The city's questionable real estate dealings are going to be investigated by the RCMP.

Audits looking at the fire hall land swap, construction of the new police HQ and other real estate deals have been passed on to Manitoba RCMP to determine if there are grounds for criminal charges.

The province confirmed Friday morning it has referred reports to RCMP. Mayor Sam Katz said he supports the province's decision.

Canada Post winnipeg police hq

The former Canada Post building on Graham Avenue is being redeveloped into a building that will house the Winnipeg Police Service's new headquarters, but costs have mushroomed since initial construction projections were released prompting concerns. (CBC)

Initial reviews on this series of files found city procedures weren't followed or didn't exist. It was also found that some companies may have received preferential treatment in terms of how contracts were awarded to different parties

Greg Graceffo, Manitoba's assistant deputy minister of justice, said the province assembled a team in July after Winnipeg city council voted to ask the province to look at the audits.

"This is now in the hands of the RCMP and they will take it where the evidence leads them," he said. 

Graceffo said this type of review and referral to RCMP is standard practice for the province.

"These are serious matters," he said. "They affect the citizens of the city and indeed the province. We would not be doing our jobs if we did not take these things at face value."

Graceffo said a team was assembled in July, but once it looked at the audits and reviews sent over by the city, it made the decision to call in the RCMP. 

"The department took this very seriously. We brought a number of different minds to the table to assess the material that we had been given and other materials that we had ... in reaching the decision to make the referral to the RCMP," he said. 

Graceffo said the RCMP were chosen to avoid any conflict of interest, since one of the reviews involves the new headquarters for the Winnipeg Police Service.

Justice officials said it's far too premature to speculate on the outcome of any investigation.

Reaction from mayoral candidates swift

Mayoral candidate Brian Bowman applauded the news RCMP are looking into the way city hall has been doing business. 

"This is the elephant in the room right now for a lot of us that are campaigning [and] for a lot of Winnipeggers," he said. "Anything that can be done to restore Winnipeggers' trust and faith in their city hall is important and this is going to be one of those steps."

Bowman said the most important decision facing the next mayor is who to appoint as the city's next Chief Administrative Officer (CAO).

"The CAO, I think, is the most important position," said Bowman. "Obviously for the City of Winnipeg administration, but let's make no mistake about it, the leadership starts at the top and it starts with the mayor."

Charleswood - Tuxedo Coun. Paula Havixbeck, also a candidate in the mayoral race, said the city's previous audits and reviews should have talked to many key people, but didn't.

"Now somebody will listen and will go in those directions and I think that that is really important and will make a difference," she said. 

Former St. Vital Coun. and current mayoral hopeful Gord Steeves said it's a serious development that police are now involved. 

"I guess not a happy day for our city if that's the step that has to be taken," he said. "But if that's the step that the authorities feel has to be taken, obviously I will do what I can as mayor to co:operate," he said. 

Relief, hope for closure in other reaction from city hall

Mayor Sam Katz said in a statement all of city council would support the decision to call in the RCMP and he hopes it brings closure.

Mynarski Ward Coun. Ross Eadie say he's relieved the city's questionable real estate dealings are going to be investigated by the RCMP.

"I think there is some high potential for some criminal activity ... fraudulent activity," he said. 

Eadie was one of the councillors tasked with finding a new Chief Administration Officer.

"Anyone who becomes the mayor, and anybody who is on the new council, we need to build a better relationship with the administration, in which we can all trust each other, because that has been the biggest issue for me as a councillor," he said. 

Eadie said the committee has voted to hold off hiring a new CAO until the new mayor is elected.

Fire hall scandal

The proposed fire paramedic station was cast into the spotlight in 2012 after CBC first reported the city was building a new fire station on Taylor Avenue on land it did not own in exchange for three other properties with land developer Shindico. 

Project costs for the the police headquarters have ballooned since original projections. 

In 2009, the project was forecast to cost $135 million. But by fall of 2013, city council learned the costs had mushroomed to $210 million.