The city has been at the centre of accusations for two expensive land acquisitions, one that is expected to house the city’s new arena
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The City of Surrey is denying mounting accusations it got bum deals in two recent — and pricey — land acquisitions, insisting the transactions are beneficial to the city.
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The city completed a land swap agreement with private developer Wesgroup Properties in which it agreed to give up three city-owned sites — two industrial sites in Campbell Heights and a shopping centre in Cedar Hills — in exchange for a former Safeway site and parking lot.
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The city intends to build a 10,000-seat arena on the site as a way to kickstart creation of an entertainment hub in the city’s centre that would also include a luxury hotel, conference space and housing.
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Opposition Coun. Linda Annis, who voted against the deal, said the city essentially paid $114 million in land for the new site at 10355 King George Blvd., even though its assessed value is $86.8 million.
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“The mayor brushed off questions and said it was a simple land swap, but when you look at the assessed value of the city property and the value of the Wesgroup Properties site, taxpayers got the short end of the stick and ended up paying $28 million more than the assessed value of the arena site,” Annis said in a news release.
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The head of the city’s development company, Bill Aujla, said Tuesday the criticisms are misguided.
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“Land transactions aren’t done on assessed values,” said Aujla, CEO of Surrey City Development Corporation. “Land transactions are typically done on appraisals. … I think we did make sure we had a fair deal for both sides.”
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Aujla provided a copy of a report by EY-Parthenon Corporate Finance Inc., a company that examined the land deal for the city. The report found the deal fell “within a reasonable range of the appraised values or broker opinion of values, which suggests that the city is achieving market values for the properties.”
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The company concluded that the value of the future arena site is $116.6 million, which is the same combined value of the lands the city traded away. The report also noted that Wesgroup had not been offering the former Safeway property for sale and had a four-tower project underway.
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“It is reasonable to assume that in a scenario like this, it would be very challenging for the city to secure a discounted transaction price, especially when it is understood that the location is strategic for the arena and entertainment hub development,” the report said.
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Aujla added that the location made more sense than what was previously considered — the B.C. Lions training facility at Tom Binnie Park in Whalley.
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The new location is across from City Hall and the Surrey Central SkyTrain Station and already has underground parking. King George Boulevard is also expected to have bus rapid transit line running through it once the project secures funding.
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“It’s not just about the fight as of today, it’s what you’re creating for the future economic development, the jobs, the success of the entertainment district,” Aujla said.
