City sues construction contractor Caspian, engineering firm over police headquarters

The City of Winnipeg is suingthe constructionand engineering firms that built the city'stroubled police headquarters, alleging myriad mistakesin constructing the downtown project.

The city's statement of claim was filed Wednesday at Manitoba's Court of Queen's Bench.

The city alleges it became aware of a number of defects and deficiencies once the $214-million projectwas complete.

The statement allegesa deteriorated structural slab and dislodgedconcrete is compromisingthe building's structural integrity. Waterleakage, a busted concrete floor, drainage issues,inadequate air flow, insufficientasbestos abatement, a lack oftemperature control and no catwalk on the fifth floorare among the dozens ofshortcomings the city says exists inthefacility,built within the shell of a former Canada Post warehouse on Graham Avenue in downtown Winnipeg.

Winnipegchief administrative officer DougMcNeilestimated the cost of addressing all issues would be"north of $10 million."

"We only took possession a couple of years ago and these things have been popping up since we took possession," he told reporters.

The statement of claim was filed after the city tried to enter into arbitration withconstruction contractor Caspian Projects and engineering firmAdjeleianAllen Rubeli, or AAR, to recoup costs.

The allegations in the statement of claim have not been proven in court.

Legal action necessary

Mayor Brian Bowman said last weekthat AAR decided againstarbitration.

He also said at that point, the city couldn't sue Caspian because it signed a contract that required arbitration.

The cityhas since decided to pursue legal action to bring both firms together.

"Our legal strategy is changing," saidMcNeil, explainingthat provincial case law supports the city's new legal tactics. "We issued a statement of claim today to litigate so we can get everybody in the same room."

Since many of the building flaws cited inthe statement of claim are "interrelated," McNeilsaid it makes sense to pursue legal proceedings with both firms.

"It doesn'tmake sense to have an arbitrator in one situation and a different arbitrator with another."

McNeilsaid some of the minor problemsare already fixed.

Requests for comment from Caspian and AAR were not immediately returned Wednesday afternoon.

Project ballooned in cost

City council approved the purchase and renovation of the building in 2009, witha 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 falseceilings 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.

Theprocurement and construction of the police headquarters has been the subject of two external audits and remains underRCMPinvestigation.

In documents presented to a judge by the RCMP as part of Project Dalton, the 3-year-old criminal investigation into the police headquarters, the Mounties allegedCaspian president Armik Babakhanianspaida secret commission toformer Winnipeg chief administrative officer PhilSheeglfor showing favour to him in the award of a contract to transform theformer 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.