Crews are currently working to build a luxury tower on a patch of land the City of Vancouver traded away with no competitive bidding and no certified appraisal.
“Would we sell our home without using a professional broker or getting a professional appraiser?” Kerry Corlett of the Community Association of New Yaletown asked. “Of course not, because we’re entitled to get top dollar. The citizens of Vancouver are entitled to get value for what we collectively hold.”
In 2013, the City swapped its Yaletown property for a brand new social housing complex across the street worth $40 million. In return, developer Brenhill gained the right to build a 35-storey tower on the city’s former land.
That land is now assessed at $90 million.
“It’s always easy to look back and say five years ago, we should have done something different,” city manager Sadhu Johnston said in January when Global News asked the city about the discrepancy in value. “Had we known the value was going to change in the way it did across Vancouver, we might have had a different arrangement.”
But Global News has learned Brenhill commissioned its own appraisal of the city’s property in February 2013, a month after signing the deal with the city. According to BC Housing documents, the city’s land was estimated to be worth $80 million once rezoned, double what the city got in return.
Through the year-long negotiations, the city never requested a certified appraisal.
“If we had known the information, that this property was worth tens of millions more than we understood it to be, we would have extracted that, or a fair share of that, for the public,” Coun. Adriane Carr said.
Global News asked the city whether any staff members saw Brenhill’s appraisal. They said they have no record of it and directed us to the city’s former head of real estate, Michael Flanigan, who wasn’t available for an interview.
Flanigan became aware of the appraisal in October 2013 after he left the City of Vancouver to join BC Housing.
Citing a lack of transparency, Corlett’s Community Association of New Yaletown took the city to court over the deal and won but the decision was overturned in the Court of Appeal.
Still, Corlett believes there are many unanswered questions.
“Is the City of Vancouver naive or inept, not realizing how much the value of this property was? Or is there something else going on? That’s what we wonder,” Corlett said.
A 2015 review by Ernst & Young deemed the land swap a fair deal, but recommended “improvement opportunities with the city’s decision making, assessment and approval processes should be pursued to promote reliability, transparency and accountability.”
The city has since tightened up its internal controls, including undertaking third-party appraisals to ensure all city land deals provide the best value for taxpayers.
– With files from Tanya Beja and Jill Slattery