Radio-Canada assures that it got the right price by reselling its huge land in downtown Montreal in 2017, for $ 42 million. However, less than three years later, a promoter is preparing to resell only a quarter of it for $ 114 million, our Office of Inquiry learned.
Vincent Chiara, one of the biggest real estate players in Montreal, is the one who had won the tender in 2016 to buy the quadrilateral where the dilapidated brown tower is located which houses the studios and offices of the public broadcaster.
He then parceled out this land and concluded an agreement with the developer Devimco to sell him part of it, which corresponds to the parking lots in the southwest part of the land.
“I would say you have good sources!” Said Vincent Chiara to our Investigation Office, without wanting to confirm the amount of the upcoming transaction because it is bound by a confidentiality agreement. One thing is certain, the promoter agrees that he is going to make a significant profit.
The Mach Group, of Vincent Chiara, and Devimco should go to the notary in September to formalize their “firm agreement”, which includes progressive disbursements according to the number of units built.
Devimco intends to erect a 15-storey condo building there first, called Auguste & Louis. The two parties had not disclosed anything about the acquisition cost when the project was unveiled last February.
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“The market in our favor”
Vincent Chiara refuses to quantify his investment in the site so far.
“The amount I put in is not important,” he says.
According to him, the quality of the development plan that Mach put in place largely contributed to the good price he got.
“There is also a part of that for which we are not responsible: it is the market, agrees Vincent Chiara. It is not because we are geniuses: the market is in our favor … “
The businessman holds several skyscrapers with the Saputo-Borsellino family in downtown Montreal.
At Radio-Canada, the director of public relations, Marc Pichette, still defends the sale of the site to Vincent Chiara.
“Groupe Mach’s offer was accepted after a robust tendering process and it was the best from a financial and qualitative point of view,” he wrote in an email. Factors had been considered […] such as the need to decontaminate the property and the fact that the revitalization of the tower and site purchased […] could only start after CBC / Radio-Canada’s move to the new House. “
Devimco’s offer is conditional on the completion of discussions between Mach and the City of Montreal on the infrastructure to be built in the new neighborhood.
Chantal Poirier pictures
Michel Bissonnette, VP Radio-Canada
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“We have to sign agreements,” says Vincent Chiara. Either party could withdraw if they are not signed in July. “
Devimco, at the origin of the DIX30 and the real estate boom in Griffintown, works here with its usual partner, the Solidarity Fund QFL. Devimco did not wish to answer our questions.
Radio-Canada leaves its old tower to settle by 2021 in its new house at the corner of René-Lévesque and Papineau.
The costs of fitting out this new building and the finances of the public broadcaster have often hit the headlines in recent years.
In 2016, the Trudeau government announced that it was providing additional funding of $ 675 million over five years to Radio-Canada.
In November 2019, Michel Bissonnette, vice-president of the crown corporation, said that the development of his new house would cost $ 287 million, or $ 17 million more than expected. Radio-Canada will also pay $ 22 million a year to stay there, because the building does not belong to it.
In April, a spokesperson for the state-owned company explained that it had to call to order some of its sellers who allegedly lowered the price of advertising and thus exerted excessive competition on private broadcasters.
$ 1.2 million in rent to stay in the tower
Photo d’archives
Vincent Chiara says he has invested $ 42 million without earning significant income to date. “You have to be a visionary, and you are compensated when your vision is good and you put together a file accordingly. ”
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According to Vincent Chiara, Radio-Canada pays $ 1.2 million in net rent per year to stay in its tower while waiting for the new “house” to be completed.
Rent “not very high,” he says.
The public company refuses to confirm this amount.
In comparison, Radio-Canada will have to pay more than $ 1.8 million per month, or $ 22 million per year, to live in the new building that Broccolini is building for it. However, this amount includes electricity and municipal taxes.
Chiara claims that the land he has acquired costs him more than the rent paid to him by Radio-Canada until the crown corporation leaves the premises definitively.
He claims that his business spends about $ 2 million in interest per year on the loan contracted to buy the site.
Long move
The move of the Crown corporation to its new building began last spring. It should be completed in spring 2021, with the arrival of the information teams in the new house.
Why such a delay?
“The initial schedule was ambitious. In order to minimize the risks inherent in the technological transition and ensure the sustainability of our operations, the choice was made to spread the move over a longer period, ”said spokesperson Julie Racine.
Of course, COVID-19 has also contributed to the delays in recent months.
In fact, Radio-Canada and the builder of its new building, Broccolini, are in litigation regarding this move. The public company judges that its new house is not completely finished, while the promoter ensures that everything was ready to accommodate all its teams on December 31, as provided for in the contract.
“A good investment! “
Courtesy image
Devimco’s Auguste & Louis condos project on Radio-Canada’s former grounds.
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Experts consulted by our Investigation Office believe that the Mach Group of Vincent Chiara has obtained a very good price for the land it is preparing to resell to Devimco.
“At first glance, it seems very expensive to me,” says Pierre Laliberté, appraiser and consultant in real estate. If confirmed, it would have been a good investment for him! “
Broker at CBRE, Benoît Poulin also says he is surprised by the price. The buyer plans to build 2,000 condos on the site, which amounts to approximately $ 57,000 per door just for the purchase of the land.
“The market is made very expensive in downtown Montreal,” he says.
Several factors could explain this high price: Mach may have offered attractive financing conditions.
“If the land sold is completely serviced with infrastructure and decontaminated, it also contributes,” says Pierre Laliberté.
One thing is certain: by selling the south-west part of the site, Vincent Chiara divested himself of the “crown jewels”: closer to the city center, no structures to demolish or adapt …
The promoter risked big by buying the site by invitation to tender, with the considerable challenges represented by the presence of the tower, studios and huge underground spaces, says Pierre Laliberté. “In 2017, nobody wanted this site. “
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