Montreal's longest-running real estate fiasco

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Montreal's longest-running real estate fiasco
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It started off as land set aside in part for a shopping centre slated to become the ‘mini downtown’ of R.D.P. Over four decades and four mayors, it became a financial albatross for city hall.…

Almost from the time that farmer Jean-Baptiste Pépin built a homestead and raised seven children on the edge of the river in the eastern extremity of Montreal Island in the early 19th century, the Rivière-des-Prairies district’s vast uninhabited land has stoked many imaginations.But within this real estate Klondike, one property owner has managed to lose millions of dollars multiple times on a single piece of land over the last four decades: the city of Montreal.

The city says it’s refusing to cede the remaining undeveloped part of the land it awarded to a consortium in 2008 for $1.5 million because it says the buyer failed to respect a development agreement to finish building 330 housing units in five years. Since the 1980s, successive city hall administrations have bought large tracts in the rectangle at high prices and sold at a loss, regardless of upturns or downturns in the real estate market, and always amid similar circumstances in the bidding process, similar excuses and a cast of recurring figures who bridged the different administrations.

But while each of the city’s sales of sections of the Marc-Aurèle Fortin site began with a public bidding process managed by civil servants, more than one transited through the office of a mayor or executive committee chairman. “Montreal will spare nothing to make this new territory one of the most prosperous districts of the metropolis,” Montreal’s then-mayor, Jean Drapeau, said of the annexation.

The initiative was coordinated from the office of Drapeau’s new chairman of the executive committee, Yvon Lamarre.Renaud Paradis, Lamarre’s adviser on urban planning who would serve under later mayors as a top manager in the Montreal civil service, presided over a committee that studied and proposed ideas for residential, commercial and industrial development in R.D.P.

They also warned that land speculation was a threat to development in R.D.P. Land that had sold for 80 cents per square foot the previous year, they said, was now selling for as much as $2 a square foot.A month after the newspaper article, the executive committee passed an order to expropriate 4.5 million square feet of land in a rectangle between Perras Blvd. and the railway tracks that run below Maurice-Duplessis, on either side of Marc-Aurèle Fortin Blvd.

Many of the owners north of Maurice-Duplessis were labourers who in the 1960s had bought small plots from real estate companies that had in turn acquired large tracts of R.D.P. from an older generation of land speculators in the 1950s. These were mechanics, electricians, construction workers, a waiter —hundreds who had purchased a stake in the land like lottery tickets.

Les Entreprises Miron proposed to build “Place Marc-Aurèle Fortin,” a shopping centre rising two to six storeys that would be a “mini downtown” for R.D.P. It would offer 676,000 square feet of shops, offices, municipal library and Maison de la culture plus apartment towers behind it containing 700 rental units.The jury described the Duval project as “impractical compared to the economic reality of the sector” in a report to the executive committee.

Rather than issue a new public call for tenders, the same three bidders were invited to resubmit their proposals.In his role as chairman of the city’s top decision-making body, Lamarre presided over the meeting of the executive committee on Oct. 3, 1986. Among the items passed by the executive committee was a resolution declaring the Duvals’ Place Marc-Aurèle Fortin proposal the winner of the call for bids.And even though the politicians had blatantly chosen the winner three days in advance, members of the city clerk’s office nevertheless met on the Monday to perform the public opening of the sealed bid envelopes.

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