Gwyn Developments and the Saskatchewan Government

Posted in Communications

During the course of planning and development, our public sector administrators found themselves in a bit of a dilemma. They had sold land to a local developer which they would later need to accommodate the new Regina Bypass. We can assume that the developer’s position would be to claim that his recently purchased land increased in value significantly over a relatively short period of time due to its location being adjacent to the new infrastructure. We have copies of communications from commercial realtors who speculate the value of this property has increased due to its proximity to the proposed bypass and the potential ease of access that provides. They mention that while the property cannot be used for residential development, it could accommodate limited commercial applications such as a gas station etc. Such speculation ignores the fact that applications and approvals would need to be in place for such use, and such approvals were by no means guaranteed at the time the plans for the new Bypass were announced. This series of events begs a few critical questions.

  1. Why did the government allow themselves to be manipulated into paying $400,000 / acre for land which
    they had sold less than two years before for $20,000/ acre?
    Our records show communication with at least one commercial realtor whose assessment value for this property established its speculated value to be from $285,000 to $400,000 / acre. It is important to note that this is speculated value, not actual value. This situation is aggravated by the fact that the government in this case could have been entirely justified in annexing the portion of property needed. They could have provided the owner with restitution in the amount he paid for the portion that they dissected from the original package. After all, there were examples of them dealing with several other land owners in such an arbitrary manner. No consideration appears to be given to others for any changes in land value that the proposed bypass would produce. As an example, right
    across the highway, we had land that we were paid $27,500/acre for; 15 times, or 1500% less than Mauri Gwyn. When pressed on this point, the city land appraisers said they cannot use the Gwyn land as a comparable because it is an anomaly. No explanations for what was meant by the term ‘anomaly’ have ever been offered.
  2. How is Mauri Gwyn’s dirt worth more than our dirt?
    In the case of Gwyn developments and the points listed above, the location of the land in question is such that its development potential is limited and therefore its value should be established accordingly. This is unfortunately NOT what took place. For some reason we, the taxpaying public, footed the bill to repurchase 1/5 of the land we originally sold for $20,000 / acre for $400,000 / acre less than 2 years later! If the only rationale was the speculated valuation being placed on this land by an outside commercial realtor, it certainly makes our government appear to be incompetent, foolish or naïve. The only other interpretation some would make is that our governing authorities were in collusion in some way with the present land owner. It makes no sense that any individual would be enriched beyond reason at the expense of taxpayers whose money was being used for the transaction.. Our government is supposed to protect our resources and ensure that they are managed in an equitable fashion. Without explanations, none of this makes any sense. Any way you look at it, the optics are very bad.
  3. What are they trying to hide?
    This pattern of behaviour from our government is inconsistent in the extreme. The majority of people who owned land in similarly placed locations adjacent to the new bypass were being offered between $5-10,000/acre. This was up to 80 times less than what was paid to Gwyn. A serious concern also arises when government agents then demand a non-disclosure agreement from land owners as a condition of payment.
  4. Did our government want to avoid exposure of the inconsistencies in their transaction processes?
    Simple incompetence on the part of our government is putting the best possible face on this fiasco. Any other interpretation of the facts would lead us to conclude that they were in some way being influenced to allow certain developers to reap in unprecedented profits for having contributed little if anything to adding value to the properties they had profited from. In other areas our government exercises it right to deal very arbitrarily with us but that did not happen in this case. an Alberta land appraiser said that the expropriation act in Saskatchewan is archaic and the actions of the government are barbaric in how they are treating land owners
  5. Are these examples of simple administrative incompetence or something more sinister?
    We need to find out!