Winnipeg now plans to sue structural engineering firm over alleged deficiencies at police HQ
Ottawa company declines to agree to arbitration over costs related to troubled downtown project, mayor says
Mayor Brian Bowman says the city now intends to sue an Ottawa structural engineering firm over deficiencies at Winnipeg's police headquarters.
Bowman said Friday the city has been told Adjeleian Allen Rubeli has declined to agree to arbitration over deficiencies at the $214-million project. Procurement and construction of the police HQ has been the subject of two external audits and remains under RCMP investigation.
On Tuesday, Bowman said the city notified construction contractor Caspian Projects and engineering firm AAR it intends to go to arbitration over problems with the downtown facility, which was built within the shell of a former Canada Post warehouse.
The city couldn't sue Caspian because it signed a contract that required arbitration instead, Bowman said.
AAR signed a conventional contract, but the city hoped to package its arbitration with that of Caspian, chief administrative officer Doug McNeil clarified Friday in a statement.
"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.
Bowman said Friday AAR has informed the city it will not participate in arbitration, a move he said gives the city no option other than to commence legal action.
"I've been advised that AAR has indicated that they will not be agreeing to arbitration," Bowman said. "What we've been told is the parties can agree to arbitration in that contract. Failing that, you can expect a statement of claim to be filed."
AAR could not immediately be reached for comment. On Tuesday, principal Peter Chang said he had no comment on the police headquarters, a project he said his firm would like to forget.
The mayor said the city has yet to hear from Caspian Projects. Caspian president Armik Babakhanians could not immediately be reached for comment.
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On Friday, the city disclosed the contract that precluded the city from suing Caspian over deficiencies was constructed by Winnipeg law firm Duboff Edwards Haight & Schacter and signed by former Winnipeg chief administrative officer Phil Sheegl.
Lawyer Paul Edwards did not immediately respond to a request for comment.
Sheegl did not immediately respond to an email request for comment and a person who answered Sheegl's phone said the former CAO would not speak to CBC News.
In documents presented to a judge by the RCMP as part of Project Dalton, the 3½-year-old criminal investigation into the police headquarters, the Mounties alleged Babakhanians paid a secret commission to Sheegl for showing favour to him in the award of a contract to transform the former Canada Post complex into the new home of the Winnipeg Police Service.
No charges have been laid in that investigation and none of the allegations have been proven in court.
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Members of city council, meanwhile, have been invited to a closed-door council seminar next week about the police headquarters.
City council approved the purchase-and-renovation project in 2009 at a budget of $130 million. By the time the project was completed in 2016, it cost taxpayers almost $214 million, not including all financing charges.
Design and construction issues with the project, including holding rooms with false ceilings and vehicle ramps with insufficient headroom, were disclosed by city officials during the construction process. Additional problems, including ventilation issues and leaks, were identified by the city after it took possession of the building.
Winnipeg chief administrative officer Doug McNeil said Tuesday that city property officials have compiled a list of deficiencies, but would not disclose what they are, how much they have cost the city to date and how much they will cost to repair.
Coun. Brian Mayes (St. Vital) said he has been informed the deficiencies exceed $10 million.
Councillors have been invited to a closed-door seminar next week to hear more about the city's cost-recovery efforts.