May 8, 2007

Taxpayers renovate privately owned office complex

Rosdev shows sale-lease-back scheme should be killed

OTTAWA – Millions of taxpayer dollars have financed improvements to a privately owned office complex leased by the federal government, raising red flags for those concerned about the federal government's building sale and lease back plans.

The federal government has spent millions upgrading the fire alarm system, installing new windows and carpets and making other improvements at L'Esplanade Laurier in Ottawa which is owned by the Montreal-based real estate giant The Rosdev Group. Ottawa is also in the process of replacing the drinking water system at L'Esplande Laurier which has shown lead contamination since May 2002.

“Millions of dollars are being spent by taxpayers on improvements to properties that are owned by a private landlord. This experience shows how badly the federal government's sale and lease back scheme could end,” said Lina Aristeo, Director of UNITE HERE's Quebec Council, the union which represents some of Rosdev's employees in the US.

Safety and maintenance issues have given rise to a multi-million dollar legal battle between the Rosdev Group and the federal government. Internal federal documents allege that “Rosedev withheld payments and service which caused the erosion of the buildings' value as well as tenant satisfaction”. After the Rosdev Group failed to address serious maintenance and safety problems, the federal government stepped in, took over as manager of the complex and made significant improvements to bring it up to standard.

Among its real estate empire that exceeds $1 billion the Rosdev Group also owns Les Terrasses de la Chaudiere. Combined, some 10,000 public service workers are housed in these buildings, most of whom are represented by the Public Service Alliance of Canada.
At a news conference in Ottawa today UNITE HERE Canada joined with the PSAC to call for the federal government to scrap the sale and lease back scheme.

“I think that most Canadians would agree that this give away needs to be stopped now,” PSAC National Vice-President Patty Ducharme said of the sale and lease back scheme.  ”Canadians would not sell their houses and then rent them back again. Canadians own these buildings. Where is the sense in selling these valuable assets and then having to pay rent for them?”  According to the PSAC, in the long run the sell-off will cost the government – and Canadian taxpayers – considerably more than it will to operate the buildings they already own.

The federal government is not the only tenant Rosdev has mistreated. The company has been found liable for overcharging another commercial tenant.

“We sympathize with the federal government. And we commend Ottawa for cleaning up the mess left by Rosdev's negligent management practices. The Rosdev Group has a long history of abusive behaviour. In keeping with its anti-worker behaviour, this company has also shown itself to be a bad landlord to the federal government and the Canadian taxpayer,” said Ms. Aristeo.

Ottawa Centre MP Paul Dewar has written to Public Work Minister Michael Fortier urging the Minister to declare any sale of federal buildings off limits to Rosdev. Dewar released a statement today urging the federal government to abandon the sale and lease back plan all together.

“This government is clearly turning its back on Canadian taxpayers who have paid for these buildings and who may be forced to leaseback in a deal that would guarantee the new owner a tenant for 25 years – compliments of the same taxpayer,” said Mr. Dewar.

UNITE HERE Canada announced today that it will send a marble tile to remind every Member of Parliament that the unfulfilled promises, poor maintenance and high legal costs for taxpayers associated with the L'Esplanade Laurier lease and the Rosdev Group provide the perfect example of why the federal government should abandon its sale and lease back scheme.

For information:
Jim Thompson 613-447-9592