While we await the Rust-D’Eye Report reviewing the procurement process for the expansion, its construction and its current status, CFBB is posting a narrative overview of the City Hall expansion, followed by a series of questions which, we hope, will be answered thoroughly and adequately when the Rust-D’Eye Report is published.
The Report Delay
The report release has now been delayed twice, and the last one had no future delivery date. Council awaits, so does CFBB and the public.
In our opinion, if the lawsuit brought against the City by Inzola Construction had been moving with some degree of alacrity, there might not have been the need for the Rust-D’Eye Report, the cost of which is now reported to have risen from the original contract estimate of $40,000-$60,000 to nearly $180,000! And now, according to the Guardian, the City has retained the services of consultants Paul Emanuelli, well known because of past assignments with the City, and Fay Brook to review and contribute to the Rust-D’Eye Report. What are the projected contract costs for these consultants? And will all these legal and consultant costs including the costs to defend the Inzola lawsuit, be clearly outlined in the 2015 Budget?
Could one of the reasons for the delays be that Rust-D’Eye misjudged the size of the file when he made his contract proposal to the City, and it is taking him much longer to understand and assess the information, particularly now that we understand he has had access to the information contained in the lawsuit?
We further understand that Rust-D’Eye was the Municipal specialist at Weir & Foulds where he was a partner (now retired from the firm). This firm, it has been reported, was one of three called in by the City to help draft the Proposal Call for the expansion, and, therefore, Rust-D’Eye may have had more than a passing interest in the Call. If that is correct, it does not seem prudent that he be retained now by the City to review the Call. The optics are not good.
It would appear to CFBB that an early settlement of the lawsuit would be in everyone’s best interest. To drag it out further is probably not beneficial and while it remains unresolved, it detracts from the business of the new Council with their new vision, and opens up the likelihood that the newly elected representatives will be tarnished by it. If it can be proven that the rumoured indiscretions and inappropriate and unapproved decisions made by staff at senior levels are real, immediate replacement is essential.
It has been evident to experienced eyes right from the get go that the contractor appeared inexperienced on a commercial job like the expansion, given the size of the site, and the process normally followed to achieve permits and approvals. Methodology of excavation on site was convoluted in the extreme, and caused the need to excavate to a greater depth in order to meet the parking requirement. A simple purchase of additional property along Queen which was offered would have solved the problem much more inexpensively. Additionally, the shape and dimension of the site caused ground floor inefficiencies for parking garage access and retail tenant space. In fact, the size of the building required the narrowing of the sidewalks and width of George Street, resulting in a street landscape that will have little ambience and room for pedestrian activity. The City’s own streetscape policies and even some municipal bylaws appear to have been broken.
The awkward bridge design over George Street joining the new with the old City Hall has intruded into the streetscape vista south to Gage Park for all time, a sad sight blockage of one of the only, if not the only views downtown had to an open recreational park oasis.
Much time was lost on the original construction schedule throughout the job, and the contractor blaming an elevator strike in Toronto as the reason for the delay was a real stretch and lacked credibility. Costs mounted for the contractor.
Everyone could see that the delivery date for the project was not going to be met, and most felt that the penalty clause would be activated to give some protection on any cost exposures that had been assumed by the City. At date of writing, we have no idea whether the penalty has been paid.
All the way through Christmas, the “Bar-code Building” as it is now called, was ablaze in light with no work being done and no tenancies. Who was paying this bill?
To our knowledge, we understand that the building is not yet complete and ready for occupancy – it has not reached substantial completion or been certified by the architect as 98% complete, milestones which allow warranties to begin, final contractor invoices to be submitted, and final holdbacks to be determined – and occupancy to begin. And yet, some City departments have already taken occupancy! Outrageous! There are all kinds of legal exposures now. Is the City taking on additional liability? And what about the tenants and their safety?
Dominus No Longer on the Job
Well, surprise, surprise! Dominus, we are told, have left town and have sold their interests to Fengate Capital. Why did this happen? What happened to “our long term partner” that was to revitalize our Downtown with three Phases to include a library, retail and additional office space worth in excess of $500 million dollars? Did Dominus run out of money? Why did staff recommend the sale from Dominus to Fengate during an in-camera meeting? Was this the best recommendation to the City? Why was there no public meeting or Council debate on this very important issue? Now the City is left holding the bag with someone they don’t know! The building to this day is not complete and to our knowledge final inspections have not been approved. We as taxpayers have the right to know!
The lack of transparency throughout has unduly shrouded this project from its very beginning. And the result stands before us for all to see. This City Hall expansion has been a text book example of what not to do when calling for a building in a unique historic downtown environment– one where institutional uses can be used to act as a catalyst for associated and private entrepreneurial development. This building sits as a legacy to incompetence, insensitivity, and lack of a long term vision for the community. What a shame!
1) When can the public reasonably expect to see the Rust-D’Eye Report? How much more will it cost the taxpayer? Will this Report be sufficiently thorough and detailed, or will it require yet another professional consultant to be retained to review the Rust-D’Eye Report?
2) What is the estimated cost to finish the outstanding work to substantial completion, adjudged and certified by the architect as the date when 98% of the work is complete? What will be the final cost of the project compared to the $94 M estimate of Dominus three years ago?
3) Will we finally know how the staff justified using a figure of $242/sq.ft. for building cost when presenting the project to Council on March 28, 2011, when using standard industry norms for area calculations would have arrived at a cost of $600/sq.ft.?
4) In reviewing the time line file with respect to the Phase II land, it would appear that staff represented to Council that Dominus had secured the land as it was their responsibility, when in fact they had only secured an option based on a final cost negotiation, and that the City had to post the option money for Dominus, and made a further investment to purchase the land so that the option money would not be lost? CFBB would like to know what the total cost to taxpayers was for the purchase of the Phase II land.
5) It would appear that, in an attempt to lay off risk exposure to the City, the City agreed to a deal with Dominus which allowed them to generously estimate the cost of the project on which the lease income would be based, at a construction financing rate of 7.2%, almost double what the City could have secured funding for themselves in the marketplace with the strength of their covenant? And, given the current situation, the laying off of risk does not appear to have been the result. Could this be laid at the feet of the original proposal call and insufficient “due diligence” in vetting the winning proponent?
6) Would it not have been necessary to involve public scrutiny and consultation when Dominus indicated last summer that our new “long term partner” would be Fengate Capital, whose credentials are still unknown to this day?
7) Has the $8.2 M dollar annual lease payment to Fengate Capital begun? Did the City begin lease payments even though this project has not been officially declared or certified complete?
8) Is the City not now going to receive the penalty fees negotiated with Dominus for failure to complete the building on time? And what are the lease over-holding costs now charged to the City for an inability to move out of existing premises when those leases expired?
9) We understand that some City departments have occupied certain sections of the building even though the building is not adjudged complete. What liability is the City assuming for internal usage damage which negates warrantees, exposes staff to legislated safety violation and accidents, and will open up the City to Insurance claims?
10) What has been the total cost to date (legal and consultant fees) to defend the $28.5 M dollar Inzola lawsuit against the City of Brampton? Has this been clearly outlined in the 2015 Budget? What is the potential exposure to taxpayers if in fact Inzola wins its legal fight with the City? Will the Insurance Company cover 100% of the costs or will Brampton taxpayers be responsible?
And as a general comment, going back to the original Proposal Call (RFP), a proposal which included an untried concept in Canada called Competitive Dialogue – when over 40 RFP packages were picked up from the City, but only three submissions were received, alarm bells should have been ringing that something was amiss. And what about paying significant sums to Professor James McKellar, the author of the Competitive Dialogue process, to certify that the concept was properly executed? The secrecy that surrounded the process and the conditions that flowed to the City`s advantage should the proposal call abort were unusual and deemed unfair and too one-sided by many developers experienced in RFP contracts.
CFBB – March 12, 2015