Here's to the crazy ones, the misfits, the rebels, the troublemakers, the
round pegs in the square holes... the ones who see things differently -- they're
not fond of rules... You can quote them, disagree with them, glorify or vilify
them, but the only thing you can't do is ignore them because they change
things... they push the human race forward, and while some may see them as the
crazy ones, we see genius, because the ones who are crazy enough to think that
they can change the world, are the ones who do.

Steve Jobs
US computer engineer & industrialist (1955 - 2011)

Monday, February 13, 2012

Danny Williams Fantasy Land

Bill Vander Zalm, former Premier of British Columbia, had his entertainment park named Fantasy Land. Danny Williams has his own development named Glencrest Development - Newfoundland's own version of Fantasy Land.

Williams told the Telegram: “It’s something that I have been putting together for a good 15-plus years,” That would date it back to at least 1997. The Auditor General did an extensive study regarding the use of Crown lands, and the systemic problems with the administration of those lands. The study ended in September, 1999 . The study concluded many different problems with the lease, sale, and distribution of lands held by the Province - an estimated 95% of the Province's total land mass. Systemic issues surrounded record keeping, follow up on accounts receivable, numerous administrative gaps, and the value the land was being sold for.

The Auditor General's report sums up the change in land policy:

"Prior to 1996, the public could obtain a lease to occupy Crown land at an
established annual rate but normally title to the land remained with
Government. In 1996 Cabinet authorized the Minister of Government
Services and Lands to lease Crown land, with the exception of certain
lands, at 20% of the land value as determined by the Department over a
five year period with title to transfer to the lessee after the five years.
Cabinet also authorized the Minister to offer Crown lands to private
developers based on fair market value. The 1996 Budget Speech indicated
that the move to this new Market Value Pricing System, as well as a fee
increase, would generate approximately $6.2 million in additional
revenue for 1996/97. The Department projected additional revenues for
the five years ending 31 March 2001 at $15 million."

It further states:

"In response to this new pricing policy, the Department commenced a
process of reviewing all existing leases as the lease term expires with a
view to converting these leases to grants within the next five to ten years.
The Department established a pricing policy for residential leases for
$1,500 a lot, and recreational cottage leases for $2,500 a lot or $3,000 for a
waterfront lot. Lessees had to avail of this option by October of 1996 or
after this date the lessee would be required to pay fair market value. Fair
market values were determined based on such factors as selling of nearby
properties and professional independent appraisals conducted mainly by

the Municipal Assessment Agency and Departmental staff...

Since the new pricing policy came into effect in 1996, a total of 177 commercial leases have been issued. Commercial leases which exceed 20 hectares must be referred to Cabinet for approval. There have been 6 commercial leases of this type since 1996 all of which were approved by Cabinet."

Of course, the clincher in the Auditor General's Report was:

"The Department has also developed several recreational cottage lot areas
since 1996. We were informed that pricing policies for recreational
cottage lots are established at fair market value with a minimum price of
$2,500 a lot or $3,000 for a waterfront lot plus development costs. The
Lands Division could not readily provide us with a listing of cottage lot
developments with the number of developed lots, status of lots, associated
costs and revenues."

Contrast the Auditor General's comments in his study of land use policies, and the departments own established pricing guides for lots, to the price Danny Williams paid. The Business Post puts it like this:

"Williams obtained the first parcel, some 557 hectares, in October 1998
for the sum of $425,000. That works out to just over $300 an acre.
Another parcel of 44.6 hectares, or 110 acres, was conveyed to a numbered company owned by Williams called 10801 Nfld. Inc. for $64,030. That equates to $581 an acre and happened on November 5, 2003, just weeks after Williams led the Progressive Conservatives to his first majority victory in a fall election."

The obvious question is how did Williams manage to purchase 601.6 hectares of Crown land for an average of $329 an acre - not lot, acre. To put the enormity of this deal in perspective, consider that even removing 50% of the land for infrastructure use, the sale of this property today by individual building lots alone could realize Williams $600 million dollars. That is quite the profit in just over 12 years. Then there is his potential cut from developer Kevin King.
The answer to Williams getting approval of his land purchase was Brian Tobin. Brian Tobin, Liberal Premier at the time, presided over the massive land grab - which required Cabinet approval. On July 2, 1998 then Municipal Affairs Minister Ried announced the sale. The Business Post contacted him recently for an interview on the issue. He had this to say:
"That went to cabinet and I can’t say who did what or what the procedure was, I have no idea. All I know was it came to cabinet and that’s where it was approved. No minister at the time had the right to do that… You’d never find yourself in a situation where you’d put yourself in a conflict like that. It was a deal and the deal went through cabinet and it was sold to Danny Williams.”

Of course Williams has to get provincial approval to develop the land as it is over the 190 contour. Essentially, land this high requires special pumping systems for water and waste, because forced gravity systems do not function at this elevation. That is the reason why the province has banned such developments. However, as Williams himself noted, Mount Pearl and Paradise are both above these contours, so he doesn't expect any impediments to approval.

As if to reinforce that belief, St. John's Mayor Dennis O'Keefe states:

“The second meeting I came away again equally confident that the amendment would be forthcoming and that there would be development above the 190. Kevin (O'Brien) indicated to me he probably would have to take it to cabinet because it would be a change in policy and rather than sign off on the amendment himself, which he had full rights to do, that his preferred way of dealing with it would be to take it before cabinet. And I said well that was fine, I was quite happy with that, but I hoped that it would be done in time to allow development toward the end of March. And he felt, yeah that could be done and he would prepare a cabinet paper on the issue very quickly and bring it before cabinet and he felt that would be done in a timely fashion to allow developmentostart around the end of March."
Of course, in keeping with Newfoundland politics, Mayor O'Keefe freely admitted he received political donations from Williams old law firm, and Williams own son of over $10,000 for his mayorality campaign. Even Kevin King chipped in as well.

In so far as the former Premier's war cry of "no more giveaways" of Newfoundland's natural resources goes, well, I guess that doesn't apply to Danny Williams' Fantasy Land.

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