POLITICS

B.C. 'hosed' in Coquitlam land sale to Liberal donor

04/14/2015 03:45 EDT | Updated 06/23/2015 02:59 EDT
VICTORIA - The Liberal government sold valuable Crown land in Metro Vancouver to a party donor at a greatly reduced price and used the money to help balance the budget, the Opposition New Democrats said Tuesday.

NDP justice critic Mike Farnworth said British Columbians were "hosed" when the government sold about 150 hectares of property in Coquitlam for $85 million when the land was appraised at $128 million.

Wesbild Holdings Ltd., founded by businessman Hassan Khosrowshahi, paid $43 million less than the appraisal price for 14 pieces of property on Burke Mountain, east of Vancouver.

The NDP said Khosrowshahi donated $228,500 to the Liberals individually and through his companies since the sale, and $934,664 since 2000.

Wesbild or Khosrowshahi could not be immediately reached for comment.

"We got hosed," said Farnworth, adding the sale didn't make sense.

A Metro Vancouver homeowner would never sell their home at such a drastic price drop, Farnworth said.

"Let's take that $128 million that they said the land is worth and turn it into $1.28 million, which might be good value for a home on the east side of Vancouver," Farnworth said.

"What person with a home appraised at $1.28 million is going to sell it for $850,000 and leave $400,000 on the table. Would you do that?"

University of B.C. Sauder School of Business Prof. Thomas Davidoff said Farnworth's comparisons may need deeper analysis.

Vancouver's market is red hot and single homes can sell within hours at above-asking prices, but selling huge, multi-parcels of land for development outside the city attracts fewer and different buyers, he said.

But Davidoff said the government should have to answer why it sold the 14 properties in one deal instead of individually or in smaller parcels and why it chose to sell quickly and didn't wait.

"Taking a discount to unload the stuff does kind of have the smell arguably of trying to get it off the books fast so you could count it for the budget," he said.

Finance Minister Mike de Jong mentioned that government sales of surplus properties helped balance the books when he introduced the 2013-2014 budget, which was forecast to deliver a surplus of $197 million.

Documents show the government included $50 million from the Wesbild deal in the 2013-2014 budget and $35 million in the 2014-2015 budget.

NDP Leader John Horgan said one lot was appraised at $5.6 million, but sold for $100,000, a price unheard of in Metro Vancouver.

He also said taxpayers may have to buy back two lots so the government can build schools.

"What possibly went wrong when we had $128 million worth of property, and to meet your single-year budget objectives, you sold them for $43 million less than they were worth?" Horgan asked Amrik Virk, technology, innovation and citizen's services minister, in the legislature.

Virk said 800 units of housing will be built on the Burke Mountain property, creating about 4,500 full-time jobs and more than $20 million in regional and municipal improvements.

Government documents connected to the deal indicate there were six offers for the properties. They ranged from interest in two pieces to Wesbild's offers for all 14.

"Wesbild's offer for 14 properties for $85 million was determined to be the best offer based on lowest risk, most comprehensive bundling of parcels, and greatest benefit to the community," said the document by the Ministry of Forests, Lands and Natural Resource Operations.

Virk said the government decided to take Wesbild's offer.

"That's the best offer that came forward," he said.

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