Police Headquarters and a little more: Where Wab Kinew focuses on the investigation into the Katz-Sheegl era at City Hall

The City of Winnipeg is finally launching a provincial investigation into the purchasing, construction and real estate scandals of the Sam Katz-Phil Sheegl era.

This is not the investigation the city council wanted in 2017, and there is disagreement over what that means.

Seven years ago, during former mayor Brian Bowman’s first term in office, the council voted to ask the provincial government to launch a public inquiry into “any matters” related to the construction of the Winnipeg police station and a series of municipal real estate transactions. It was reviewed in an external review in 2014.

The council also asked the state to review conflict of interest and disclosure requirements for both elected officials and high-ranking public officials, as well as procedures for how those officials may or may not do business with each other and with parties outside City Hall.

The broad scope of the requested investigation reflected the turmoil of the final years of former mayor Sam Katz’s tenure; This mostly coincided with the hiring of his friend Phil Sheegl in the city, initially as the city’s property manager and eventually as chief administrative officer.

Former premiers Brian Pallister and Heather Stefanson rejected the council’s request, initially arguing that an investigation would be imprudent while the RCMP was investigating the police headquarters project, and later stating that it was inappropriate as the city filed a civil lawsuit against Sheegl.

While the police investigation wrapped up without charges in 2019, the civil case concluded in 2022 with a court ruling that Sheegl accepted $327,200 in bribes from police headquarters contractor Armik Babakhanians.

Current Premier Wab Kinew, who is leading an investigation into the NDP’s 2023 election promise, signaled Monday the scope of that investigation — and it’s much narrower than what the council requested in 2017.

Kinew said he anticipates the state investigation will only cover the police station project. Currently, it has been the sole subject of a city-commissioned audit, a partial subject of a real estate inspection, and the focus of an RCMP investigation and civil lawsuit, resulting in the public having access to hundreds of thousands of pieces of information. emails and other documents on the subject.

River Heights-Fort Garry Coun. John Orlikow, who was elected in 2009, said he was disappointed that other city construction projects and real estate transactions that have received far less scrutiny will not be the subject of this review.

“It’s very limited,” Orlikow said Tuesday of the proposed investigation. “I was hoping it would be more fluid and they would go where the evidence pointed.”

Mayor Scott Gillingham remained relatively neutral on the issue. Gillingham said in an interview Tuesday that he was open to a broader state investigation, but noted that was what Kinew promised on the campaign trail.

The mayor also expressed hope that the police station investigation will answer some important questions.

Gillingham said he wanted to know how the project, which began in 2006 as a $19 million bid to replace the crumbling Tyndall stone façade of the former Public Safety Building, became a $214 million acquisition and renovation megaproject less than a decade later.

Paul Thomas, professor emeritus of political studies at the University of Manitoba, said the narrow focus of Kinew’s proposed investigation would be more practical than a broader inquiry.

“The headquarters scandal appeared to be the most egregious, the subject of the most thorough investigation, and as a result the target of the greatest public concern and anger,” Thomas said via email.

“If the goal is to restore public trust and confidence in the integrity and confidence of city government, it would make political sense to focus the investigation solely on this issue,” he added.

“Broad-reaching terms of reference can lead to a protracted, costly process that provides answers (or dead ends) to yesterday’s problems.”

Other potential research topics

So what else does an investigation investigate? Previous city-commissioned inspections and reviews suggested six issues.

One is the city’s fire paramedic station replacement program, which saw the city build four new stations from 2009 to 2012. 2013 inspection carried out by the municipality It concluded that the city uncompetitively bid out $15 million worth of station construction projects.

The second is the 2009 purchase of the former Canada Post Office tower and warehouse on Graham Avenue for $29.25 million. This was the building that was later converted into a police station.

City-commissioned property review conducted by EY in 2014 determined that the city did not conduct an independent assessment of the building and that other properties did not serve as police headquarters.

The third is the Parker land swap, which sees the city swap 24 acres of unserviced land in Fort Garry for 3.6 acres of serviced Fort Rouge land owned by developer Andrew Marquess. The property review concluded that the city rushed the transaction and failed to evaluate the property.

The fourth is the cancellation of the 2012 sale of land in The Forks, known as Parcel Four, to hotel chain Canalta. The real estate review found that the city did not offer the land to other potential buyers and did not notify the city of a $10 million compensation. An appraisal was conducted before the land was offered to the chain for $5.9 million.

The fifth was the sale of the former Canad Inns Stadium site to a partnership of Shindico Realty and Cadillac Fairview in 2012 for $30.25 million. The property review found that the city provided information about the proposed sale to a promoter before that information was made public.

The sixth was the sale of the Winnipeg Square parka for $24.6 million in 2010 to the real estate investment trust that owns Winnipeg Square. It concluded that the real estate audit council was not informed of the property’s $43 million valuation and failed to disclose that broker Shindico Realty represented both the buyer and seller.

Orlikow said he fears it will be too late in 2024 to put all this under the microscope.

“This should have been done years ago,” he said. “It’s too late, but hopefully we can get something out of this.”