Saskatchewan·CBC Investigates

Former owner of GTH land suing provincial government for $2M

A Regina landowner whose former property is at the centre of the controversial Global Transportation Hub land deal is suing the government of Saskatchewan, alleging that when the Ministry of Highways bought some of her land under threat of expropriation, it misrepresented the property’s true value.

McNally Enterprises says Saskatchewan government lowballed company’s property value

This land, on the west side of Regina, is now the subject of a lawsuit between a former owner and the Government of Saskatchewan.

A Regina landowner whose former property is at the centre of the controversial Global Transportation Hub land deal is suing the government of Saskatchewan, alleging that when the Ministry of Highways bought some of her land under threat of expropriation, it misrepresented the property's true value.

According to the statement of claim, the Ministry of Highways bought 44 acres of land from McNally Enterprises for $9,000 an acre and another 28 acres for $11,000 an acre, under threat of expropriation. The company says those transactions happened in 2010 and 2011.

Ruth Eisworth, the president of the company, said that was all the government would pay despite the fact that her company had an appraisal which said the property was worth $38,000 an acre.
Ruth Eisworth, president of McNally Enterprises, is suing the government of Saskatchewan alleging that when the Ministry of Highways bought some of her land under threat of expropriation, it misrepresented the property's true value. (Submitted by Ruth Eisworth)

"We were led to believe because our appraisal was so much higher, that it was invalid," said Eisworth, referring to her mediation with officials from the Ministry of Highways.

The statement of claim says "the Ministry negligently misrepresented the value of the lands and knew or ought to have known that the value of the compensation offered to the plaintiff for the lands was not due compensation."

It goes on to claim "the ministry rejected the appraisal value obtained by the plaintiff and further, the ministry represented that the appraisal was unrealistic and stated that the appraiser would be reported to its professional organization with a complaint for incompetence."

Eisworth said she launched this lawsuit because the GTH land deal, uncovered by CBC's iTeam, shows landowners aren't being treated equally when it comes to how the government has purchased land in that area.

"We relied on the ministry to treat us fairly and it doesn't seem they did," Eisworth said.

GTH land and its rapidly escalating value

Eisworth said after she sold some of her land to the government, under threat of expropriation, for $11,000 an acre, she decided to list the rest of the quarter section for sale, to avoid having more land purchased for what she considered an unfair price.

RELATED: Businessmen made millions on Regina land that wound up in taxpayers' hands

RELATED: Timeline: History of puzzling Regina land transactions uncovered by iTeam 

RELATED: Wall confident auditor review into $21M GTH land deal will show appropriate processes were followed 

RELATED: 'I'm not being treated fairly,' says Regina landowner after expropriation

On February 26, 2013, she received $45,000 an acre for the land from Alberta businessman Robert Tappauf. That same day he resold the property to a Regina company owned by Anthony Marquart and Harold Rotstien for $71,000 an acre.

And then one year after that, Marquart and Rotstien sold the land to the government-owned GTH for $103,000 an acre.
Bill Boyd defended the government's decision to ask the Global Transportation Hub to buy land for two to three times more than government appraisals said it was worth. (CBC)

The Ministry of Highways had an appraisal that concluded the land was worth $30,000 to $35,000 an acre and the GTH had an appraisal which said the property was worth $51,000 to $65,000 an acre.

But Bill Boyd, the minister responsible for the GTH and the chair of its board, said it paid the $103,000 price because Marquart and Rotstien had an appraisal of their own which said the land was worth about $125,000 an acre.

"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," Boyd explained to CBC's iTeam back in December 2015. "That appraisal would be presented at that point and we could lose."

And so, Boyd said, the GTH took its appraisal and Marquart and Rotstien's appraisal and "kind of sawed off somewhere in between."

Eisworth said this seems like a double standard on the part of the Saskatchewan government.

They didn't consider [our appraisal] and saw off between the two. All they did was discredit our appraiser- Ruth Eisworth, McNally Enterprises

"They didn't consider [our appraisal] and saw off between the two. All they did was discredit our appraiser," Eisworth said, referring to the Ministry of Highways.

She wonders why the government didn't treat her the way the GTH treated Marquart and Rotstien.

"I'm taking Bill Boyd at his word now that this is how things should have been done. And it just seems that that's not how they were done with us."

"It just seems like there's a double standard from what we were told and now what they are saying to the press to justify why [the GTH] paid $103,000 an acre," Eisworth said. "Which is the correct thing? I don't know. I guess that's to let the courts to decide."

In her statement of claim, Eisworth is seeking $2 million which she calculates is the difference between what the government actually paid her for the land and what she would have received if it paid her appraised value.

None of the claims have been proven in court.

'We have no comment on this matter as it is before the court': Ministry

The iTeam reached out to officials in the Ministry of Highways. A written response said: "We have no comment on this matter as it is before the court." The government's statement of defence has not yet been filed.  

Government officials have consistently pointed out that the Ministry of Highways and the GTH value land differently.

It says the ministry has to pay market value and it determines that by acquiring independent appraisals which determine what price a willing seller and willing buyer would agree to in a free and open market.

In an email, a government spokesperson said by contrast "the GTH is a Crown corporation and must make a business decision as to how much it can pay for land and still make a reasonable rate of return … The GTH makes decisions based on strategic and commercial priorities."

The government also consistently pointed out that it has asked the provincial auditor to review the GTH transactions.

Premier Brad Wall has said publicly said: "I'm completely satisfied with the work of the GTH in purchasing these things."

ABOUT THE AUTHOR

Geoff Leo

Senior Investigative Journalist

Geoff Leo has been a reporter for CBC News in Saskatchewan since 2001. His work as an investigative journalist and documentary producer has earned numerous national and regional awards.

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