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ICBC shopping for real-estate hotshot to invest our cash

'Gambling' slammed by taxpayer advocate

Damian Inwood, The Province

Published: Tuesday, May 06, 2008

The Insurance Corp. of B.C. is searching for a real-estate hotshot to help buy $100 million in property -- almost half of it in Ontario.

But the move was slammed yesterday by Maureen Bader, B.C. director of the Canadian Taxpayers Federation.

"It's one thing to be investing your own money in real estate and another to gamble the taxpayers' money," said Bader. "ICBC lost a lot of taxpayers' money on the Surrey Central City project. Taxpayers should be very concerned."

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ICBC spent $182 million to build the 25-storey Surrey office tower, after buying an existing mall for $49 million in 1999.

When the tower was left vacant in 2001, an independent appraisal resulted in writedowns totalling $141 million.

Then the Liberals paid $70 million to buy space for the Surrey campus of Simon Fraser University in the tower.

Last year, Central City sold for $245 million.

"The history of Crown corporation real-estate investments, and ICBC in particular, are a real warning flag," said Bader. "The Surrey Central City project was a drag on taxpayers from the very beginning."

According to an ICBC request for expressions of interest, 45 per cent of the funds would be spent in Ontario, with a further 25 per cent each in B.C. and the Prairies and five per cent split between Quebec and the Maritimes.

"Like all insurance companies, we invest money into real estate and other investments," said ICBC spokesman Doug Henderson. "It's common practice among insurance companies to invest those premium dollars to ultimately reduce the costs for policy-holders."

Henderson said that ICBC's target is to have five per cent of its investment portfolio in real estate.

Right now, with about $201 million invested, the real-estate portfolio stands at 2.1 per cent, he said.

"So what we're doing is exploring outside real-estate-adviser services to manage a portion of our real-estate portfolio," he said. "We're trying to move closer to our target of five per cent."

According to the ICBC posting, the consultant must have a minimum of five years' experience in institutional real estate and be managing at least $200 million in assets.

Applicants must have a "proven and verifiable record of competitive performance."

ICBC plans to invest $35 million in office space, $35 million in industrial real estate, $20 million in retail property and $10 million in residential property.

The minimum investment would be $5 million and the maximum would be $25 million.

Applications for the consultant's job closed at the end of April and ICBC may draw up a shortlist for interviews.

dinwood@png.canwest.com

WHAT DO YOU THINK?

E-mail provletters@png.canwest.com or fax 604-605-2223. Please include your name and address.



© The Vancouver Province 2008
COMMENTS ON THIS STORY
Max
Tue, May 6, 08 at 09:46 AM
Real Estate is an excellent investment. However nobody at ICBC is smart enough to make a good deal. So no, I think they should not do this.
Mike S from Vanderhoof
Tue, May 6, 08 at 09:51 AM
They have over $200million invested and thats about 2%. Math was never my strong suit, but that quick figures to over $10BILLION of our money. I know...why not give some back to us?
Tom
Tue, May 6, 08 at 10:01 AM
I think the quicker we dump these bums the better off we will be,Insurance is just a sideline for ICBC if their investments fail they just make it up by raising our car insurance rates. ICBC says they invest to keep our rates low..... BULLCRAP They know if theres a failure WE are there to bail the bums out. This subject is extremely hard to talk about and keep it clean... Whats happening with the scam ??? anyone following up on it ???
Jeff
Tue, May 6, 08 at 10:12 AM
Boycott ICBC.....DECREASE YOUR COVERAGE!!!! Most all of you are paying TOO MUCH. ICBC is the FEAR-MONGUERER. Biggest Scam there is. Decrease your coverage to 200,000.....cancel your comprehesive and collision coverage. Ask your Autoplan agent about UMVF ( Uninsured Motor Vehicle Fee) that would allows you to pay $500 per year for a set of plates ( no insurance) and the government pays out victims should you be in an accident. Sometimes, insurance is NOT an option. ICBC should be addressing DAILY better ways to improve driver quality and to the problem of older roadways in this province that are in a state of repair. I think that if ICBC ventures off into these type of investments, that dividend checks should be sent to policyholders, because you know if they fail in their investment endeavours, you and I will pay in the long run.
eric cruz
Tue, May 6, 08 at 10:30 AM
How about lower rates for drivers instead of real estate deals? Get rid of this corporation and let's have some open market insurance. When is someone going to look out for taxpayers?!
garage
Tue, May 6, 08 at 10:35 AM
where else would they park their questionably obtained vehicles ? new garages ! and then there's the new offices that our over inflated premiums will pay for ! another golden boy with a platinum wage package paid for by your invested premiums. another golden handshake dismissal clause. and in the end despite any " gains " that those invested monies make the average , accident free driver in bc will have their premiums rise yet again. lovely.
bill mosengrazen
Tue, May 6, 08 at 10:41 AM
Well this pretty well says it all folks. ICBC THE CROWN CORP. wont invest its money in the province it does business in. How that for confidence in our BOOMING ECONOMY.
Concerned Auto Glass Guy
Tue, May 6, 08 at 10:49 AM
SHORE UP ZERO TOLERANCE FOR FRAUD POLICY FIRST IF ICBC WANTS TO BUILD UP THE TRUST WITH POLICY HOLDERS THEY SHOULD CONCENTRATE ON SHORING UP THE ZERO TOLERANCE FOR FRAUD POLICY. THEY SHOULD ALSO MAKE SURE ALL CEO'S HAVE LIVED UP TO ICBC'S CEO'S TERMS OF REFERENCE.
slammed
Tue, May 6, 08 at 10:55 AM
This is so typical of the free for all bureaucracy our dimwhitted puppets deem worthy. This crown corporation has gone too far over the edge and beyond. When ICBC has too much taxpayers money that they don't know what to do with then you know there is a major crisis. Yet another scandal unfolding? How much corruption is at the hands of this corporate serial offender? Rather than trying to decide where to invest all this surplus cash why not be a GOOD corporate neighbor and HONESTLY settle all the outstanding personal injury claims backlogged purposely in hopes that the claimant either settles for peanuts out of frustration or gets hit by a bus. Why not reduce premiums to those drivers that deserve a good drivers rate? Why not create a good corporate image rather than the scandalous vultures you are? Because ICBC doesn't have to. They can take as much taxpayers money as they possibly will be allowed and do whatever the corrupt puppets want. Don't be surprised when we find out that ICBC has a 5 star hotel in some tropical hot spot which is exclusive only to their bigwigs and all the other corrupt puppets voted into our joke of a government.
Kim
Tue, May 6, 08 at 11:10 AM
As an inefficient beaurocratic machine, ICBC has a disgusting track record for managing taxpayer-funded business, except of course when it comes to bloating their own over-paid wages (aka bonuses). Therefore, it will not be a surprise when this fiasco fails and yet again insurance goes up...
John
Tue, May 6, 08 at 11:11 AM
Thanks I would rather invest my own money so how about returning some money to those of us who have a good driving record with no accidents, and reducing insurance rates, obviously they have too much money, so give back to everyone they are taking the money from - ICBC should go the way of the dodo bird, it has run its course
taxedoutbypoliticians@canada.com
Tue, May 6, 08 at 11:29 AM
Why is their no vehicle insurance choice for B.C. drivers? Now they have a large amount of extra cash because of overcharging! Stinks of communism........crown corporation, same thing.
phartz
Tue, May 6, 08 at 11:41 AM
So why do the costs for policy holders always go up? What a pile of BS. ........... much like collecting more for rainy day funds?
Mr. Big
Tue, May 6, 08 at 11:52 AM
Reduce the costs for policy holders??? SInce when has this ever happened since 1975 - and $20/yr doesn't count. I still think ICBC is and will be a cheaper alternative to private insurance (private insurance has proven to be more expensive overall), but I think an overhaul is needed for ICBC. Besides investing our money in areas they shouldn't, they need to get rid of a LOT of high priced office clerks. I know someone that works there and he laughs at he perks everyone gets (such as every second Friday off and 5+ weeks vacation). Suggest Gordo buy out the high priced 'talent' and hire new employees at lower wages.
Todd
Tue, May 6, 08 at 12:24 PM
What do you think private insurance agents would do? Of course they invest in things like real estate and the stock market! Would you rather they put the money they are required by law to hold in term deposits to earn 2% on? As for improving roads and funding counter attack... do you other insurance companies doing that? Do you think a private insurance company will pay for that? No and do you know why? Because they have a financial duty to maximize profits for their shareholders... ie no money to improve roads, no money for counter attack, no money for slow down advertizing. Make a phone call to Calgary or Toronto and see how much your insurance would be there before you spout off about how you are getting ripped off. No one likes paying money for something they hope they will never use, but be careful what you wish for... you might get it.
Mr. Big
Tue, May 6, 08 at 12:56 PM
If ICBC is a monopoly, why do they need to advertise or run tv commercals? They are playing with our money and laughing...
John
Tue, May 6, 08 at 01:05 PM
Comments on private insurance are out of whack - I just relocated from Alberta, where they have private insurance, travelling to and from work with a higer end car cost $600 per year - period. It costs three times that out here and the roads still suck, not to mention that road maintenance is also where your property taxes are suppose to be applied to, so exactly who is fixing the roads, they dig them up and don't put them back together properly - the point is BC pays way too much for automobile insurance, bad drivers are the ones reaping the benefits of high premiums, because irregardless of your record you only ever get 43% off, how is that fair?
gmac
Tue, May 6, 08 at 01:39 PM
Recall some years back when Greyhound Bus-Lines bought a few sretched DC-8's to get into the Airline Industry. Remember there motto leave the driving to us. Well they should have left the flying to the Airlines back then. Needless they didn't last long. The same goes for ICBC leave the Real-Estate to the professional and think about giving the good drivers a better rate.
jd
Tue, May 6, 08 at 01:53 PM
ICBC should stick to selling insuance,if they cannot make it step aside and let someone else in.We the drivers pay a pemium price for insurance and gas only to drive on substandard roads, ie: the Hope Princeton Hwy...a disgrace..full of potholes,cracks and faded or no lines .Where are the gas tax dollars going ?????
Private Insurance
Tue, May 6, 08 at 03:52 PM
does what it is suppose to do, it charges those who have worse records more money, if you have speeding tickets, accidents, then yes through private insurance you will pay more, but excuse me for someone who has no tickets or accidents, I don't see why I should pay for those morons who can't drive - when I insured under private insurance my insurance was a 1/3 of what I pay now, so stop listening to people in Calgary, they think they pay too much for everything
insurance guy
Tue, May 6, 08 at 07:14 PM
TODD I PAY DOUBLE FOR INSURANCE IN BC THAN IN ALBERTA I HAVE HAD A CLEAN DRIVERS RECORD FOR 17 YEARS NOW AND MY INSURANCE DOUBLED WHEN I WENT TO BC WHY I HAVE TO PAY FOR YOUR BAD DRIVERS RECORD AND THAT OF YOUR KIDS.... MAKE THE ONES THAT USE ABUSE IT PAY THERE FAIR SHARE OF IT... BUY THE WAY I WORKED FOR ICBC AND THERE DATA ON INSURANCE RATES IS NOT CORRECT ITS CALLED PROPAGANDA... GET YOUR HEAD OUT OUR YOUR UNION REP HEAD AND STAY WITH THE FACTS
Todd
Wed, May 7, 08 at 05:06 PM
Please note that I said Calgary, not some backwater, 1 stop light, Albertan town. My driving record is clean, I am fairly antiunion and my kid is 6, so he doesn't drive yet. Maybe all of you Albertans ought to go back to Alberta and stop clogging up our roads and driving up our insurance rates... that would be better.
Insurance guy
Thu, May 8, 08 at 08:44 PM
Todd , Insurance companies have no right to build roads, put up traffic lights and controll the motor vehicle branch. They are insurance companies and its the responsibility of the goverment to supply those services... Buy the way most insurance companies that are private do promote inititives that the people want. you better look at the facts.... and Todd I am a BC'er that moved to Calgary and back to BC.... ICBC insurance rates are double what I paid... I had better service in the private sector AND WAS TREATED LIKE A CUSTOMER NOT LIKE A PIECE OF GARBAGE. ICBC is not a NICE company to deal with. they need to let private insurance complete fully with them and then you will see them turn around. ICBC is the most corrupt company around, just look at the latest scam they have uncovered......
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