The City of Winnipeg will expropriate the land that a controversial fire hall was built on.

Winnipeg Fire Paramedic Station No. 12 was built on land the city did not own.

CBC broke the story about what turned into a controversial land swap deal that ended up the subject of an audit.

The city said Friday in a news release it will begin the process to acquire the land at 1780 Taylor Ave., after negotiations with the owner came to an impasse.

A report from city bureaucrats said negotiations with Shindico are at a stalemate.

The city appraised the land at just over $1 million.

According to the report, Shindico assessed it at $1,232,200, and added $844,220 to cover an alleged loss in property value next door to the fire paramedic station.

An audit into the fire hall land swap deal found developer Shindico got special treatment.

Mayor Sam Katz has said in the past expropriation was a poor option because it could be more costly for the city.

Expropriation a long process

It could be another two years, though, before the city actually owns the land on Taylor Avenue, according to Barry Thorgrimson, the city's director of planning, property and development.

"There are no specific timelines put in place," he said. "Expropriation processes traditionally go anywhere from 12 to 24 months."

That would mean the city would continue to operate a fire hall for that period of time on land it doesn't own.

Thorgrimson said Shindico made it clear from the beginning it didn't want to sell the land and preferred a swap.

He suggested that may help explain why the two sides are at loggerheads.

"Since land exchange was not going to be considered by the City of Winnipeg, Shindico has now said this (the money the company is asking for the land) is the impact on them. We don't agree with that impact and we've reached a stalemate."

Area councillor blames mayor

River Heights Coun. John Orlikow said the $1 million difference between the city's assessed value of the land and Shindico's is just the latest "fiasco" that he blames on the mayor's "lack of leadership."

“It doesn’t take an MBA to know you shouldn’t put a building on land you don’t own and haven’t leased. That’s common sense,” he said.

Orlikow said it's not the first time city officials have backed taxpayers into a corner.

"I don't see how we have a choice," he said. "What are the other options? [That] we don't expropriate the land? It's kind of like the police station. We get boxed into a corner. We don't really have a lot of choices in the end."

He said when the city has surplus land, it should be put on the open market. ​

The city report (see below) recommends proceeds from the sale of three city owned properties, two of which were fire hall locations, go towards the Taylor land purchase.

If city council votes in favour of expropriation, the matter will go before the Land Value Appraisal Commission, an independent tribunal that determines the value of land acquisitions. Its ruling is final.

Shindico declined to comment.