N.L. plans to buy pricey land for new hospital. Turns out they owned it 8 years ago

The Newfoundland and Labrador government is planning to buy back the land it sold to H3 Developmenteight years ago for the site of a new hospital in St. John's and the infrastructure minister saysit's a good deal.

According to the land grant issued in 2016, H3 Development Ltd. bought 38 acres of Crown land nearKenmount Road for $3,215,000 putting the cost per acre at $84,605.

The government is now buying back 17 acres from the company, in addition to the10-acre donation that was announced earlier this month, said Infrastructure Minister Fred Hutton.

"It is definitely a good deal in my opinion, for the residents of Newfoundland and Labrador," Hutton told reporters on Wednesday.

Last week, the provincialgovernment announced thereplacement for theSt. Clare's Mercy Hospitalwould be located off Kenmount Roadon that10 acres of land being donated by H3 Development,a joint venture between the Hickman automotive group and companies owned by Glenn Hickey.

However, it was later revealedthe land donation was actually part of a $23 million agreement for 54 acres owned by H3. The deal hasn't been approved yet, but if successfulit would mean approximately a price tag of $400,250 per acre.

Hutton said anyone who wanted to buy an acre of H3-owned land would pay $485,000. But, he said, the government is getting a lower price.

"The market value on this if you total it all up we're paying $359,000 per acre, which is well below the asking price," said Hutton.

Cheaper plot available

In the House of Assembly Thursday, provincial Opposition leader Tony Wakehamquestioned whether that was actually the best deal.

A nearby 55-acre property, 720 KenmountRd., was sold for $575,000 in October 2022, Wakeham said. That's $10,400 peracre.

Wakeham added that another piece of land located at 543 Kenmount Rd., which is 70 acres, is up for sale at $1.75 million $25,000 per acre.

"Again, Iask the minister, are we getting the best value for our dollars?"

In the legislature, Hutton defended the plan to purchase the land after hearing these figures.

"Almost half the province are going to live within about a 15- to 20-minute drive of this facility," said Hutton. "They can access it through the Outer Ring Road. They can access it through the other busy roadin the province, one of the busiest, Kenmount Road.

"So yes, it is a good deal. And it's a good deal for Newfoundland and Labrador residents who require better health-care service."

Developed land

Hutton said there could be a tax benefit for H3'sland donation, and it has happened in the past with other donors.

Since H3 Development bought the Crown land eight years ago, he said, the company has made investments to the area through roads,water,sewer infrastructure anda private pump station.

"This was purchased at a time eight years ago, land prices were quite different up there. There was no infrastructure. They've spent well in excess of $10 million," said Hutton.

He said he believes both the donation and acquisition of land will be closed around the same time, adding that the deal is with lawyers who are going through surveys and land deeds. Hutton said heexpects the dealto go smoothly.

"The donation is basically what prompted our desire to purchase more land and to build this hospital there," he said.

Need more land

Hutton said it was H3 Developmentthat approached his department over possibly donating 10 acres andthe owners believed that land would be enough for a hospital.

However, he said, the government realized that more land would be required.

"It became apparent that we were going to need more land and we entered into a negotiation with them at that point," he said.

The St. Clare's footprint is currently 5.5 acres and, Hutton said, governmentwanted to model its replacement on Corner Brook's new Western Memorial Regional Hospital, but they needed to find a spot where itcould fit. He saidtheold Grace Hospital and old Waterford Hospital sites were not suitable.

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