Winnipeg to developer Terracon: We never had a deal

The City of Winnipeg deniesit reneged on a deal with an industrial developerand thenused confidential information from the scuttled plan to work out its own deal with a Canadian dairy giant.

In July, TerraconDevelopments Ltd.sued the city overthe death of a joint venture with the city that would haveconverted237 acres of vacant land alongside the Winnipeg Aqueduct into a new industrial park. Terracon claimed the city cancelled the deal after Terracon built a $1.6-million road into the site.

Terracon also claimed the city abused confidential information when it entered into a deal to sell part of the land to Parmalat Canada, which the developer claims was "part and parcel" of its own plans.

The potential damages at stake could be in the millions, asTerraconis seekingcompensation for lost potential business.

• Developer sues city over failed industrial joint venture and alleges city stole dairy-plant deal

In a statement of defence filed beforeCourt ofQueen's Bench on Sept. 8, the city deniesmost ofTerracon'sclaims.

The city argues it could not have reneged on any deal because the joint venture agreement was not completed.

"At no time was a definitive joint ventureagreement, written or oral, ever entered into as the parties did not come to an agreement," the city argues, referring to a disagreement over whetherTerraconwould be exempt from paying education taxes on the property.

The city also arguesTerraconwas aware anyexpenses it incurred, including the road construction, were its own responsibility until "an executed definitive written joint venture agreement" was entered into and approved by city council.

The city also denied it abused the terms of a confidentiality agreement and askedTerraconto prove such an allegation.

• Winnipeg committee votes to cancel Terracon joint venture deal

• City strikes quick deal to keep Parmalat milk plant in Winnipeg

The lawsuit between the two parties dates back to 2009, when city council first votedto ask city staff toproceed with a joint venture that would have seen Terracon extend services into land south of the existing St. Boniface Industrial Park and Waters Business Parkand then sell off this landon behalf of the city.Both sides were supposed to sharethe profits.

The joint venture was never concluded. City officials said it fell apart in 2015 because Terraconinsisted on being exempt from paying education taxes on the property.

In July 2015, council rescinded the joint venture agreement and then approved a city dealto sell part of the land to ParmalatCanada Inc. for $2.6 million. Both the city and province agreedto pay $8.2 million to service the new dairy plant, which will soon replace Parmalat's existing operation in Old St. Boniface.

Initsstatement of claim,Terraconcontendscity officials stopped working on the deal during the 2014 civic election.

Terraconclaims it told the city a newParmalatplan was "part and parcel" of the new project and had been assured itwould not have to pay property taxes on the site.

Ultimately,Terraconclaims the city made misleading claims that led the developer to spend $2 million on fees and a "useless road," abandoned the deal and also abused confidential information aboutParmalatto enter into its own deal with thedairy company.