional Opportunities Commission (RROC)--since at least 2011, and became chairman in 2013. The lands that LLI acquired were deemed non-serviceable and wouldn’t be annexed by the City of Regina for the ‘foreseeable future,' otherwise deemed to be at least twenty-five years. However, shortly after LLI acquired these lands, not only did the City change their mind on serviceability, but they annexed these lands, immediately increasing their market value significantly for LLI, which had obvious ties to the City of Regina.
- In 2012, Forster Projects and Harvard Developments purchased 141 acres of land from Gulf Flying J, who owned the land and had plans to build a truck stop off Tower Road and Highway No.1. Again, the city deemed these lands as non-serviceable, and refused to annex them for the ‘foreseeable future.' Using this information, Gulf Flying J decided to sell the land and in a repeat of the LLI case, only a few short months later the City annexed these lands as well.
- These transactions occurred merely months prior to the four-day, closed door meeting between the municipal and provincial governments and select landowners in the area, where the decision was made to relocate the East Terminal of the Regina Bypass 400 meters further east. This move saw the Regina Bypass directly intersect LLI’s newly acquired lands, and allowed Forster/Harvard to advance their plans for what is now known as the Aurora Retail Complex. This one decision alone severely and negatively impacted our business--and the plans of other landowners of the area who were not included in this meeting--while significantly benefiting LLI and Forster/Harvard. This decision also ensured that any future plans to expand the Regina Bypass north could not go ahead without significant reworking of the intersection at Tower Road.
- As it turns out, Forster Projects/Harvard Developments and Long Lake Investment Inc. are the real winners with the decision to move the East Terminal of the Regina Bypass 400m further East. Forster Projects/Harvard Developments would have lost over 60 acres with the original location, and now only lost 0.54 acres, allowing them to capitalize on those extra acres to develop the new Aurora Retail Complex. Long Lake Investment Inc. essentially won the lottery with the decision to move the Regina Bypass right down the centre of their newly acquired land, enabling them to sell 128 acres to our government, realizing a tidy profit of $8.4 million. Then, the City of Regina, through the Government of Saskatchewan, relocated the Pacer Ball Park onto their property, to which they made another $5 million. The real shocker to many is that LLI still has over 300 acres of prime development-ready land, which only a few short years ago was deemed unserviceable and virtually worthless. This could result in LLI profiting off of taxpayers to the tune of hundreds of millions of dollars. The CN Intermodal is currently being built on this property and commercial lots are for sale for $450,000. This is a 3740% profit from the original price paid for $12,125/acre.
- Also, LLI's Commercial Development Plan has been approved for a CN Intermodal Service along the railroad tracks. This could also generate hundreds of millions of dollars from this $5.2 million dollar land purchase in 2012. Why then did the government develop this land in 2012 for the Regina Bypass? Our research would suggest that many in government knew far in advance that the Bypass was going to be built along Tower Road--and on land that had been recently purchased by some of their most influential supporters. The optics of this are not good.
- Another troubling aspect of the Regina Bypass is the high (some believe over-inflated) price. The cost of the Regina Bypass exploded from $63 million in 2007, to $400 million in 2012, then $800 million, then $1.2 billion and finally $1.88 billion, and these costs do not include land acquisition costs! While some would try to justify these cost increases with the fact that the scope of the Bypass has expanded over the years, it does not negate the fact that these are valued tax dollars that could have otherwise been spent on many other important items that were axed with the 2017 budget. Further, the “scope” of the Regina Bypass has always been to provide an alternative route around Regina for through travelers in order to alleviate congestion along Victoria Avenue and Highway No.1 East. Ironically, the project envisioned in 2007 for $400 Million would have done just that. As it expanded, however, the “scope” appears to have morphed into an economic development opportunity, and is far less about providing a safe alternative route around the City of Regina.
- Another land transaction close to the town of White City also bears further scrutiny. In 2011 the Government of Saskatchewan sold 7.45 acres at the intersection of Highway #1 and #48 to Mauri Gwyn Developments for $20,000 per Acre. This land had been owned by Highways for decades, and was effectively useless land, given the location. Then in 2015, the government repurchased 2.45 acres of this property back, and paid a whopping $400,000 per acre, or 20 times more than they sold the land for a few short years prior, raising the question of why they ever sold the land in the first place. Meanwhile, land right across the highway was expropriated for a significantly lower value per acre, between 15 and 25 times less per acre ($15,000 to $27,000). The question that begs to be answered is how and why is there such discrepancy in land prices when dealing with our various levels of government?
- At the other end of the New Regina Bypass is the GTH project which is part of the entire infrastructure development initiative for the Regina Bypass. It has also been the focus of controversy and potential scandal. The Department of Highways needed 54 acres of land for the section of the Regina Bypass that would be constructed alongside the GTH. In a strange twist, however, instead of expropriating the land from the original owners for $5,750 an acre--the market value based on what similar lands were being expropriated for--the government paid $103,000 per acre. Interestingly, there were two land transactions in between, which allowed Robert Tappauf, a land buyer from Alberta to acquire property which would soon become essential to the Regina Bypass project. Mr. Tappauf made an offer to purchase, and then flipped the land overnight directly to another land developer, Mr. Anthony Marquart. Mr. Marquart made a quick and tidy profit of $6 million from the 204 acres he then sold to our provincial government. It has been noted that Mr. Tappauf just happens to rent over 2200 acres of land to Bill Boyd, the Minister responsible for the GTH at the time. One cannot help but speculate as to how the information about the future Regina Bypass plans was being handled and by whom? Mr. Tappauf appears to have made a quick and tidy profit of $5 million. Mr. Marquart was then offered 20 times more than other landowners along Highway No.1 and Pinkie Road. When these land owners wouldn’t accept the lesser offers (the government's appraised values), their land was then expropriated. Something is wrong with this picture.
- Premier Wall, eventually signed an Order in Council to pay over $21 million for this land on February 27, 2014. When using the value of the land expropriated from the landowners along Pinkie Road and Highway No.1, the 54 acres of land needed for the Regina Bypass should have been worth approximately $315,000. Thus, the government seems to have been manipulated into overpaying about $21 million for this property. Sadly, the landowners along Highway No.1 and Pinkie Road have been forced into legal actions to try to get more than $5,750 an acre, and will inevitably spend years in court. Regardless of the outcome, which is uncertain at best for these land owners, there is likely to be an increased cost to the taxpayer for the legal actions that have resulted from this debacle. Furthermore, when called upon to address these very serious concerns, the Premier’s office decided that it would be best to call for a Process Audit, rather than a Forensic Audit, or an RCMP investigation. Presumably, it should be well known that a Process Audit would only determine if all of the T’s were crossed and if all the I’s were dotted. It does nothing to expose any malfeasance or collusion among those who had access to privileged information or control of the planning and development process.
- A company from France, Vinci, is building the Regina Bypass. Vinci won the bidding for the general construction contract and 30 year maintenance of the project. Interestingly, SNC-Lavalin also bid on this project but ultimately lost out to Vinci. Vinci has been linked to scandals across Europe including money laundering, bribery, and human rights violations. With recent revelations regarding SNC-Lavalin, we’re not sure if we are giving the lesser of two evils our hard-earned tax dollars. We do know that few local contractors were employed. They are the ones who had local experience with our conditions and functional needs. Apparently, even though we now have some parts of this new infrastructure that cannot accommodate farm machinery or some over-sized transports, we are assured that the decision to award this project to a foreign company was in our best interests. We can only hope that the reasons for this would pass closer scrutiny in light of all the controversy surrounding other aspect of this project. Sadly, we have seen some contractors in this and other parts of the construction industry close their doors in recent months. Many would agree that our current economic climate is volatile enough without exporting our resources such as tax revenue and jobs outside the province of Saskatchewan.
The information we have gathered in the above record causes great concern among those who have been informed. While there are no laws preventing entrepreneurs from speculation and development, in our opinion and that of many others, those activities should become subject to better management and scrutiny when it is the taxpaying public who is ultimately paying the bill. If there has been inappropriate conduct on the part of elected and public service officials in these areas, the democratic process has been interfered with, and we hold government officials accountable. It is their duty to expose wrongdoings and prevent abuse of publicly entrusted tax dollars regardless of political affiliations. Sadly, at this writing, the Premier’s office has declined to allow questioning of the principals named in the foregoing account. This does nothing to alleviate concerns about the missing facts surrounding the land purchase transactions and related costs associated with this project.
HOW OUR BUSINESS HAS BEEN EFFECTED.
Our company is just one example of the carnage that has been left along the way. The future financial viability of our business, and the health of the principals in our business, has been severely impacted. We challenge the government to be fair with all landowners and business owners whose land, businesses and life’s work have been curtailed. As with other entrepreneurs, we have worked hard to grow our business over the last 40 years, dedicating our lives to serving our customers and in our case building a national market for our products.
Our local government decided to value our land contribution to the Bypass project at $350,000, which when arbitrarily imposed upon us, effectively eviscerated our expansion plans. The reduction in the size of our remaining property combined with the physical affects to our land which the modifications produced, all contributed to devaluing the untouched portion of our land. When we refused to accept these arrangements, your government expropriated our property and bulldozed through our land cutting off our access, and damaging building products in the process. Our property now had far less marketability, which in turn placed us in a position which made relocation fiscally unviable. To replace the amount of land we required in a location that provided the same access as was originally planned for our business before the Bypass plans were hastily changed, became nearly impossible to justify financially.
We were then frustrated in our attempts to gain recourse to resolve our concerns as the process for mediation was not immediately available. We would have been forced to engage legal assistance at significant expense and, all after the fact. With no certain prospects of success in this process, we found ourselves painted into a financial corner. The resulting stresses produced by this series of events has cost us more than dollars and cents alone. At least one family member has suffered significant medical problems in part due to the stresses brought upon our family during this period. She is no longer able to work as a result. In summary, the potential for us to become a significant contributor to both employment and value-added exports from Saskatchewan has been effectively destroyed.
The apparent inconsistencies in valuations assessed by civic authorities combined with their demands for non-disclosure agreements from those whose land was annexed only goes to support suspicions that these government agents were not dealing in good faith. Why were some forced to accept arbitrary formulas for valuation while others were being paid significantly more per acre in the same areas? This is especially troubling when one considers that many of those who benefitted from these dramatic valuation differences had owned their properties for only a short period of time prior to the Bypass project being initiated while many other land owners who had been in place for decades, were forced to accept vastly different valuations for their land.
Specifically by way of example, Mr. Brad Wall, then Premier, signed an order in council to pay $21.1 million to Mr. Anthony Marquart for land that had been worth $312,000 prior to the revised bypass plans being ratified. Some developers appear to have profited by over $11 million from transactions that were completed in less than 6 months.
In contrast, as we mentioned earlier, our 40-year-old business lost land and has had future business expansion plans scuttled when we were offered only $350,000 by government negotiators. The informed public is left with no option but to conclude that some form of collusion between those in power and their patrons appears to have taken place.
TRANSPARENCY IS NEEDED
Thankfully, taxpayers are starting to see the full picture. The citizens of Saskatchewan are hearing more and more about the questionable transactions surrounding the GTH, and the arbitrary re-routing and associated exploding costs for the New Regina Bypass. They are also becoming informed about how people who owned properties adjacent to this project were treated (or mistreated) by land acquisition authorities.
Many have speculated that the provincial infrastructure budget for the next 20 years has been exhausted with this one project. We still need to find ways to fund maintenance for the hundreds of kilometers of roadways elsewhere in the province which will need repair in the interim. When we watch legislators introduce significant budgetary cuts while at the same time increasing taxation and disposing of some government services, we suspect that the financial burden of the New Regina Bypass is a significant contributor to these economic problems.
The optics of these scenarios reflects very poorly upon the incumbent government. This has been exacerbated by the apparent unwillingness of the present legislators to address these concerns. It should therefore not be surprising that many are outraged over these observations.
The time has come to address these concerns and either correct these perceptions with previously undisclosed facts or take responsibility to insure that those whose lives and businesses have been adversely affected are treated with equanimity.
IN OUR DREAMS
At Super Seamless of Canada, we find ourselves dreaming about how things might turn out if we could access funding with better political connections than we have at the present time. If we applied the same formula for valuation that has been applied to Mr.s Marquart and Tappauf, we could have accessed $20 million + in less time than we have used over the last few years to draw attention to this matter.
If the government feels it’s fair to pay Robert Tappauf and Anthony Marquardt $11 million in 6 months to flip the land, and for land that was never worked or upgraded, we feel that long term landowners, those that have worked the land for generations, built homes, built businesses, created wealth and employment and that have gone to work every day to make this province a better place, also deserve to make $11 million by flipping land every few months.
Super Seamless of Canada could make an offer to the Government of Saskatchewan to purchase our 40-year-old business that seems to have been deliberately and maliciously destroyed by the way in which those in charge managed the process. We believe that if the government feels it’s fair to pay $11 million to flip land in a few short months, the precedent has been set. Given those arrangements, some could argue that $11 million for every year of the 40 years that we have been in business, would equate to the same precedent. This would result in us receiving $440 million for our business. Given the ludicrous nature of this proposal, we don’t expect it to be taken seriously, nor should we. Unfortunately, many aspects of the New Regina Bypass land negotiations seem to fit that exact criteria and yet are not being questioned.
The above heading has become a common theme in recent years as it relates to the conduct of elected officials. Were we to be treated with similar consideration, we will first commit to topping up the values for the land owners who have been given only a fraction of the real value for their properties. That way, they can resume their lives and businesses allowing them to build on the foundations they have established in their careers without having to start all over again. Secondly, we would commit to providing a care facility for those whose health and well being has dramatically changed since the advent of the New Regina Bypass. At least 6 persons we know of have been diagnosed with serious if not terminal illnesses during this period. We suggest the stresses imposed upon them by the New Bypass have at least some small part in contributing to their conditions.
Next, we will pay for an Independent Judicial Public Inquiry, Forensic Audit and RCMP Investigation into the Regina Bypass work, Saskatchewan’s Largest Infrastructure Project--that may become known as the Largest Land Scandal in Saskatchewan’s History.
And finally, we will donate $15 million to the government budget so the 6% PST tax on the construction and service industries can be repealed. Ridding these industries of this tax will dramatically increase our chances of pulling our province out of what appears to many to be a government imposed recession.
I’ll admit that the above comments are infused with a certain amount of sarcasm, but they are intended only to highlight the issues that have affected numerous people as the New Regina Bypass project has evolved. It is not just money but trust in our institutions and the potential for our economic future which are at stake in these developments. It is my sincere hope that these concerns be taken seriously.