A Winnipeg councillor has questioned whether the city is getting a good deal on an agreement with Thermea spa that effectively means it pays no money to lease land from the Crescent Drive Golf Course.
The spa rents the land from the city for $25,000, but the city pays the same amount back to the business for use of a newly built pro shop and sun room, officials with the city’s golf services department told the standing policy committee on innovation on Monday.
“From a from a taxpayer perspective, we’ve got a piece of property that we’ve put out there, that we’re not realizing, or will not realize any sort of positive spinoff, shall I say, for ratepayers,” said Transcona Coun. Shawn Nason.
The lease, signed in 2011, is set to last for 25 years.
“We have all these other centres, community centres, childcare locations. I don’t think they get that kind of deal, especially not with a 25-year lease,” Nason said.
Originally, the terms of the deal had the city paying Thermea $40,000, but Winnipeg Golf Services chief operating officer Ben Fey said that had recently been changed to $25,000.
Nason asked how the city arrived at the $25,000 valuation for Thermea’s lease, but Fey replied that the deal had been made before he started in his position.
The spa, which opened in 2015, is owned by Quebec-based Groupe Nordik.
Company spokesperson Marianne Trotier said in an email the city pays a lease “because Groupe Nordik has built and paid for the construction of a new pro shop and a sunroom to improve the experience of citizens who enjoy the golf course, which is owned by the city.”
A pro shop that had been on the site before the spa was built was torn down.
The company spokesperson also said Thermea pays the maintenance for the part of the land rented to the city, and provides parking for the golf course and spa, along with property taxes and water and sewer fees.
Nason wants to know how many other similar deals the city has made.
“I think we should have a review of deals like this and any others that may exist. And if it doesn’t make sense for the taxpayers, look for a way to make it make sense,” he said.
Thermea has begun cross-promotional events with the Crescent Drive Golf Course, but Fey said it’s too early to tell if they have resulted in significant revenue increases at the golf course. Since the spa opened, attendance at the golf course has fluctuated, but it has gone up in the last two years, Fey said.