Sam Katz

Mayor Sam Katz says it's unfortunate that expropriation may be the only way the city can get the Taylor Avenue land, as it may ultimately cost taxpayers more money in the end. (CBC)

City of Winnipeg staff who allowed a fire hall to be built on land the city didn't own may face repercussions, warns Mayor Sam Katz.

Katz said he and his political colleagues are considering ways to deal with bureaucrats who were involved in the fire hall land swap that became the subject of a scathing audit.

"When you build something on someone else's land, that is the kind of mistake that I can easily see following into that category of repercussions," he told reporters.

"That's the kind of mistake that should not be made."

Council's executive policy committee voted on Wednesday in favour of starting expropriation proceedings to take possession of the land at 1780 Taylor Ave.

The city built a fire hall on the property, which is owned by local developer Shindico.

St. Norbert Coun. Justin Swandel was the only member of the committee -- the mayor's cabinet -- to vote against launching the expropriation process.

Council as a whole must give its approval before the process can begin.

The audit was ordered after city council killed a deal that would have seen Shindico, a local developer, exchange the Taylor Avenue land for three other city-owned properties.

The audit report said Shindico received special treatment and named Phil Sheegl, the city's former chief administrative officer, as a key figure in the controversy.

May cost taxpayers more

Katz said he's regretful that expropriation may be the only way the city can get the Taylor Avenue land, as it may ultimately cost taxpayers more money in the end.

The mayor added that allowing the land deal to go ahead was a serious mistake and there should be accountability for the situation, but no one has been penalized to date.

"No, it hasn't happened to date. That's not to say that's something that may not happen," he said.

"Do not think for a moment … those are not the kind of conversations that come up."

Last week, the city announced that negotiations with Shindico have been at a stalemate.

There is still an opportunity for the city and Shindico to negotiate an agreement even if the expropriation process is underway.

According to a report from city bureaucrats, the city appraised the land at just over $1 million, while Shindico assessed it at $1,232,200 and added $844,220 to cover an alleged loss in property value next door to the fire paramedic station.

Katz's friendship with Sheegl questioned

Meanwhile, Katz was peppered with questions on Wednesday about his continued friendship with Sheegl, who resigned as CAO just days before the fire hall land swap audit report was released.

"I would say we're still friends. You know, we just don't see each other a lot, but yeah," he said.

Sheegl and Katz were reportedly spotted getting off a plane from Phoenix on Tuesday, but the mayor insisted that they weren't travelling together.

"No, I was travelling back by myself. He may have been with his wife — that's his prerogative — and there was also probably another 240 people on the flight," Katz said.

Many councillors had demanded Sheegl's resignation for his role in the fire hall land swap controversy and massive cost overruns for the construction of a new police headquarters.