Developer sues city over failed industrial joint venture and alleges city stole dairy-plant deal

One of Winnipeg's largest landdevelopersclaims theCity of Winnipeg reneged on aSt. Bonifacejoint venture last yearand thenabused confidential information from the scuttled planto work out its own deal with a Canadian dairy giant.

In a lawsuitfiled before the Queen's Bench on July 21, TerraconDevelopment Ltd. is seeking damages from the city over the cancellation of a plan to develop 237 acres of vacant city land alongside the Winnipeg Aqueduct, south of the St. BonifaceIndustrial Park and Waters Business Park.

Terracon'sclaimshavenot been proven in court and no statementof defence has been filed.The damages at stake could be in the millions, asTerraconis seeking compensation for lost potential business at the cancelled industrial park.

Facing a shortage of serviced industrial land,city council voted in 2009 and 2013to allow the city to proceed with a joint venture that would have seen Terracon service this land and then sell it off on behalf of the city, with both sides sharing in the profits.

Terraconbuilt a $1.6-million road into the site but the joint venture was never concluded. City officials said it fell apart because Terraconinsisted on being exempt from paying education taxes on the property.

In July 2015, council rescinded the joint venture agreement and then approved a city dealto sell part of the land to ParmalatCanada Inc. for $2.6 million. Both the city and province agreedto pay $8.2 million to service the new dairy plant, which is replacing Parmalat's existing operation in Old St. Boniface.

• Winnipeg committee votes to cancel Terracon joint venture deal

• City strikes quick deal to keep Parmalat milk plant in Winnipeg

In a statement of claim,Terraconcontends city officials stopped working on the deal during the 2014 civic election.

When a meeting was finally held between the two parties,Terraconclaims it told the city a newParmalatplan was "part and parcel" of the new project.

Terraconclaims that in April 2015, the city then reneged on an understanding that the developer would not have to pay property taxes on the site.

Ultimately,Terraconclaims the city made misleading claims that led the developer to spend $2 million on fees and a "useless road," abandoned the deal and also abused confidential information aboutParmalatto enter into its own deal with thedairy company.

"Information about Parmalat and the nature of the development were provided to the (city) in confidence and on the understanding that a joint venture would be proceeded with, and certainly not for the purpose that the plaintiff would be sidestepped by the defendent," the claim reads.

The statement of claim also makes reference to a meeting attended by city officials, including Mayor Brian Bowman.

On Thursday, the mayor confirmed that meeting took place.

Developer sues city over failed industrial venture

8 years ago

Duration 1:02

One of Winnipeg's largest land developers claims the City of Winnipeg reneged on a St. Boniface joint venture last year and then abused confidential information from the scuttled plan to work out its own deal with a Canadian dairy giant.

"Ultimately the developer did not choose to sign a joint venture agreement. My intent was that the party sign a formal agreement so that they could proceed and that didn't occur.I prefer formal legal agreements than understandings," Bowman said at city hall.

The mayor said he expects the city to file a statement of defence.