WHY IS DEVELOPER’S DIRT FOR THE REGINA BYPASS WORTH 80X MORE THAN OTHER’S DIRT?

Readers should note that the information presented in the following article is all a matter of public record and can be accessed either through ISC or the Saskatchewan Land Titles office. We offer only the facts as we have collected them and leave the reader to draw their own conclusions.

Beginning in 2012, a number of interesting transactions between the department of highways and a private developer took place. At the time Mauri Gwyn Developments had previously built a residential subdivision adjacent to the intersection of Highways #1 and #48. With the introduction of the new Highway No. 1 Regina Bypass plan, Gwyn Developments Ltd. would require an easement be put in place between their property and the Regina Bypass. Consequently, in 2012 Gwyn Developments Ltd. Purchased approximately 7.49 acres from the department of highways at the cost of $20,000/acre totaling $150,000 in order to satisfy this requirement. It is interesting to note that 3 years later Mauri Gwyn Developments Ltd., was able to sell 2.32 acres out of the same parcel of land back to the government for $400,000/acre as an additional berm and fence would be required to be put in place under the revised bypass plan. This resulted in Gwyn Developments Ltd. Receiving a windfall of $930,113.00 for about 1/3 of the property which they had purchased less than three years before. This transaction resulted in Gwynn Developments receiving a net profit of over $380,000/acre or what would appear to be $882,724.00 in total profit without expense. As over 60% of the remaining land still available to sell, Gwyn Developments has been given an unprecedented opportunity to enhance their financial position as a result of these circumstances and should be congratulated for having so successfully argued their position.

While one could argue that these late revisions carried some unanticipated additional costs, it would seem that in this particular case the government appears to have shot themselves in the foot. Gwyn developments had the good fortune to see their land treated as an ‘anomaly’ due to the impact the bypass revisions had produced. While the rationale for this ‘valuation anomaly’ has not been explained in detail, we can only assume that it was based on the perceived negative impact the revised Regina Bypass route would have on Gwyn Developments plans and related property values in this specific location.

Apparently, these revisions to the Bypass plans and the resulting hardship imposed upon Gwyn Developments found a very sympathetic audience within the government agencies who controlled the related finances. In this particular case, the government had found themselves the awkward position of having sold the same property that they were now ‘forced’ to pay 20 times more per acre to buy a portion of it back less than three years later. Another way to phrase it is to say that our legislators paid one developer over $700,000 more for the same parcel of land they had sold to him less than 3 years before. To the uninformed it would appear that the land in this instance would not have been useful for development purposes regardless. Both before or after the revised Bypass Plan had been established, this land would appear to have been designated as an easement or berm (buffer zone) as would be required between the highway and any civic or residential development. Although this seems like a lot of money for a ditch, we are left to assume these requirements had a major impact on Gwyn Developments circumstances.

With this precedent now set, other land and business owners attempted to argue that they had been placed in a similar position due the impact the revised Highway No. 1 Regina Bypass location would have on future plans. We felt that we should be able to assume prior to these revisions, the land owned by Gwyn Developments would have been valued similarly to that of others whose locations were also about to be impacted by the proposed new Regina Bypass. In our particular case, the new Bypass plan would radically alter the footprint and access to our property and prevent us from completing a critical expansion of our business while significantly devaluing the remaining portion of property. This would make relocation impossible without us accessing major additional financing. We had invested heavily in new specialized equipment which was now in storage awaiting a new facility large enough to accommodate it. With the expropriation of significant parts of our property, we could no longer fulfill this objective.

A PRECEDENT WAS ESTABLISHED

Referring again to the Gwyn Development case, we do not claim to know the details of all factors in the agreement between Gwyn Developments and the Bypass authorities, but it would appear that on its face the changes to the Bypass plan were recognized as having a significant detrimental effect on this developer for which he deserved to be compensated. We maintain the position that ourselves and others have not been treated equitably in light of this precedent.

THE PRECEDENT WAS IGNORED

In contrast to Gwyn Developments, we were made an arbitrary offer of $27,500/acre for a critical portion of our property that if removed, would severely effect our plans. (This is the White City land across the Highway from Mauri Gwyn) To further aggravate the situation the offer also came with a demand for non-disclosure as a condition prior to receiving any payment. This offer certainly pales in comparison to the $400,000/acre that was paid to Gwyn Developments. Why aren’t people being treated fairly and receiving the same amount? We would not have expected in our wildest dreams to receive that kind of compensation. We would however, have expected better consideration than that which we received. It seems unfathomable that land which has no useful purpose other than that of a buffer zone should be worth more than land that would have accommodated more industry diversification and employment within our community. When one considers the value difference assigned to the dirt in either location, it should not be unreasonable to demand a better explanation as to the formula used for their evaluations. We have since been told that such a comparison cannot be made as the Gwyn Developments example is an ’anomaly’ and therefore not relevant. From the outside it would appear that the ’anomaly’ was the government putting itself in an embarrassing position of having to sell and buy back its own land at an exorbitant premium, and then trying to avoid the precedent that it has set in the process..

When one considers the history of these transactions, it should not be too difficult for the reader to understand our frustrations. We were motivated to get answers to our questions about the land transactions which took place and also answers for the rationale behind the changes to the Regina Bypass plans that precipitated many of those transactions. We have since discovered other ’anomalies’ that have resulted in significant financial gains made by several who appear to be either extremely fortunate, extremely astute or simply extremely well connected. Several others have not been so fortunate.

We feel it is important to draw attention to these details for several reasons.

1. All the money provided for this infrastructure comes from Saskatchewan taxpayers.
2. We should be entitled to know how and why it is being spent.
3. We should also have full access to the results of research that we are paying for
4. There needs to be more oversight as to how land transactions between private individuals, corporations and our government authorities are conducted. The same rules should apply to all.
5. Unless it is a matter of national security, under no circumstances should authorities demand nondisclosure agreements from taxpayers when it is their money being used to fund purchases.

We intend to continue in our efforts to hold our elected officials accountable and responsible. We will offer our story to the media in all its forms along with any politician who will take the time to consider and reflect upon the circumstances we have outlined.

We have more to say on this matter and we invite our readers to follow us on our website where a petition is available should you agree and want to see some action on the part of our elected officials to address these concerns.