Email shows Bill Boyd and premier's office were 'concocting a scheme' to pay too much for GTH land, NDP says
Critics say email shows Boyd decided to pay a high price for land - then found evidence to justify decision
A single sentence in a high-level internal email the government has been trying to keep from the public appears to contradict what Bill Boyd and the premier's office have been telling Saskatchewan people about the Global Transportation Hub land deal for the past 19 months, says the provincial NDP.
Since the story came to light in February 2016, Boyd and Premier Brad Wall have claimed the GTH had to pay Regina developer Anthony Marquart far more for the now-notorious 204 acres than government appraisals indicated because Marquart had a high-value appraisal that forced the government to cut a bigger cheque.
Nicole Sarauer, the NDPs interim leader, said the email seems to show that before senior government officials received Marquart's appraisal they had already decided to pay the developer more than government appraisals indicated. Marquart's appraisal, the NDP said, was merely a convenient way to justify that move.
On Nov. 11, 2013, Boyd's advisor Laurie Pushor wrote to Boyd, who was the minister responsible for the GTH and Joe Donlevy, chief of staff to the Premier, saying Marquart's high-valued appraisal "makes a case for our position."
"It looks like a decision had been made prior, as to what the range of price was to be," said Sarauer. "They were concocting a scheme to rip off taxpayers dollars and they were hoping that they could ram it through cabinet and push it past prominent cabinet ministers and they did," Sarauer said.
Highways was prepared to expropriate Marquart's land
In February 2013, Marquart purchased the 204 acres for an average of $80,000 per acre.
Ministry of Highways officials thought Marquart dramatically overpaid.
Jeff Grigg, who at the time of these transactions was a senior official with the ministry, said the purchase was nonsensical because it was common knowledge at the time that the government was planning to build a bypass right through that property, making the land essentially unavailable for development.
"Any proposed subdivision against a provincial highway — that's probably the worst land to speculate on," said Grigg.
But in a December 2015 interview with CBC, Marquart said those facts didn't trouble him.
"I certainly knew that they may need it for their bypass. But I didn't concern myself with that," Marquart said. "It was an opportunity to own industrial land in the city adjacent to an outstanding new generational economic development… and for me it made complete sense to buy land adjacent to it."
A September 2013 email from assistant deputy minister Ron Gerbrandt notes the ministry's appraiser concluded the sales to Marquart "are far higher than any other sales in the area" and "local land developers that were interviewed can't understand why the buyer paid so much."
The appraisal by Highways found the land was worth just over $30,000 an acre but Marquart paid $80,000 an acre.
And Marquart had an appraisal that said the land was worth $129,000 an acre.
The ministry had concluded it would likely have to expropriate because officials believed Marquart wouldn't willingly sell the land to the government at the ministry's appraised value. So officials were bracing for an expropriation battle.
Meanwhile, Boyd was working on a plan of his own, without telling Highways or GTH staff.
In an interview with CBC in December 2015, Boyd, who was the minister responsible for the GTH, said Marquart's appraisal presented a daunting challenge.
"So there's a pretty big risk to the taxpayer, I would say, that if we expropriated that it would be challenged at some point in the future in a court. That appraisal would be presented at that point, and we could lose."
However, the internal government email seems to tell a different story, according to Todd MacKay, prairie director of the Canadian Taxpayers Federation.
A 'cart-before-the-horse problem'
In early November, on Boyd's instruction, his senior advisor Laurie Pushor approached Marquart about purchasing the land.
Marquart emailed Pushor details about the 204 acres and a copy of the $129,000 per acre appraisal. On Nov. 11, 2013, Pushor forwarded that appraisal to Boyd, Boyd's chief of staff and Joe Donlevy, Brad Wall's long-serving chief of staff.
"While I understand there will be push back in terms of appraisal methodologies, it does mean that we have some information that makes a case for our position," Pushor wrote.
MacKay said this sentence seems to clearly indicate the group had a predetermined "position" and this appraisal helped to make the case.
Why are they looking for evidence of a price point that already seems to be in place? That's a cart-before-the-horse problem and it's a big one.- Todd MacKay, Canadian Taxpayers Federation
"Why are they looking for evidence of a price point that already seems to be in place?" asked Mackay, after reading the email. "That's a cart-before-the-horse problem and it's a big one."
Sarauer said the email also shows Pushor immediately recognized there was a problem with the appraisal's methodology.
"It looks like they were retroactively trying to find a way to justify this valuation. What they used was a fishy looking appraisal," she said. "They used that to push through their scheme."
In her 2016 GTH land deal report, the provincial auditor found Marquart's appraisal didn't use the direct comparison methodology, which is standard for all GTH and Ministry of Highways land sales.
Instead, the appraisal calculated the value of the land if it were to be developed commercially.
She noted that when interviewed, Pushor told her office he deemed the $129,000 per acre appraisal "as irrelevant to the negotiations. As a result, he indicated that he did not formally review it."
This was not a normal negotiation, NDP says
He appears to have nailed the price down but still wasn't entirely clear about what land the GTH was purchasing.
"As I develop the materials, I just want to confirm that we are discussing the two parcels of property below for 204.25 acres," Pushor wrote. "Just want to be absolutely sure!!"
The multimillion dollar negotiations appear to have taken just a couple of weeks.
Just two days before the committee meeting Pushor made final preparations and in an email he suggested to Marquart "I wonder if we should meet face to face, just so we can say we did!"
"What we have seen so far doesn't indicate a back and forth in terms of negotiating price at all," said Sarauer. "You see an individual [Pushor] passing messages and documentation from the seller to government and to key players in the cabinet including the Premier's chief of staff."
Cabinet did approve the deal and the $21 million agreement was signed on Christmas Eve 2013. Marquart made about $5 million on the deal.
Government withheld this sentence for a year
In September 2016, CBC asked the Ministry of the Economy for a copy of this email from Pushor to Boyd and Donlevy.
CBC filed a complaint with Saskatchewan's information and privacy commissioner. That process took many months and the unredacted document was finally released this summer to CBC and the NDP.
Premier's chief of staff responds
CBC asked Boyd, Pushor and Donlevy for a further explanation of how they viewed Marquart's appraisal and how it helped them make their case.
Boyd didn't respond at all.
Donlevy and Pushor both conceded that when the email referred to "our position" that meant the position that Boyd and Pushor brought to cabinet.
"Decision items brought forward are expected to anticipate questions (such as "how did you arrive at this price") and support the recommendation," Donlevy wrote.
Neither of them addressed the issue of their predetermined "position" and how Marquart's $129,000 appraisal provided evidence for that.
I was there through this whole process. I know what was intended and what wasn't.- Premier Brad Wall - November 2016
Donlevy said just because the Minister brought the recommendations that doesn't mean he "wanted" this outcome.
"I don't see any indication in this email that the Minister "wanted" to pay more," Donlevy wrote. "Rather, the vendor wanted more than the government appraisal (supported by his appraisal). I note again that the final price paid was significantly less than the vendor wanted."
He also pointed out that the provincial auditor references Boyd's verbal negotiation instructions to Pushor.
"While I can't speak to Mr. Boyd's considerations during these negotiations, I would note that on at least a couple of occasions in the Auditor's report, it mentions that Mr. Pushor was directed by the Minister to obtain as low of a purchase price as possible," said Donlevy.
CBC asked the Premier for comment on this email but he didn't reply. Donlevy and Pushor both said they had not briefed the Premier about the appraisal.
However, last November, when CBC was doing a story about the Marquart negotiations and Donlevy's role in them, Wall seemed to be familiar with the topic.
"I was there through this whole process. I know what was intended and what wasn't," he said in a media scrum.
- A previous version of this story said CBC hadn't yet received a copy of the unredacted email. In fact, the Ministry of the Economy provided that document this summer.Sep 05, 2017 12:13 PM CT