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The Winnipeg fire hall scandal dissected



How did a good-news story about the timely and well-executed replacement of four outdated fire stations degenerate into a sleazy tale of conspiracy and coverup involving politicians and public servants?

How did the fire department, the goodest of the good guys, get entangled in a plot to deceive Winnipeg's elected city council over who was being paid millions of dollars to build the new firehalls?

Look at the big picture, and the story doesn't look so sinister. Look closer, and here's what you see...

It starts in 2009 with the fire department, now carrying the clunky name of the Winnipeg Fire and Paramedic Service, convincing city officials that it was long past time to bring the city's firefighting infrastructure into the 21st century.

Scattered fire stations were too old, too small and too poorly positioned to answer calls quick enough in the sprawling city.

The timing wasn't great. The economy had just tanked. But the project had to be done. The City decided to explore the possibility of using a 3P approach---a public-private project.

In the spring of 2009 the city issued an RFQ --a request for qualifications -- to developers to narrow down the pool of those who were interested and able to do the job. Prospects were asked if they could design, build, finance and maintain four new fire-and-paramedic stations in Charleswood, St. James, River Heights and Sage Creek.
It was, according to Reid Douglas, the Fire Chief, and city property director Barry Thorgrimson, at this point that the idea of a 'land swap' originated.

The 'land swap' lies at the heart of the current controversy.
The fire department, through Reid Douglas, then the deputy chief, made a verbal agreement to swap three parcels of land for the one on which the new River Heights station was going to be built. Two of the three lots would be firehalls being abandoned when new ones were built, and the third was riverbank property on Mulvey Avenue. Nobody knew about the proposed land swap until last week -- or of the penalty the city will have to pay if the swap is rejected.
The declaration of the origination of the land swap is found in a story in the Winnipeg Free Press. It's important to note that it's a paraphrase, not a direct quote.

They may have said a lot more that wasn't reported. They may have been quoted out of context. But if the statement attributed to them is accurate, it's like saying that this was the moment Eve saw the snake in the Garden. And we know how that story turned out.

There's something that gives the land swap claim credence. Around the same time, in July, 2009 to be exact, city hall was in an uproar over a land swap involving developer Andrew Marquess.

In a closed door meeting of Winnipeg's property and development committee, a motion was introduced --  with no notice -- to swap nine acres of land owned by Marquess along the Fort Rouge railway yards for 25 hectares of city land in the Parker neighbourhood, described by the Free Press as a vacant triangle east of Waverly Street, hemmed in by rail lines. The value of both sections was set at a million dollars.

Marquess said he planned to build 3500 townhouses on the Parker land. Adding spice to the controversy was the possibility that the second stage of the bus rapid transit corridor would pass right by that very stretch of land.

A prominent supporter of the Marquess swap was Phil Sheegl, then deputy chief administrative officer, who said the townhouse development would eventually bring the city $7 million in property taxes.

Sheegl, now, as CAO, defends the land swap negotiated by Reid Douglas. It's going to be interesting to see if Sheegl had any role in the 2009 negotiations involving Douglas. Douglas, in 2009, learned a valuable lesson for someone in his position---land swap, good; informing the public, bad.

But, back to the story...

Douglas and Thorgrimson said that nine firms responded to the RFQ and the city accepted the qualifications of seven. (In 2010 he told Canstar News six were prequalified, but why quibble.)

In January, 2010, the fire department issued an 11-page report detailing the need for new fire stations. The report made its way through the various city committees until it got the official approval of council Feb. 8. (Note: Protection Committee accepted the report, with the recommendations of the public service to proceed, as 'information' on that date, and the matter did not have to be formally referred to council for another vote in order for the plan to go forward).

The group of prequalified developers was sent an RFP---request for proposal---which, reports the FP, included the requirement that "the successful bidder must propose sites for the relocations."

The deadline for response was April, 2010. But then it was extended to May 26. It's now obvious why.

The national economy was still struggling. In its 2009 budget, the federal government put together a stimulus package, which included $2 billion in low-cost loans to municipalities for infrastructure like housing and, wouldn't you know it, fire halls.

It was too good to pass up. The city dumped the idea of private-public partnerships building new fire stations and went Old School---a $9.7 million, 15-year loan from the federal government at giveaway interest. The expectation for the RFP had changed.

And so did the interest. Of the companies asked to bid, only one responded---Shindico Realty.
"...and thus won the bid to build the new fire halls," Thorgrimson said.

Well, that's their story and they're sticking to it.
In July, 2010, city council approved taking the CMHR loan for the new fire halls. Gord Steeves, who was chairman of the protection committee responsible for the fire department at the time, said he never heard a thing about Shindico winning the fire station contract.

The Winnipeg Free Press reported at the time:

"Construction on the first of the four new fire-paramedic stations is slated to begin this fall, when Station 27 will rise on a parcel of Sage Creek Boulevard land the city is purchasing from developer Qualico."
"The other new stations will be built on city-owned land."

July was followed by August which was followed by the 2010 civic election campaign.

Sandy Shindleman, who owns Shindico with his brother Robert, was a generous donor to council candidates.

He backed six winners (Paula Havixbeck in Charleswood-Tuxedo, Thomas Steen in Elmwood-East Kildonan, Devi Sharma in Old Kildonan, Grant Nordman in St. Charles, Justin Swandel in St. Norbert, and Gord Steeves in St. Vital) and two also-rans (Ian Rabb in Fort Rouge and Michael Kowalson in River Heights).

It was 2011 when an odd notice appeared on the website of Journal of Commerce, described as Western Canada's Construction Newspaper since 1911.
Dated Feb. 23, 2011, it announced the award of a contract for a fire station in Winnipeg in Sage Creek.

Bid Results Shindico Inc, 200-1355 Taylor Ave, Winnipeg MB R3M 3Y9, Phone: 204-474-2000, Fax: 204-284-7115 $3,000,000
Nova-Con Projects Ltd, 200-260 St Mary Ave, Winnipeg MB R3C 0M6, Phone: 204-897-2223, Fax: 204-927-1849 $3,838,694
Gateway Const & Eng Ltd, 434 Archibald St, Winnipeg MB R2J 0X5, Phone: 204-233-8550, Fax: 204-231-0711 $3,873,246


If Shindico won the contract for four fire stations by virtue of being the only respondent to the RFP, why was it competing against two other companies for the Sage Creek fire hall?

The year 2011 was the year of construction, for the CMHC loan stipulated that the fire halls had to be finished by March 31, 2012.

There was plenty of coverage in the daily and weekly newspapers and then Deputy Fire Chief Reid Douglas was often quoted. He told the press in March, 2011, that they were still looking a two or three sites for the River Heights station. At the end of the month he refused comment on locations because of "ongoing negotiations."

It will be interesting to see if the paperwork on those negotiations is released to city councillors.

Because 2011 was also the year of coverup.
And that coverup is what makes this story so sinister.

Nowhere all year was Shindico's name attached to the project, even though it appears authorities had started negotiating with the company on a land swap as far back as 2009.


The fire station replacement project was divided into four smaller projects, one for each station, so that the cost of each was under the amount that had to be approved by city council. Something smells fishy.

Contracts were kept hidden in a drawer until forced out by press requests in 2012. Why the secrecy?

Douglas deliberately ignored council's instructions to bring the name of the contract winner to them for approval before starting work. This is outright subordination.

The battle lines have been drawn. City bureaucrats, including CAO Phil Sheegl, made in perfectly clear in their joint news conference last Friday that they run the city, not the elected councillors.
-  They have the right to use loopholes to disregard instructions from council, they said.
-  They can sign secret contracts.
-  They can approve city buildings to be built on private land if they want to.
-  They can hide their verbal deals until projects are completed, then present them to council as faits accompli, complete with penalties if councillors try to back out.

We'll see, maybe as soon as this week, if council has any backbone or if councillors will roll over and be doormats for city employees.

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