Nfld. & Labrador

Jonathan Galgay asks for investigation into I.J. Samson sale

In a letter sent to the Auditor General Terry Paddon on Friday, Jonathan Galgay asked the office to "review the handling of this file, and all processes with the tendering and sale of former school properties in the City of St. John's."

School building re-listed for 10 times its summer sale price

In a letter sent to the Auditor General Terry Paddon on Friday, Galgay asked the office to review the handling of the file. (Jeremy Eaton /CBC)

St. John's City Coun. Jonathan Galgay has asked the province's auditor general to investigate the controversial sale of the I.J. Samson building.

In a letter sent to Auditor General Terry Paddon on Friday, Galgay asked the office to "review the handling of this file, and all processes with the tendering and sale of former school properties in the City of St. John's."

"In particular, I request that you review the tendering process and oversight regarding this transaction," Galgay wrote.

The I.J. Samson school property was sold for $189,000 in June through a tender process by the Newfoundland and Labrador English School District, despite the property's worth being assessed at more than $2 million.

The sale has drawn criticism, notably from Galgay himself, since the new owners re-listed the property in September, asking $1.89 million.

Controversial sale

​Companies owned by Terrence Penney — Metro Environmental Services and Whiteway Holding — bought the building during the summer. Estimates to remediate the grounds are in the $1 million range. 

The I.J. Samson school building, at 50 Bennett Avenue, closed in 2011. (Google)

The real estate agent tasked with flipping the property defended the process, and said the eventual sale of I.J. Samson will benefit the City of St. John's.

"There's a lot of positives to come from this," Jim Burton told CBC Radio's St. John's Morning Show. "You have to look at what's going to go on this property. At the end of the day, it's something that will be conducive to the neighbourhood." 

Burton said the new $1.89 million price is competitive with other land in the city, and added "fairness was brought to the table" through the open tendering process for the building.

Tax payoff possible

Burton said he hoped the eventual owners of the I.J. Samson property, located at 50 Bennett Avenue, would turn the land into a small housing development — something that would bring a tax benefit to the city.

"If you put approximately 20 homes on that particular piece of property, and they sold for...$325,000 — that's a tax yield to the City of St. John's for $6.5 million." 

At the end of the day, it's something that will be conducive to the neighbourhood.- Jim Burton

After Galgay said he was disgusted by the handling of the property, Burton, the head of ReMax Infinity Realty took aim at the councillor directly.

"I think people should be careful of their comments. In a time where, I think, the City of St. John's needs to have a sign down there on their building [that says] open for business."

"In a time where it's a little challenging to get developments airborne, this is an opportunity for growth in the city."