Winnipeg Mayor Sam Katz was grilled by reporters on Thursday about a property he purchased from the sister of an executive from Shindico, a major local developer.
CBC News has learned that Katz acquired a home last month in Arizona from the sister of Diane Shindleman, Shindico's chief financial officer.
Documents filed with the Maricopa County Recorder's Office in Phoenix show that Katz acquired the house, in the Windgate Ranch development of Scottsdale, Arizona, from Teri Nordstrom on Aug. 23. The house previously sold in 2008 for nearly $1.6 million US.
Nordstrom is the sister of Diane Shindleman, who is married to Shindico president Sandy Shindleman and is the company's chief financial officer.
Shindico has been involved in a number of controversial real estate deals with the City of Winnipeg in recent months.
On Thursday, Katz said there was nothing wrong with the transaction and he paid fair market value for the Scottsdale home.
When asked by reporters where he got more than $1 million to buy the house, Katz listed his business successes, including his work as a promoter and property owner.
"When I became mayor, I sold off all of my property. So you know what? If you work hard, wonderful things can happen," he said.
Katz refused to describe his relationship with Nordstrom, and he would not say when he took possession of the 4,500-square-feet house.
"The most transparent thing I did was exactly what I did. Bought a home, it's in my name, end of story. Paid fair market value," he said.
"So, you know, I think there comes a point in time where, God willing, this will come to an end."
'Does not seem proper,' says ethicist
But Arthur Schafer, an ethicist with the University of Manitoba, says he is concerned there is not enough separation between Katz's personal interests and the public interest.
"It does not seem proper," Schafer said in an interview.
"It is really worrying, and it does breed cynicism and it undermines public trust. And our mayor, it seems, just does not get it. That's worrying."
In a prior statement emailed to CBC News, Katz said, "I own a home in Arizona, like many other Manitobans."
In a later interview, he added, "The difficulty with your question is as soon as you ask it, it starts innuendos which have no validity."
Katz said he paid more than $1 million US for the house, but refused to explain the deal in any more detail.
"[The mayor] should disclose all of his financial dealings with Shindico family members, shareholders and anyone who stands to benefit at the Shindico end," Schafer said.
Councillor wants changes to law
Manitoba's Municipal Conflict of Interest Act does not require members of council to disclose properties they own outside Winnipeg.
River Heights Coun. John Orlikow said he had asked the provincial government in January to amend the Municipal Conflict of Interest Act to include the province of Manitoba.
Orlikow said he will now be asking the province to require council members to disclose properties anywhere in the world.
"Those relationships travel with you, and what impact does that have back in Winnipeg?" he told CBC News on Thursday.
"That's why disclosure is so important." When asked if he would consider buying a house from a someone who does business with the city, Orlikow said he would not risk the perception of a conflict of interest.
"I think there are a lot of homes available in Arizona," he said. "My duty as a public servant is to not do that."
Arizona property records do not show how much Katz paid for the house. There are no records of mortgages or liens on the home.
Most property sales in Arizona require an affidavit to be filed publicly, outlining the sale price and method of financing.
But the Katz-Nordstrom transaction relied on an exemption from filing that information.
One reason for exempting the price disclosure, according to Arizona law, is if the sale is a non-arm's length transaction.
Home cost around $1.6M in 2008
Nordstrom, who lives in Parker, Colorado, bought the home brand-new from the developer in 2008.
She paid close to $1.6 million US in cash, a transaction that The Arizona Republic newspaper reported under the headline, "The Valley's priciest home sales."
When Nordstrom bought the Scottsdale home in 2008 her husband, James Nordstrom, signed away any rights he had to the property.
Teri Nordstrom did not return calls from CBC News requesting an interview.
Current municipal taxes on the property are around $7,000 US per year, according to Maricopa County Treasurer records.
Property tax records for the home have been sent to Teri Nordstrom, care of Katz's home address in Winnipeg's Tuxedo neighbourhood, since 2011 — at least 11 months before records show he became the owner.
A city directory for Phoenix lists Katz at the Windgate Ranch address since 2008.
The house features six bathrooms, a covered patio and a pool. It's enclosed in a gated community and surrounded by vacant lots, according to online real estate websites.
But Katz does have next-door neighbours — George and Joan Bell live in the adjacent house.
George Bell is a longtime business partner of the City of Winnipeg's top bureaucrat, chief administrative officer Phil Sheegl, according to Arizona Corporation Commission records.
Katz never recused himself
Just days after Katz acquired the deed to the house from Nordstrom last month, he told Winnipeg radio station CJOB that his relationship with the Shindlemans is "not much different than my relationship with you except for one thing: they do own some shares in the Winnipeg Goldeyes. End of story. That is pretty public knowledge."
Katz has repeatedly stated that his relationship with the Shindlemans does not constitute a conflict of interest.
On at least eight occasions, Katz was present when Shindico business was on the city hall agenda.
This past January, Katz made the motion to accept an executive policy committee report for a Shindico project involving the subdivision and rezoning of 55 Rothwell Road to build a Mercedes-Benz dealership.
Katz has never recused himself in public meetings due to a conflict of interest involving the Shindlemans.
Katz had previously purchased at least four other properties in Arizona and records show those had been financed with mortgages. One mortgage came close to foreclosure in 2009.
Although Nordstrom bought the house in Arizona with cash, she and her husband hold a $270,000 US mortgage on her Colorado home, which tax assessors value at about $400,000 US.
Diane and Sandy Shindleman did not respond to a request for an interview.
Katz's Scottsdale properties
10346 E. Karen Drive
- Purchased: November 1999.
- Cost: $215,212.
- Downpayment: $64,564. Financed rest.
- Sold: January 2003 for $259,000.
9555 E. Raintree, Unit 2038
- Purchased: February 2000.
- Cost: $152,303.
- Downpayment: $56,883. Financed rest.
- Sold: December 2002.
Notes on the Raintree property:
- Katz sold 50 percent interest in the condo to Phil Sheegl’s Winnix Properties Corporation for $85,000 US.
- This transaction was prior to Katz’s term as mayor and Sheegl's as CAO.
- Winnix sold the condo in 2004 for 197,500.
Camello Vista Condo
- Purchased: November 2003.
- Cost: $175,000.
- Downpayment: $33,500. Financed rest.
- Sold to his brother, David Katz, in December 2003 for $0.
9156 N. 114th Street
- Purchased: October 2004.
- Cost: $837,500.
- Downpayment: $173,500. Financed rest.
- Sold: April 2010 for $525,000.
- Purchased: August 2012.
- Cost: No documents disclosing the price paid are in the public record but Katz told CBC News he paid more than $1 million. It is mortgage-free.
(Source: Maricopa County Recorder's Office. All prices are in U.S. dollars.)
- Home sale affidavit, Windgate Ranch, 2008.
- Deed transfer from Teri Nordstrom to Sam Katz.
- Property tax bill sent to Teri Nordstrom care of Sam Katz's Winnipeg address in 2011.
(Source: Maricopa County Recorder's Office)