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City secures property in case police HQ compensation is not paid – Winnipeg Free Press

Pabio November 2, 2024

The City of Winnipeg has yet to receive a single cent of the millions of dollars in legal compensation it is owed from the police headquarters project, but elected officials say they are confident that the money will be paid.

Advice. Jeff Browaty, chair of the finance committee, said there are assurances of a multimillion-dollar settlement of fraud and construction defect lawsuits launched over the Winnipeg Police Service headquarters project will be paid.

“From what I understand, although it may not be immediate… We now have secure assets to guarantee repayment of the monies owed. Apparently these guarantees were, these properties were guaranteed to us,” Browaty said.

MIKAELA MACKENZIE / FREE PRESS FILES The Winnipeg Police Service headquarters opened at 245 Smith Street in June 2016 at a cost of approximately $214 million, well above its original price tag of $135 million. of dollars. — MIKAELA MACKENZIE / FREE PRESS KITS

The Winnipeg Police Service headquarters opened at 245 Smith Street in June 2016 at a cost of approximately $214 million, well above its original price tag of $135 million.

Council approved the settlement in March 2023. Under its terms, the city would receive $21.5 million if payment was made in full within 12 months of council approval, $22.5 million if it was paid within 24 months, or $23.5 million if paid within 36 months.

If payment is not made within 36 months, the City will ask the Court of King’s Bench to pay it $28 million.

“There is a timeline of what the amount would be. If they were to default or fail to make it…certain properties were guaranteed to the city,” Browaty said.

Serious concerns about the WPS HQ project, which included the purchase and renovation of a former Canada Post facility, have plagued city council for years. The building opened at 245 Smith St. in June 2016, at a cost of approximately $214 million, well above its original price tag of $135 million. An external audit later revealed that the project had been seriously mismanaged.

The RCMP conducted a lengthy investigation into allegations of fraud and counterfeiting, but no criminal charges were laid.

In 2018, the City of Winnipeg filed a declaration seeking damages for alleged construction defects from main contractor Caspian Projects and structural engineering consultant Adjeleian Allen Rubeli, alleging that both companies had been “negligent” in their work at the head office. In 2020, the city filed a civil suit against Caspian, AAR and dozens of other defendants, alleging that a fraudulent scheme inflated the price of the project.

The allegations have not been proven in court.

In 2022, a judge found that Phil Sheegl, the city’s former chief administrative officer, accepted a bribe from the police headquarters project’s contractor and ordered him to pay the city $1.1 million in compensation. Sheegl lost the appeal of this decision in July 2023.

Mayor Scott Gillingham said he is confident both payments will be made.

“The city owes this money, the courts have said so, so I’m confident we’ll get these funds at some point,” Gillingham said.

The mayor said the city’s legal department is working on this issue.

“I am confident that the taxpayers of Winnipeg will get their money,” he said.

Advice. Cindy Gilroy said it’s frustrating that the city is still waiting for those payments as it struggles to balance its own budget.

She noted the money could help the city fund crews to clean needles and guns in city parks daily, which a recent report estimated would cost between $200,000 and $260,000 a year.

Gilroy worries that a tight budget could prevent spending from being approved.

“We know the city needs money. When we’re talking about $200,000 to help pay staff (to clean the parks), that could be very helpful. It worries me (that it hasn’t been paid),” she said.

In an email, city spokesperson David Driedger confirmed that the city did not receive any payment in either case, but “continues to take steps” to ensure that happens.

He noted that properties could be involved in the Caspian colony.

“If payment is not made by the deadline in the council-approved settlement, the city has secured several properties that would then be used to secure payment to the city. We are unable to share additional details at this time,” Driedger wrote.

Prime Minister Wab Kinew was asked Friday about the police headquarters scandal and whether he was concerned that criminal charges had never been laid. He did not answer the question directly, but said the public needed a satisfactory explanation, which is why his government will hold a public inquiry.

“How can we ensure Manitobans have confidence when the City of Winnipeg undertakes large-scale public investments like this,” the premier said.