Nfld. & Labrador·CBC Investigates

A 'mini boondoggle' or necessary development? How a land deal divided this N.L. town

In a town known more for skiing than squabbles, an internal battle in Steady Brook has spilled over into a provincial investigation.

Steady Brook under investigation for buying private property to split and sell off

Bill Dawson is a Steady Brook town councillor who has led the fight over the Willow Avenue land. (Lindsay Bird/CBC)

A picturesque community in western Newfoundland is locked in an ugly battle, with its council and residents divided over Steady Brook's decision to wade into the waters of private land development.

It's a decision that has sparked a provincial investigation, internal bitterness, and serves as a cautionary tale for other municipal governments in the province.

The matter relates to a seemingly tranquil plot of land in the centre of town: 4-10 Willow Ave. It's currently occupied by a vacant bungalow in disrepair, a few sheds and lot of weeds, all on a swath of land that could easily pack in several more homes.

Actually six homes, according to the Town of Steady Brook, which in a six to one vote on Nov. 9, 2017, decided to buy the property with the intent to subdivide it and sell it off.

But the council hasn't been able to follow through on those plans.

After a faction of residents spoke out, the Department of Municipal Affairs got involved and in late 2018 launched an investigation into the purchase that continues to this day. Meanwhile, the dandelions go to seed on Willow Avenue and the clock ticks on the town's time-sensitive interest-free mortgage.

The only property on 4-10 Willow Ave. is vacant and needs repairs. (Lindsay Bird/CBC)

"This borders on a mini boondoggle," said Bill Dawson, one of the Steady Brook residents upset over the purchase, and who has since become a town councillor in a byelection.

"We are out taxpayer dollars."

Chunk of change

Compared with the Muskrat Falls megaproject that made "boondoggle" a household phrase in Newfoundland and Labrador, the numbers involved in Steady Brook are much smaller in scale.

The town spent $455,000 for the Willow Avenue land. There is a mortgage for $200,000, and the other $255,000 came out of the town's reserve fund. In relative terms, it's a big chunk of change — in total, about half of Steady Brook's annual budget.

It's become mean, harassing, divisive in the community.- Mayor Donna Thistle

But it's not the amount that's the most maddening aspect of the deal to Dawson. 

"I don't think any resident ever expected us to become developers, land developers," he said.

Dawson is particularly concerned that part of the land sits in a flood fringe zone, which means more stringent environmental regulations on any potential infrastructure.

"It's not something we have the expertise to be doing," he said. "We are for the most part volunteers. And we should leave that expertise to those private developers. They're the ones who are going to risk their money."

'Shepherd' development

In an interview with CBC News, Mayor Donna Thistle said buying the land was the best option for the bedroom community to be able to grow its tax base, which currently sits at 444 residents.

Steady Brook is hemmed in by the Humber River on one side, and the Trans-Canada Highway and Marble Mountain on the other, with few plots of land left for new housing.

"We thought, well, if we buy it now, that would stop somebody who was — let's say somebody is really wealthy, they could buy that piece of land and put one house on it. So the opportunity loss of getting the new building lots in Steady Brook would be gone," Thistle said.

Mayor Donna Thistle stands by the purchase, which she says is the best way to usher in new development for the town. (Lindsay Bird/CBC)

The property next to 4-10 Willow Ave. had just sold to a private developer, who wanted to put a six-house subdivision there. By buying 4-10, the town would then be able to make sure the proposed 12 lots had proper roads instead of hard-to-snowclear cul-de-sacs, said Thistle.

"There was never an intention for Steady Brook to become a developer. It was to shepherd through a development," she said.

The Municipalities Act does state that towns have the authority over public roads regardless of land ownership. Thistle maintains buying the property outright was the best option to oversee Steady Brook's infrastructure needs.

"I completely stand by the fact that this was a good decision for the town of Steady Brook long term," said Thistle.

Residents divided

But Thistle's enthusiasm for the project has taken a hit as the controversy has grown. Three councillors have resigned since the purchase, and a petition is circulating asking for the others to step down.

"It has become personally punitive," Thistle said. "It's become mean, harassing, divisive in the community."

That divisiveness was on display at June's monthly council meeting, when about 40 residents packed the community hall for the latest municipal updates and a series of barbed back-and-forths between Thistle and Dawson.

Half the crowd cheered for an openly emotional Thistle as she defended the property purchase and strove to highlight other areas of growth in the town. 

About 40 Steady Brook residents attended a town council meeting on June 13. There is a split in the western Newfoundland community over a land purchase that is now under review by the province. (Lindsay Bird/CBC)

After her speech, Dawson stood and repeated his concerns over the property, with half the crowd clapping for him. 

As people filed out after the two hours of municipal debate, their opinions were similarly split.

"I support the decision. I think it was a good idea in order to be able to control the development," said resident Jerry George.

"I'm dead set against it, and I was shocked when I found out," said Peter Rowsell, a resident and former mayor.

Both sides unhappy with Municipal Affairs

Municipal Affairs aligned, in less dramatic language, with that latter sentiment.

In May 2018, then-minister Andrew Parsons wrote to the town, stating Steady Brook hadn't followed several sections of the Municipalities Act, including buying land and financing it without provincial approval. Parsons recommended training around land acquisition and accounting.

After receiving more complaints, the department under then-minister Graham Letto announced an investigation into 4-10 Willow in December 2018. 

The actions of Municipal Affairs have managed to create a little common ground between Thistle and Dawson, with both parties stating the province has played a part in the property problem.

While accepting the town does share some blame in the purchase, Thistle said the department was fully aware of Steady Brook's actions, citing specific conversations and requests for help with civil servants before any money ever changed hands.

Lisa Dempster, left, was sworn in as the minister of municipal affairs last month. She became the fourth person to hold that portfolio in the past year and a half. (CBC)

Added to that, the department has seen four ministers — Eddie Joyce, Parsons, Letto and now Lisa Dempster — at the helm since the sale was made. Thistle said that, along with internal staff upheaval, has exacerbated matters.

"This whole thing is a problem with a staff change at Municipal Affairs, four separate ministers, all of whom wanted to, you know, get rid of an issue, and didn't really think through or ask enough questions of the people who had the information, to make an informed decision," she said.

"It's a rat's nest right now, of communications, and who knows what."

For his part, Dawson said the Municipalities Act has no teeth, and the department itself lacks an enforcement wing to police the hundreds of communities in the province in a swift and thorough manner, leaving it largely to concerned citizens to bring complaints to light after the fact.

'Completely in limbo'

Six months since launching its investigation, there is little in the way of updates from Municipal Affairs.

The department, now under minister Lisa Dempster, declined an interview with CBC News, but in a statement said "there is no standard time frame for these type of inspections, and they can range from several weeks to several months."

The department cited that ongoing investigation in declining further comment.

In the meantime, the town is concerned about the $200,000 mortgage it took out as part of the deal. Two years of interest-free payments began in January 2018, or until the first lot is sold. The interest-free period expires in six months.

"We are completely in limbo," said Thistle.

The town has repeatedly asked the province for permission to sell the land. Thistle said the entire affair has hindered the town's ability to plan.

Dawson too wants to move on and focus on other municipal matters, such as the town's notoriously troubled water supply.

"It's a sad situation," he said.

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About the Author

Lindsay Bird

CBC News

Lindsay Bird is a journalist with CBC Newfoundland and Labrador, based in Corner Brook.