A legal battle ongoing for years in connection with the Winnipeg Police Headquarters building could soon be settled if city council signs off.
On Wednesday, the city’s executive policy committee voted to accept a proposed settlement for fraud and deficiencies lawsuits.
The construction of the building on Graham Avenue started out as a $135-million project but by the time it was complete in 2016, the total price tag came in at $214 million.
The city alleged Caspian Construction, along with dozens of others, including former CAO Phil Sheegl, orchestrated a wide conspiracy to inflate prices and quotes and ultimately drive up the cost of the project. The city claimed Sheegl came up with the bogus land deal in order to cover up a $327,200 payment Caspian Construction owner Armik Babakhanians made to him.
A judge ruled last year that Sheegl accepted the bribe, but Sheegl is appealing the ruling, according to Winnipeg mayor Scott Gillingham. His dealings are separate from the settlement EPC and city council is voting on.
If this settlement is approved by council, the city would receive $21.5 million if the payment is made within 12 months. If the payment is made within 24 months, the city would receive $22.5 million, and if made within 36 months, $23.5 million would go to the city. If it takes any longer than that, the city will receive $28 million.
If council decides not to approve it, the city would need to spend $6.4 million on additional legal costs.
Gillingham says the settlement is a victory for Winnipeg taxpayers.
“It will help the city not only recoup $21.5 million, but it also helps the city of Winnipeg avoid an additional $6.4 million in legal costs and years of legal process,” the mayor said.
-with files from Brittany Greenslade
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