Steinbach city council voted 4-3 Tuesday evening to buy 40 acres of land from the Steinbach Fly-In Golf Club for $500,000. The city already owned the adjacent 40 acres and now owns the entire front nine of the golf course. It will be leased back to the golf club for one dollar a year. The golf club sold the land to help deal with its financial difficulties.
Councillor John Fehr moved approval of the deal.
"We have a budget line item where we buy properties that are in the best interests of the city. We do this on a regular basis and this is only touching that budget a little bit. I just felt this was a good move for us to purchase this and, whether it's seen as helping the golf course, the golf course helps the city all the time. We're a family and when someone hurts, we try to chip in and help them out."
Councillor Jac Siemens seconded the motion.
"We need to consider what the golf course has done for the City of Steinbach and we also see it as a land deal where we purchase property which is one of their assets that they feel they need to move. That'll help them in their financial position. I think it is a good move for the City of Steinbach."
Councillor Cari Penner also spoke in favour.
"I believe it's a good land purchase for the city. It's something that will help not only the city, but benefit the golf course as well. It's a piece that's adjacent to a piece that the city already owns and leases back to the golf course. I think it's a win-win for everyone."
Councillors Michael Zwaagstra, Earl Funk and Susan Penner strongly opposed the deal. Zwaagstra claims its nothing more than a grant disguised as a land deal.
"This was not a good deal for the City of Steinbach. The golf course had approached the city a little over a year ago asking for a $500,000 grant. That request was turned down. And then, at a closed meeting after that, the city is asked to purchase $500,000 of land and lease it back for a dollar a year, the exact same amount as the grant request. This is not a real land purchase. This is simply a backdoor way, behind closed doors, of giving the golf course the grant request that it originally asked for."
Councillor Susan Penner says this is not fair to other groups that come to the city for money.
"I think it is grossly unfair to all the other important non-profit groups who regularly request grants from the city but are turned down. I imagine many of these organizations would jump at the chance for the city to purchase their properties, then lease for a dollar year. They could avoid the grants process altogether, propose a land deal with the city and take care of their financial struggles as a result."
Councillor Earl Funk also thinks it's a bad deal for the city.
"I see it essentially as a bailout where the only benefactors are the golf course and their lender, the Credit Union. I don't see the city having much benefit in buying this land because we are leasing it back to them for a dollar. This is not a good return on our investment. Usually, when we buy properties, we lease them at their fair market value until we have a need or a plan to develop them."
Mayor Chris Goertzen says the city sets aside $300,000 a year for land purchases. He says they will use that fund to pay the golf course in three installments of $167,000 in each of the next three years.