An internal city review into what went wrong regarding the city’s sale of land located at 4500 Ospika Blvd. to a Vancouver-based developer is ongoing, according to Mayor Simon Yu.
In statement issued last week, the City of Prince George announced that it violated the B.C. Community Charter when it sold the land to The Hub Collection Ltd. in July 2020 for $500,000, by failing to publish statutory public notices regarding the sale. The staff error was discovered in an internal review, after Prince George community group Ginter’s Green Forever questioned the legality of the sale.
“We are looking at all aspects of this deal. We are looking if this is a simple oversight, or a structural issue that caused this oversight, or if it is something to do with this project,” Yu said. “I campaigned on transparency, accountability. I’m taking this very, very seriously.”
The city has a legal obligation, under the Community Charter, to make sure it informs the public when disposing of a public asset like land, he said. Yu said city council has directed city staff to prepare a report on what happened, and what possible changes are needed to the process going forward.
That report will be brought forward to a public city council meeting, he said.
Yu said he and the members of city council are committed to making sure “the process, going from here, is a transparent one,” for the public and developers.
“When that is not done, the optics is absolutely awful,” Yu said.
COUNCIL SHOULD HAVE SAY ON COVENANTS
The original sale agreement between the City of Prince George and The Hub Collection required the developer to build a 256-unit student housing complex on the site.
A copy of the purchase agreement, dated July 29, 2020, says, "The Covenantor will commence construction of the proposed student housing project upon the Property and will have completed framing on or before 24 months following the completion of the purchase of the lands."
On Feb. 6, city council denied a change to the covenant requested by the developer, to allow a 118-unit seniors housing complex on the site instead.
City director of planning and development Deanna Wasnik, said that city administration already modified the original covenant in October 2021, functionally eliminating the requirement for construction to be completed within two years. The amended covenant requires the developer to have begun pouring the foundation within 24 months of the conclusion of the purchase agreement, which they had done prior to stopping construction.
Yu said he’s “not satisfied at all,” with how the covenant on the land was handled by city administration. Decisions on restrictive covenants linked to land sales should be made at the city council level, with input from the city’s professional staff, Yu said.
“The business case study for student housing versus seniors housing wasn’t well studied by the city or the developer (ahead of the sale),” Yu said. “Some incentive was given to them to do that (student housing).”
The City of Prince George's official position is that no incentive was given to the developer and the sale price was fair market value, a city spokesperson said in an email.
Yu said, as he understands it, while the land was assessed at $682,000 in its 2019 and 2020 by BC Assessment, city staff determined the fair market value at $500,000 because of topographical issues – including a 1.09-hectare ‘no-build’ area on the 2.28 ha lot- and a lack of services.
A deal to sell the land to a different developer for a price closer to the assessed value fell through, Yu said, before the city sold the land to The Hub Collection.
NO COMMENT ON POTENTIAL JOBS IMPACTED
In the statement issued last week, the City of Prince George said “took immediate remedial action, including undergoing a restructuring and rebuilding of the City’s real estate division.”
Yu declined to comment on if any city employees lost their job as a result of the internal investigation. When an organization the size of the City of Prince George restructures a department, “that does not necessarily mean we are chopping jobs,” he said.
Yu said he would like to see greater communication and coordination in the city’s real estate management division to include “more people with technical know-how,” in land decisions.
Although nobody wants an oversight like this to happen, Yu said, it provides an opportunity for the new city council to take a good look at the city’s procedures regarding land sales.
A city spokesperson could not provide any comment on potential jobs lost as a result of the restructuring as of Thursday afternoon.
