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Province introducing law to break long-term, multi-million dollar lease
The Pallister government wants to use legislation to break a long-term lease with the owners of a building that once housed at-risk youth.
The province says a decade ago the First Nations of Southern Manitoba and Child and Family Services Authority signed an untendered 20-year, $9.4 million-dollar lease with a numbered company for 800 Adele Ave. The contract runs until 2029.
"The building lease and its terms were not in the public interest,” said Finance Minister Scott Fielding
The province tabled legislation to terminate that deal on Nov. 30 this year.
"We're of a mind that the contract that was entered into was not justifiable,” said Premier Brian Pallister
The province says the office portion inside has been vacant since 2013 and the residential area was never fully occupied.
"Nor was it appropriate for the stated care that it was supposed to be providing for vulnerable children,” said Pallister
Ken Cranwill is one of the building's owners.
"We negotiated in good faith over several months,” he said.
Cranwill said his group spent $1.5 million renovating the facility to meet the southern authority's needs.
"They have a semi-locked down facility here, the kids that are at risk to themselves, to others could be in a safe environment out of the hotels,” said Cranwill
Cranwill said the deal was looked over by the former NDP government's lawyers.
"It's a bargain, it's not above the market value at all, it’s $20 dollars a square foot,” said Cranwill
Cranwill says the building has been damaged and he's shocked and disappointed the province is introducing a law to break a legal agreement. He cautions others thinking of doing business with the Pallister government.
"Be careful because this could be you one day, so if you have a government lease, you better know they're going to if they want to try to get out of it," said Cranwill
The premier responded to that notion.
"Don't enter into an indefensible contract at the behest of a government that's misguided in its efforts,” he said.
The premier says there is case law to use legislation to end a legal agreement, citing the NDP government’s dealings with the Manitoba Jockey Club and Assiniboia Downs in 2013.