City plans to sue engineering firm responsible for police HQ after arbitration denied

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This article was published 10/05/2018 (2422 days ago), so information in it may no longer be current.

The City of Winnipeg plans to sue an Ottawa-based engineering firm responsible for design work on the police headquarters, alleging “deficiencies” in the building, Mayor Brian Bowman said Friday.

The move comes after the city tried to begin arbitration this week with construction company Caspian Projects Inc. and consulting firm Adjeleian Allen Rubeli Limited (AAR). On Tuesday, Bowman announced the city had served both companies with arbitration notices.

On Friday, Bowman told reporters AAR denied the request. The city said Caspian has not yet responded and Caspian also did not respond to a request for comment from the Free Press either.

AAR offices were closed Friday and messages were not returned.

The city also revealed Friday it was former chief administrative officer Phil Sheegl who was responsible for signing the Caspian contract in 2011 — information it hesitated to offer three days prior.

The AAR contract was written up by the city’s own legal services department. A City of Winnipeg lawyer initialled the Caspian contract as well, though it was prepared by an outside legal firm, Duboff Edwards Haight & Schachter.

Paul Edwards, a lawyer at the firm, did not respond to requests for comment Friday.

When reached at home Friday, Sheegl declined to comment.

“I’m not interested in talking to you. Have a nice day,” he said.

Transactions surrounding the police headquarters are currently being investigated by RCMP. The city also previously conducted two audits surrounding the building.

Previous reporting by the Free Press found Sheegl was accused of accepting a private $200,000 payment from Caspian when its was bidding on the police headquarters project. Sheegl allegedly shared half the money with then-mayor Sam Katz under the guise of a business loan.

The allegations were laid out in RCMP documents. None of them has been proven in court.

A request to interview current CAO Doug McNeil about the proceedings was denied, but a city spokesperson offered a statement clarifying the city’s legal position on McNeil’s behalf.

The city hoped to resolve issues with the police headquarters through group arbitration with Caspian and AAR, McNeil said. However, it will proceed with a lawsuit against AAR, which was allowed under its 2011 contract. The Caspian contract didn’t include room to sue, that is unless Caspian denied arbitration.

“The primary goal in all of this is to start legal proceedings so that we can try to recover money for deficiencies in the project that were identified by the City of Winnipeg,” McNeil said.

“At the end of the day, regardless of the process used, we are beginning the work to seek compensation for deficiencies on this project. Our primary goal is to ensure we are sufficiently compensated for these deficiencies. There will be information that we are not able to release, simply because we don’t want to risk jeopardizing the legal process. We want to see resolve on this matter just as much as everyone else.”

The city won’t say how much money it is seeking in compensation from the two parties or how much the alleged “deficiencies” will cost to repair.

Coun. Brian Mayes (St. Vital) said he heard the amount was more than $10 million. The city would not confirm this number while the arbitration process is ongoing.

Mayes, himself a lawyer, took issue with the Caspian contract mandating arbitration as first priority.

“It’s not unusual to have arbitration provisions in agreements, I’ve litigated those myself… It’s a huge contract in which to have that provision though, in my view,” he said of the police headquarters, which wound up costing taxpayers more than $210 million.

The city also won’t disclose what alleged “deficiencies” it’s seeking compensation for. Past media reports have listed problems with heating and ventilation systems, leaking pipes, parking, bollards, structural and electrical issues among qualms with the building.

Coun. Ross Eadie (Mynarski) sits on the police board and called the police headquarters debacle “an awful legacy.”

“The city and tax dollars are not private dollars. They’re public dollars. There has to be public accountability,” he said.

Councillors will be offered a private briefing about the police headquarters issues on Wednesday.

jessica.botelho@freepress.mb.ca

Twitter: @_jessbu