Wellington Square

Archive for February 21st, 2012

What about the $7 million?

- February 21st, 2012

With Tuesday evening’s announcement that Wipro Canada Ltd. is coming to Brantford, it did throw some interesting questions out regarding the city and the Market Square Mall.

Avid readers would remember that back in September 2011, the city negotiated an agreement with G.K. York Management Services to buy back the so-called “head lease” at the Market Square Mall. In an arrangement that only property lawyers could love, the city had bought the mall in the mid-2000s but entered into an agreement with G.K. York. G.K. pays the city a lease, but then leases the space in the mall to other businesses.

G.K. came to the city in August 2011 looking to sell the lease back to the city— which the city agreed to buy for $7 million. That deal, according to CAO Ted Salisbury at the time, was to close in January. Given we’re now in February, one would think it had closed. Meaning, with Wipro paying some kind of lease to Bell Canada for the space it will use to hire the people Bell would have hired and do Bell’s work, the city is still two steps removed.

Mayor Chris Friel confirmed after the council meeting Tuesday that G.K. York still holds the head lease at the mall. Meaning — follow this if you can — Wipro pays Bell. Bell pays G.K. York. G.K. pays the city. For space in a building the city actually has the title to. What was supposed to be resolved by now with the city outright owning the building has obviously changed.

From one side of the coin that means the city hasn’t paid out the $7 million it promised to buy out the G.K. York lease. From the other, something has obviously happened behind the scenes to keep G.K. York in the picture.