Shindico Realty has a word of warning for any company considering doing business with the City of Winnipeg: "Stay away from city projects."
Weeks after the release of a scathing external audit into the construction of four new fire-paramedic stations in Winnipeg, the firm responsible for building those stations is disputing key conclusions of that document and blames city hall "grandstanding" for diminishing the success of the $18.6-million project.
Over the past three years, Shindico built new fire-paramedic stations for the city in River Heights, St. James, Charleswood and Sage Creek. City council ordered a review of the project last fall after former fire-paramedic chief Reid Douglas disclosed Station No. 12 on Taylor Avenue was built on land owned by Shindico and was subject to a swap for three other city properties.
The review, released in October, declared the project was over budget, mismanaged by city officials and plagued by unfair contract awards.
'We've played by the rules all the time and we'll play by the rules again and probably take the heat like we always have'
Shindico development manager Bob Downs is now disputing the audit's assertions, insisting the firm's proposals offered the city the lowest possible price.
"We've played by the rules all the time and we'll play by the rules again and probably take the heat like we always have," Downs said last week in an interview with Free Press reporter Geoff Kirbyson. "Some poorly informed people, because they didn't inform themselves, have axes to grind."
Downs said Shindico managed to shave $13 million from the overall project cost by offering $1 million less than any other bidder to build each of three smaller stations -- in River Heights, Sage Creek and Charleswood -- and saving the city $10 million worth of expropriation costs by suggesting a Portage Avenue cloverleaf as the site for the St. James station, the largest of the four new facilities.
Downs' statement is significant, as it suggests the initial $15.3-million project estimate for the fire-paramedic station replacement program was nowhere near sufficient for building four new structures.
He also repeated previous Shindico assertions the city unfairly reneged on a deal to exchange two old fire halls and a parcel of vacant city property in Fort Rouge for the new Station No. 12 on Taylor.
"We still owned the land, their station was on it and they didn't like it. For some reason, it was our fault," Downs said. "When (the city) takes this land (on Taylor), the tenderloin in the land we had, and doesn't have anything other than cash to give us, we have to take the cash and go buy land to replace the opportunity we lost. It's easier if we just do the exchange."
In other words, Shindico is in the business of developing land, not selling it. Downs has been careful to note this ever since the fire-paramedic station affair began.
As a real estate company, Shindico is supposed to develop land. The firm need not make any apology for doing so, nor should Downs have to insist his company played by the rules.
The Ernst & Young audit doesn't lay blame at the feet of Shindico. Rather, it very clearly excoriates city officials, most notably former chief administrative officer Phil Sheegl.
The worst thing the audit claims about Shindico is the firm wound up benefiting from contracts "awarded on a non-competitive basis." Again, the responsibility for this lies with the city.
The question, which remains unanswered, is why Shindico bothered bidding on the work in the first place. The firm is Manitoba's largest real estate developer, with nearly $1 billion in projects in the pipeline, Downs said. Shindico hardly needed what was originally $15.3 million worth of city construction projects.
He said Shindico president Sandy Shindleman told him he wished the firm hadn't been picked for the job. But once it started doing the work, it was committed to finishing it.
"We produced four really nice stations. All four are our design," Downs said. "Why are we taking all the heat?"
That's an excellent question. It was the city that started out looking for private partners on the fire-paramedic station project, which was initially conceived as a public-private partnership, or P3.
It was Mayor Sam Katz who heralded P3s as the solution to the city's infrastructure-renewal woes.
Did Katz ask Shindleman, his former business partner in the Winnipeg Goldeyes, to get involved? If so, the mayor probably owes his former partner an apology.