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Estimates - Property Management (17 April 2007)

From Crown and Central Agencies Committee Hansard - 17 April 2007

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Property Management

Mr. Hart: — Thank you, Madam Chair. We are here again in estimates, and I don’t imagine that you can imagine what I’m going to ask about. So I won’t hold you in suspense any longer.

I wonder if you could update the latest status on the Echo Valley Conference Centre. I know there’s been some developments, and I’ve been getting questions from constituents as to what actually is going on and where’s the thing at and so on. And I’ve been reading some articles in papers and so on. But I wonder if you could briefly summarize exactly what the status of that facility is at this point in time.

Hon. Mr. Lautermilch: — Madam Chair, before I turn it over to the deputy, I would want to say that I’m disappointed that Mr. Zimmerman isn’t here today because he’s generally been helping you with your line of questioning on this. And so we’ll miss him today, and if you could pass on, on my behalf, that we truly do miss him. Ms. McDonald.

Ms. McDonald: — Thank you. We’ve actually extended the option agreement with the town of Fort Qu’Appelle to December 31 of this year. The resort village of Fort San is in the process of possibly passing a bylaw that would ask for heritage interests on that building. There has been several objections sent to the resort village and, based on that — of which we are one of the ones that have sent in an objection — based on that, we extended the time period for the developers. So it’s basically the same as it was when we last spoke. Development has taken place.

I understand that the development group had a booth at the recent Regina Home Show of which there was a lot of interest expressed there for participation and, you know, what was the development all about and things like that.

Mr. Hart: — But as far as any work taking place on the site, I was by it within the last month, and I didn’t see any, unless something was happening inside the buildings. You are maintaining the buildings in their mothball situation. Is there heat being . . . Are any of the buildings being heated at this point in time?

Ms. McDonald: — We have one building being heated, but otherwise the rest are just in a mothball state. So they’re the same as what we spoke to you about last time.

Mr. Hart: — Okay. Now you mention that Sask Property Management was one of the objectors to this heritage status. What is the basis of your objections? I’d like that for the public record.

Mr. Rusconi: — The information that we received from the resort village was very cursory. There was no detail attached to it. We clearly needed more detail before we could remove our objection. So we’ve asked for that detail. We’ve met with them recently and spoke to them about the situation.

There’s also comments in their draft bylaw with reference to maintenance and operations of the current facilities, which is a concern for us because of the huge cost involved if we had to install new heating systems, new sewer systems in order to maintain the building. So we’ve in fact recently sent a letter to the village asking for a meeting so that we can sit down and discuss exactly what their intentions are with respect to the bylaw in terms of the maintenance and operations.

As well as the buildings that they feel should be saved, with respect to heritage and the bowl, there are other objections. I know the developer is concerned about the size of the bowl they want to have preserved which will cut down on the amount of lots that might be available in their development. So discussions are ongoing and hopefully the heritage issue will be resolved shortly.

Mr. Hart: — It should be noted, Madam Chair, that the Architectural Heritage Society of Saskatchewan did put the Echo Valley Conference Centre on their watch list last year. And I believe it was the third facility on their list. Now whether that actually has any relevance in readings, whether you’re first or third or tenth, but there is interest from other people besides the Fort San people to preserve some of the heritage of the, you know, the sanatorium. It was one of the first ones in the province, and it is part of our history and so on.

Now I’d like to move on to a . . . There was a meeting in Fort Qu’Appelle or in the area. It was reported on in the March 13 edition of the local paper, the Fort Qu’Appelle Times. And I understand some of your officials from Sask Property Management were there.

And one of the items in the report that caught my attention is . . . perhaps I’ll just read the sentence and ask you to comment on it. It says, “However, a senior representative of SPM confirmed at the meeting that Fort Qu’Appelle was only given an option to develop a proposal.” And that last part of it, “. . . an option to develop a proposal,” I was always of the understanding that, from our discussions in the past, that the town of Fort Qu’Appelle actually had a proposal. Now what are your comments on that quotation?

Ms. McDonald: — We actually met with Mayor Zimmerman and one of his council and his clerk and at that point in time this came up. And our regional director, who was at that meeting, who was the most senior staff person there but who was also there with a fellow that worked with him, when the fellow made that comment, he was sort of, to say the least, taken back. And because it was a public meeting, he didn’t want to publicly correct him at the meeting. So we have since corrected this with Mayor Zimmerman and said that our staff member had made a mistake.

Mr. Hart: — So then there was a proposal. It wasn’t just an option to develop a proposal.

So then to summarize the current situation, everything is in limbo until this issue of heritage designation is determined. Where are we at now? How do we proceed from where we are now?

Mr. Rusconi: — That’s one of the issues that they’re dealing with. I mean, there’s other issues to me, you know, to be frank about it. I mean, there’s the environmental issues. There’s all sorts of things at the resort village of Fort San have asked the developer to develop, i.e., traffic studies and flows and traffic counts and that sort of thing. So there’s a number of issues that yet have to be resolved. But things are moving on a little quicker than they were six months ago. So there’s hopefully things will be resolved within the next few months. The heritage issue, I think, will be resolved. So clearly there’s some work that needs to be done yet.

Mr. Hart: — You mentioned, Mr. Rusconi, that the village has asked for some traffic impact studies, I guess. Now of those requests that the village has put forward, in your opinion or the department’s opinion, are they legitimate concerns? How would you care to comment on that?

Mr. Rusconi: — I believe they’re a little premature. Clearly access and egress from the site is important, and traffic flows are important because it’s a cottage area, and there’s lots of children around. But until they have a more firmed up the development and they note the number of residences and the number of people that may be in that area, it’s difficult for them to do a traffic flow study. So I think it’s a little premature, but it’s certainly something that has to be dealt with at some point in time.

Mr. Hart: — Well I understand that the Mitchell Developments, they have a blueprint of what they’d like to do. And we had a meeting in June, I believe it was. And we had a bit of a plan which called for quite a number of residences or residential units in the area which would certainly, I guess, would impact on the amount of traffic. And I guess, we’re all familiar with the highways or streets or whatever you want to call them that serve that area.

I don’t know whether I’d agree with you whether they’re premature because if you’re . . . first of all, give the go ahead to approve this development . . . you know, I’m just taking the view point of the council. If this development does go ahead and then we have to deal . . . it would be their responsibility to deal with all the traffic problems that would develop from the increased traffic. You know, I think maybe that needs to be done now. And I suppose . . . I’m not sure whether your department, the Sask Property Management, would have a role to play in that, or is that something that the developers would need to deal with council on that?

I’m not sure whether you have, as current owners of the property, whether you have a responsibility. And I wonder if someone would care to comment on that.

Hon. Mr. Lautermilch: — Madam Chair, I think I would like to enter the discussion at this point. When I came to this file, this was one of the ongoing discussions that had been taking place. As members of this committee will know, the Echo Valley Conference Centre was no longer required by the government, was deemed surplus. And we offered this facility to sale to other government entities. There was no one interested within government.

We then moved forward and indicated that we would entertain proposals from local communities. And we received one from the town of Fort Qu’Appelle. We received one from the resort village of Fort San. So it’s obviously an issue where these two communities were competing for the same facility.

The evaluation of the two proposals was done, and the proposal from the town of Fort Qu’Appelle was the one that was accepted, which was not very well received by the community of Fort San. And I understand, Mr. Hart, you have been working with Mayor Zimmerman on this. And I think it’s fair to say that Mr. Zimmerman does not want to see the Fort Qu’Appelle proposal move forward.

And obviously we’ve had a request now to have a look at this heritage building. Fair enough. We’ve had a request for some traffic counts. Fair enough as well. What I find interesting though, with the last time we had this discussion in this Chamber, it was indicated that the proponents of the Fort Qu’Appelle initiative were more than willing to put forth their proposal so that people could understand it. That was not the same with the community of the resort village of Fort San. And obviously that was the issue at that point. It appears that’s not the issue now. We’re moving on to what other tools and vehicles can be used. And that’s fair enough as well.

My interest is this. My interest is that we have an asset that is surplus, deemed surplus by the province of Saskatchewan. It’s a provincial liability at this point, and we would like to see if there’s an opportunity for the development in a positive way. It’s a beautiful old building, as you will know. There is a lot of emotion tied to the sanatorium. A lot of people in Saskatchewan had family in there and so it does have some emotion tied to it.

I think that from our perspective as a government, what we want to see is the best use possible for those assets at the least cost to the province and at the best way to develop the economy. So it’s, from our perspective, not a matter of which community. I would be satisfied — and I think SPM would be satisfied — if it was either of these communities that were moving forward with a proposal. But that isn’t the case. There were two proposals. SPM had to make a choice. They made a choice, based on their criteria, that the town of Qu’Appelle had the best proposal and so they moved forward with them.

Now we’ll go through the process and the heritage designation will go through its process. And whatever is required with respect to the environment, that process will be done. Whatever is required with respect to traffic management, that obviously will have to be done. But I think from our perspective we’re here to facilitate development as opposed to being an impediment. And I think that’s what we have been doing and that’s what we will continue to do.

And I can tell you it is not my intention to choose sides in a debate. I’m not interested in that. What I’m interested in is the best proposal moving forward. And I think it’s fair to say . . . I haven’t looked at either of these proposals, because that’s not my job. That’s the job of the department officials and that’s what they’ve done. You have expressed interest in the proposal by the town of Fort Qu’Appelle. The proponents say they’re willing to make that public. The resort village of Fort San is not, as I understand it, those folks are not willing to put their proposal forward. So be it.

So we’re going to move forward. We’re going to continue to go through the process and we’ll discuss this probably at another time in the legislature here. But from our perspective it’s one of acting in the interests of the people of Saskatchewan on an asset that is deemed surplus by the province. And that’s our position, and so the officials have been working to try and facilitate that and we’ll continue to do that.

Mr. Hart: — Madam Chair, if I could just respond to the minister’s comments. I think the problem that we are faced with today — and the people of the valley are faced with today — stems back to this government’s haste in trying to dispose of this asset after it was deemed surplus. The people of the valley had requested a six-month stay of execution so they could work with the department, or at that time the corporation, to see if they could develop an alternative use for the facility. But that was denied, and the facility was closed, and ultimately — as it’s been explained many times before — that the process, the policy that is used, is in place currently for disposal of surplus assets, was enacted.

I have stated earlier on a number of occasions that it seems to me, I’m of the opinion that the policy that Sask Property Management has in place for disposal of surplus property may not fit this particular piece of property. This is a large piece of property with multiple buildings that has some very significant heritage implications which we are now dealing with.

I’m not so sure whether the best interests of the people of the province are being served by the process that has taken place and is currently ongoing because we don’t know — I don’t think — whether we have the best proposal because we’ve only apparently received two proposals. I think this property should have been . . . First of all, the people of the valley in consultation with Sask Property Management should have determined what part of those facilities should be preserved, if any. That’s a question that was never dealt with, and now we’re dealing with it after the fact. And also we should have heard from people of this province and particularly the people of that area what they felt are the best uses for that property and what are their ideas.

And then I think what should have happened, that once we’ve established those parameters, this property should have been put up for public tender so that we could look at proposals received from people who have the wherewithal to develop properties like this in the best interests of the people of the province and people of the area.

I don’t think we’ve got that because of the way the process was handled. And I would suggest that perhaps we step back from this. Options have only been given; none of them have been exercised. It’s not too late to start over again and perhaps handle this in a way where the people of the province and the people of the valley will have maximum benefit from this.

And perhaps we can preserve some of our history also because currently there is no requirement in the development of this property to preserve any history. And I think we need to look at that question very seriously and see if there isn’t a way that we can preserve at least a piece of our history. Certainly there are a number of buildings on that property that can be removed and should probably be removed. There’s a number of smaller buildings, houses and that sort of thing. The main structure and particularly that portion that was the original building on the site, we need to look at that and see if there’s any way that we can preserve that.

Far too often in this province we are too ready to tear buildings down — buildings that people from other countries, particularly Europe, would be astonished that we are not preserving our history. And I think future generations may want to ask why we didn’t do that.

So, Minister, that would be my recommendation to you that perhaps you look seriously at. You’re not committed. All, as has been stated here today, all you’ve done is extended that option to the town. They haven’t exercised it. I believe you still have the ability to say, look, maybe we didn’t do this thing right and we should start over again. And let’s consult with the people of the valley and of the province as to what type of development we want there, and then let’s see where that leads.

Hon. Mr. Lautermilch: — Madam Chair, let me respond to the member this way. I can tell you that I personally had some history with this building, as one of your colleagues, the member from Wood River, has. This building was no longer used as a sanatorium. It was vacant and obviously the Government of Saskatchewan felt a strong desire to find a useful purpose for this building. And so we did. We put many public dollars into establishing a low-cost convention centre in order to maintain the heat, generate some revenue, keep this building functional.

And the people of that valley were well aware of the pressures. This just didn’t happen overnight. This has been ongoing for years, many years. And they know that we found a purpose for it. And they know that we brought the navy cadets to that facility under a contract. That was a good arrangement for the cadets, and it was a good arrangement for the province because it generated some cash flow from the federal government through that program to be able to help to keep this building functional.

That contract expired. There was then a desire to find other arrangements. We searched around to find what we could. We made no secret of the fact that we felt there was some desire in the community, desire in the province to maintain the integrity of this building. And so obviously we looked internal to government to see if we could find a way to make this happen.

There were no takers. SPM, the owner of the facility, had an ongoing maintenance and operational cost that we felt we needed to move forward, and so we did. So we used the process that we use in every other jurisdiction from Weyburn to Prince Albert, every other community. It’s a proposal that works well. You see if there’s internal to government the ability to utilize it. You then shop it to other municipalities. And if other municipalities aren’t involved, then you can shop it — and that’s our process — to the private sector.

There have been many public meetings, in Fort Qu’Appelle and in Fort San, the village of Fort San. This just didn’t come to be overnight. But it came to the point where the government felt it needed to make a decision, and so we entertained proposals. One proposal was chosen; one was not.

And the member can argue that we should scrap the whole proposal and go back to square one. He can make that argument, but I would say that the officials who have put together the proposal for disposal of surplus buildings in this province have done some good work and have learned lots over a lot of years of managing these kinds of properties.

There’s never a solution to a problem where you will satisfy everyone, and so what you have to do is have a fair process in place to determine which proposal you would choose, which one is in the best interests of the province, and that’s what we have done.

Now there are those that don’t agree with that, and I say fair and fine. And we’ll go through the heritage designation process. That is a process that’s been developed by officials — federal, provincial — as well. And so we’ll go through that process of analysis.

And at the end of the day we’re going to make a determination as to the future of this building. And as I said, there won’t be 100 per cent agreement to that, and that’s fair enough as well. But I want to say this, that I believe firmly that the officials who made this decision with respect to the Fort Qu’Appelle initiative and choosing that one did it because they believed it was in the best interests of the people of this province. And there is no other motive and no one should imply that there is because there’s not.

Mr. Hart: — Madam Chair, I heard the minister say that — of at least infer that — the reason that the conference centre was shut down is because the sea cadets were leaving, and I wonder is that what the minister said.

Hon. Mr. Lautermilch: — Well what I’m saying is this. We were working to determine a way of cash flow and we had been encouraging people of Saskatchewan to use it as a conference centre so that we could maintain at least a break-even or a small subsidy if that’s required. And obviously there were decisions in terms of the sea cadets that impacted on the cash flow of this facility. And so obviously when we’re looking at cash flow and we’re looking at long-term operations and what sustainability there is or isn’t, that would be one of the determinations. And it was a contract that was there for a number of years. I don’t have the details here. I would assume the officials can find it for us. But I think it was a deal that was put together in the interest of young Canadians. It was put together in the interest of the province of Saskatchewan and of the community who were very glad to host the cadets for those number of years.

And so I would say that the evaluation and the decision is made on cash flow or a lack thereof and obviously we didn’t see that it was necessary for a surplus building to continue to consume public dollars at the rate that the Echo Valley Centre is and we were looking for a solution and are continuing to look for a positive conclusion to that asset. And obviously there’s no one here who doesn’t enjoy a summer view of that building and of the yards and of that whole landscape. That’s a beautiful area of our province and that’s a facility that’s been there for so many, many years. And obviously if we can find a way to maintain the structural integrity of it, that’s what we would hope to do. And if we can find capital — private sector capital — to invest in order to make that a reality, I think that’s a good thing to do as well.

I think of the Grant Hall Hotel in Moose Jaw and I think of that building sitting idle. It wasn’t a government building; it was a private-sector-owned building. But we worked with the local community in order to find a way to make that work and so what do we have? We have one of the most successful spas anywhere, any place and it’s been a great asset for the community of Moose Jaw. And why did it happen? It happened because the city of Moose Jaw worked with local residents and with the province who put many, many dollars into support of that project in order to make it work.

And so what do we have? We have that building as part of Moose Jaw’s history, but we also have that building as part of Moose Jaw’s future. Now if we can translate that kind of action to this building at Echo Valley, that’s what we would love to see happen.

Mr. Hart: — Well, Madam Chair, just for clarification, the sea cadets did not leave on their own. They left because the building was going to be closed. The Echo Valley Conference Centre was going to be shut down. That’s why the sea cadets closed. I believe, and I’ve been told by people associated with the sea cadets, that they would have stayed for quite some time if some long-term arrangements could have been made. So we can’t blame it on that.

Now the minister said that the conference centre operated at a deficit. And the information that I was given, when we first discussed this facility, is yes, it did operate as a deficit. But I’m not so sure that the deficit was at the level that was stated in the financial information, in that the operation and maintenance costs, certainly if you looked at those and extracted any overhead costs that probably are still ongoing, the costs of operation or the deficit of the facility wasn’t that onerous that it couldn’t have continued to operate for another six months to allow the people of the valley to at least try and come up with a plan.

And I think this is where we got off on the wrong foot to begin with. We have not only people of the valley but people throughout the province who felt very strongly — including the Saskatchewan Federation of Labour and other organizations that felt very strongly — that this facility should be given a chance, that we should give it a bit of time to see if we can find a solution to the problem. And that didn’t happen and so as a result, we’re here today.

And so once again I would, Madam Chair, recommend to the minister that perhaps we start again on this facility and consult with the people of the province and the people of the area to determine what part of our history we want to preserve and can afford to preserve. And then, determine what type of, have some public input as to what type of development we’d like to see there. And then perhaps we need to go and just put this thing out for public tender so that we could have, we’d get numerous proposals from anyone who is interested in developing that property. And perhaps at the end of that process the people of the province and the people of the areas will be the big winners.

Hon. Mr. Lautermilch: — Well, Madam Chair, no one should suggest that there hasn’t been opportunity for public involvement because there has been. The number of public meetings held out there has not been inconsequential. And I would want to say as well that . . . And I can ask Mr. Koop to go through the economics again, but basically the contract that we had with the navy cadets was a wash. It was one of recovering expenses. It was revenue outside of that, and so no one should suggest that, I will say, that the decision was made because the cadets had decided to pull the pin. Because it was more than that. Obviously the number of conventions, the costs of capital over a period of time, and the analysis of the operations, did mean that the operation was in deficit. And that’s fair enough.

But I would not want anyone to assume, those that don’t live in the area or that aren’t interested in that area, no one should assume that this was a decision that was done in the dark of night. It was an open process. There were public meetings in the communities, in the surrounding area, and everyone knew that we were looking for a solution. Everyone understood the process. And I would stick by my conviction that the department officials have acted in the best interest of the people of the province with the process that they’ve used. There are those that will not agree with that thesis. But I think it’s a process that’s worked well in other areas of the province and I see no reason it can’t work well here.

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