The Caisse de dépôt spent $17.1 million on land that it largely did not need, located along the route of the Réseau express métropolitain (REM), before reselling it 3 years later for a quarter of the price.
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Taken with the need to deliver the REM in a hurry and the obligation to carry out expropriations, the Caisse seems to have made a very bad deal during a transaction along the branch of the REM which goes to the northwest of the metropolis.
Our Bureau of Investigation found that in January 2019, the Caisse acquired land located in the Saint-Laurent borough for $17.1 million.
In March 2022, it disposed of more than 75% of this property, including a 51,000 sq. ft. warehouse, for only $4.5 million. (see map below)
We are therefore talking about $12.6 million less, not to mention that the value of land has increased by nearly 30% in this sector during the three-year interval.
"At that price, I would have taken it back right away and I would have made my office there," says the president of Dex Clothing, Jacky Alloul, who was expropriated from this warehouse in which he says he put "a lot of 'silver ".
The March 2022 transaction now seems all the more ill-advised given that the much smaller neighboring warehouse is currently up for sale for $12.7 million.
Forced to expropriate more
Contacted by our Bureau of Investigation, CDPQ-Infra, the subsidiary of the Caisse which manages the REM, admitted that it did not need all of the land when it made the transaction of 17.1 M $ in 2019.
She wanted a small strip of land along the railway line, but had to buy the entire building because the owner targeted by the expropriation notice felt that selling off a small piece of his building would be too harmful to his business.
“I would have liked to stay. But they took a 5,000 sq. ft. at the back, so I could no longer operate with the size of the company I have,” explains Jacky Alloul.
The Caisse did not contest this request and took out its checkbook, thus avoiding legal delays.
“The settlement of this file made it possible to free up the land within the time necessary to carry out the work of the REM, explains the spokesperson for the REM, Emmanuelle Rouillard-Moreau. The amount paid is based on a 2018 real estate value and includes all damages governed by the Expropriation Act.”
1. The Caisse wants to acquire a small portion of the building from 3925234 Canada inc. (area in red).
2. Since the company says it cannot operate without its entire building, the Caisse expropriates the entire land for $17.1 million, including the vast warehouse in this photo (yellow and red areas).
3. The Caisse also wants to obtain a small portion of land belonging to Max Latifi, which is used to store fences (area in green).
4. Max Latifi disputes the amount offered. The Caisse sells him almost all of the land it bought in stage 2 for $4.5 million (area in yellow), in exchange for the abandonment of Latifi's challenge.
The lucky winner of the transaction in which the Caisse lost big is none other than the uncle of Canadian Formula 1 driver Nicolas Latifi.
Placements Mecyva, owned by Max Latifi, was able to buy the building for $4.5 million.
Mr. Latifi made his fortune in the food sector, notably managing the companies Aliments Triomphe (Nostrano, Tour Eiffel, Belle Bretagne, etc.) and Aliments Fontaine Santé.
Owner of the neighboring land, Mecyva was in a strong position against the Caisse, which wanted to expropriate it from 2017.
He claimed $3.8 million
While the Caisse offered $490,576 for part of its land used for storage, Mecyva instead claimed nearly $3.8 million in damages.
In 2018, before the Administrative Tribunal of Quebec, Mr. Latifi argued that the expropriation was harming the expansion project of another of his businesses, Fontaine Santé, located next door.
The Caisse settled out of court rather than go before a judge and thus sold the warehouse it had just expropriated for $17.1 million for $4.5 million, against Mecyva abandoning its claim.
The latter also received just over $400,000 in compensation.
"We agreed to this agreement given that the expropriation was both imposed and unavoidable, even if we opposed it and that it caused us significant inconvenience," said Mecyva spokesperson Jean-Maurice. Duddin.
2019 awards
If the sale was carried out at the beginning of 2022, the price was fixed three years ago, defends the Caisse, with an evaluation report in support.
“The amount of the sale was based on the market value of the building as of 2019. The value of the land between 2019 and today has increased considerably,” explains REM spokesperson Emmanuelle Rouillard-Moreau.
Three years after the expropriation, Fontaine Santé has not expanded its factory, the building still being occupied by a fencing company, formerly owned by Max Latifi.
“The notice of expropriation made any expansion impossible,” explains Mr. Duddin. Fontaine Santé had to acquire another building on the island of Montreal to house part of its operations.”
♦ In 2021, Mr. Latifi sold the majority of Fontaine Santé shares to a private US investment fund.
