St. John's city council has formally started the process of expropriating a parcel of land owned by Scouts Canada, to the consternation of the owner and the non-profit health group that had already agreed to buy it after council's bid was deemed too cheap.

Councillors voted at Monday evening's meeting to start the expropriation process of the land and building on Terra Nova Road, with councillors saying that Scouts Canada will ultimately receive fair market value.

George Skinner

CMHA executive director George Skinner said the organization had high hopes for the Scouts Canada property on Terra Nova Road. (CBC)

Scouts Canada had only recently come to an agreement with the Canadian Mental Health Association to sell the building and land, which the city wants to use for future expansion. The land is sandwiched between the old Metrobus depot and Wishingwell Park.

Deputy Mayor Ron Ellsworth said while the city wants the land, it also wants to ensure that Scouts Canada gets a good deal in the process.

Coun. Art Puddister said it was in the city's best interests to once again own the land.

"We have Metrobus property on one side. We have a park on the other. It's an excellent fit for the taxpayers," Puddister said.

"This piece of property, which I consider to be a valuable piece of property, should stay in public ownership. We could refurbish that building and have one of our stand-alone departments be located there."

If the City of St. John's cannot reach a deal with Scouts Canada on a fair price, the issue would be sent to the Public Utilities Board.

City bid was below appraisal

Scouts Canada appeared to be caught off guard about the city's plans.

David Connelly, a member of Scouts Canada's national board of governors, said the organization did not know of the city's plans until seeing a CBC News report.

Connelly said the city had submitted a bid for the land, but Scouts Canada rejected it because it was well below the property's appraised value.

"I believe it's on public record that the Canadian Mental Health Association offered, and Scouts Canada accepted, a price of $770,000, so obviously that's the market price," Connelly said.

The board voted last week to accept a bid from the Canadian Mental Health Association because it was "the responsible thing to do." He added the organization has already incurred costs on legal and real estate fees for the intended sale.​

"There's going to be some inconvenience, I think, to both those organizations — legal costs and so on — as we undo that deal and presumably are required under a statute to enter into a new contract with the city," he said.

Connelly said he's hopeful any expenses incurred by Scouts Canada and the CMHA will be added to the money the city gives the Scouts for the land.

George Skinner, executive director of the Canadian Mental Health Association, said his organization also learned of the city's plans through the media.

Skinner said the site was selected because of its central location in St. John's, as well as its proximity to Memorial University, local hospitals and other services.

'Great opportunity' lost

"My disappointment is that CHMA and mental health need to be profiled in the community, and we [will now] lose a great opportunity to profile mental health and mental illness in the way it should be profiled, in the heart of our city," Skinner said in an interview.

"Unfortunately, it shows us that council, as well as other people in the system just don't accept mental health as it should be accepted,” he said.

Skinner said the CMHA was aware that the city could expropriate the land, but there had been no discussions that it might happen.