Thank you, Mr. Speaker. Mr. Speaker, after the information that has been gathered on the Lahm Ridge Tower deal I will now tell a concise story as I believe the events took place. Al and Hazel Marceau owned the Lahm Ridge Tower. Due to downsizing and the uncertainty with respect to government office space in Yellowknife the Marceaus were unable to extend their leases which reached the end of two consecutive five-year terms in the summer of 1995. Although there were two remaining five-year extensions available under the terms of the original lease, negotiations were terminated and the lease of the Lahm Ridge Tower reverted to overhold or month to month leasing. An internal working document with the Department of Public Works and Services called the Yellowknife office space rationalization plan was developed with at least one draft specifically sighting the termination of the Lahm Ridge leases. The Minister indicated
last week that there was no way of knowing how widespread of the knowledge of the options contained in this document might have been.
After several unsuccessful attempts to extend their leases the Marceaus put their property up for sale listed with a local real estate company at $5.5 million. A southern based company with significant land holdings in Yellowknife called Urbco became interested in the tower and looked at it two or three times. They backed away from it when Public Works and Services would not play ball on lease extensions making financing and purchasing the property unviable. The Marceaus are now between a rock and a hard place. An unleased building the size of the Lahm Ridge Tower is a huge liability in a depressed rental market with over 120,000 square feet of vacant office space. Enter Mr. Bailey and Mr. Mrdjenovich, they looked at the property and made an offer of $4 million. This is $1.8 million less than the declaration of values signed by Mr. Bailey at the time of the transfer. The offer to purchase was subject to financing. Mr. Marceau then went back to Public Works and Services and negotiated the not so burdensome conditions of the lease extensions. The department readily admits that they knew of the pending sale and who the players were. The conditions were easy to achieve given that the deal was very attractive. This is evident by the lender providing more than the purchase price by $200,000 to carry out the renovations and upgrades. This was all accomplished without the necessity of a down payment because there is still a $1.6 million spread between the purchase price and the totally justifiable declared value of $5.8 million.