CentreVenture action ‘not cool’: Bowman

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This article was published 22/01/2015 (3945 days ago), so information in it may no longer be current.

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Mayor Brian Bowman put the downtown development agency on notice by condemning its handling of a key property and promising changes to the way it operates.

Bowman said Wednesday it was “not cool” and “unacceptable” that CentreVenture gave an unnamed developer — believed to be True North Sports & Entertainment — an option on the former Carlton Inn site, a piece of land construction company Stuart Olson is already under contract to develop.

“CentreVenture entered into this option in secret on a property that’s tied up with an existing agreement that is still in place right now. This is deeply troubling and I worry it compromises us and exposes us to potential liability,” the mayor said during a break in an executive policy committee meeting.

“This puts us in a very difficult situation,” said Bowman, promising a review of CentreVenture’s mandate and governance. “What may have been acceptable in the past is not acceptable on a go-forward basis.”

Bowman said he was upset by the “double whammy” of CentreVenture offering an option for land already spoken for — and failing to disclose the alternative plan to council.

“I maybe would acknowledge and clearly it was said it was not brought to councillors,” CentreVenture CEO Angela Mathieson told EPC, insisting the new plan is spectacular. “Please give me more time to see how we can create something bold for the city.”

Bowman instead asked Mathieson to present details of the option at a special EPC meeting that may occur as early as Friday. Regardless of the strength of the proposal, the mayor said he will demand a request for proposals be issued for the Carlton land.

Mathieson suggested it’s illogical for EPC to demand details of the plan if a request for proposals will be issued.

“These two things don’t go together, to me,” she said, insisting CentreVenture did nothing wrong by seeking someone other than Stuart Olson to develop 220 Carlton St.

“We own the land,” she said. “We had no obligations other than to ensure that we could make good on this land and keep our corporation solvent, obviously.”

Stuart Olson has a contractual obligation to build a hotel to serve the RBC Convention Centre, which is undergoing a $180-million expansion.

In 2012, CentreVenture used a city line of credit to purchase the Carlton Inn site for $6.6 million. Stuart Olson agreed to build that hotel on the property but failed to find a builder and expressed a desire to be relieved of the hotel-building obligation in April.

Stuart Olson faces a $16-million holdback on its compensation if it does not build the hotel. On Wednesday, EPC considered a plan for the firm to instead pay $3.75 million in liquidated damages, which would be used to draw down the Carlton Inn purchase price.

Convention Centre board chairman Bob Silver told EPC settlement negotiations with Stuart Olson started in July and his board approved the plan last week.

Silver said Stuart Olson has not been released from its obligation to build the hotel and, in fact, was advised to keep trying to do so. Silver conceded no construction contract with Stuart Olson was ever signed and no development agreement stipulated the type of hotel the firm must build.

EPC members demanded to know how the city is supposed to justify giving up a $16-million holdback as well as a commitment to build the hotel, whose rooms and revenue are crucial to the convention centre expansion.

Silver said refusing the settlement may lead to a protracted legal battle, with no guarantee for either a hotel or revenue and potential construction disruptions.

“This is the best way out of a bad situation,” he said, suggesting the city faces two unpleasant options. “I’m giving you bad and worse. Pick one.”

EPC voted to delay a decision until the special meeting expected Friday.

bartley.kives@freepress.mb.ca