Quest University addresses potential conflict of interest regarding new partnership with developer

School president says measures have been taken to prevent a possible conflict

While acknowledging concerns about a potential conflict of interest, Quest University has announced it plans to partner with developer Michael Hutchison, head of Bethel Lands Corporation.

The school’s president, however, said that steps have been taken to prevent a conflict from arising.

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“We’re doing this to monetize the undeveloped lands for the sustainable financial support of the university,” said George Iwama, president of Quest University, speaking about the partnership with Hutchison.

The monetization of Quest’s land was a key stipulation from the province’s Degree Quality Assessment Board, which audited the school last fall.

Iwama said that working with developers like Hutchison allows the school to follow up on that recommendation.

This was a sentiment echoed in a school-wide communication that was sent to students earlier this week.

“Quest stands to gain a great deal from this partnership,” reads the email, which was attributed to Iwama and the school’s board of governors. “Banks and donors who have been reluctant to lend or otherwise support Quest have reacted well to the prospect of this partnership. Within a few years, we expect that major banks and donors will be more likely to grant Quest much-needed financial support.”

The relationship between Hutchison and Quest University has been a subject of debate among Quest’s student body. Most recently, a number of students expressed concern about the matter in a public forum in November.

Hutchison and his business associate David Fujimagari sit on the school’s board of governors.

Both of them are members of the Bethel Corporation, which owns some of the university’s student housing buildings.

The company owns the Riverside, Four Winds and Swift Creek residences, as well as the land those buildings were built on.

Bethel also owns the Ossa and Red Tusk buildings, but those facilities are on an agreement that will eventually see the buildings given to the school.

Quest University president George Iwama said the new partnership means that Hutchison may be involved in constructing buildings and other facilities on the university’s land as part of a school trust company.

“By category, they [Hutchison and Fujimagari] are in conflict,” said Iwama. “Just by label of being on the board and the named partner they are in conflict.”

As a result, Iwama said that safeguards were put in place to prevent any potential issues.

“They have recused themselves,” he said. “They have been outside deliberations concerning anything to do with this.”

“They described a vision for the partnership that we considered and then they would leave,” said Iwama, recalling board discussions on Bethel’s involvement.

There are seven voting members of the board of governors. When Hutchison and Fujimagari recuse themselves, five are left to deliberate on the matter.

As part of another safeguard, Iwama also said that the school will only sign onto the partnership if a third party has given the deal a good fairness opinion.

“It has to be favourable for us to proceed with this,” he said.

Accounting firm Deloitte is currently examining the partnership. The company will be looking at the deal to see if it lives up to commercial standards.

While the school has yet to sign off on the deal, Iwama described the general idea of how the partnership may work.

Iwama anticipates Hutchison may assist in the construction, marketing and selling of facilities on Quest land.

As of now, however, there have been no discussions about exactly what might be built or when.

Iwama said he also anticipated that, generally speaking,  profits would then be split in most cases roughly 50-50.

There may be a wide range of building projects. This can include school facilities but also commercial or residential units as well, so long as zoning allows for it.

If a land subdivision application that the school sent to the District of Squamish is successful, this could allow for greater flexibility with zoning.

At the time, Bethel acted as the school’s consultant for the application, which in November asked the municipality to allow Quest to divide its land into smaller parcels.

Phone and email requests for comment that were sent to Bethel Corporation were not returned.

Front desk staff said Hutchison was out of town until Jan. 29.

The Chief passed along a request for comment along with questions to Bethel’s front desk, which said Hutchison would be notified.

No comment was received by press deadline.

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