The police HQ and little more: Wab Kinew's focus for the inquiry into Katz-Sheegl era at city hall

The City of Winnipeg is finally getting a provincial inquiry into the procurement, construction and real estate scandals of the Sam Katz-Phil Sheegl era.

It's just not the inquiry that city council asked for in 2017 — and opinion is divided as to what that means.

Seven years ago, during former mayor Brian Bowman's first term in office, council voted to ask the provincial government to launch a public inquiry into "any and all matters" related to the construction of Winnipeg's police headquarters and a series of municipal real estate transactions that were examined in a 2014 external review.

Council also asked the province to review conflict-of-interest and disclosure requirements for both elected officials and senior public servants, and also to review procedures governing how those officials may or may not conduct business with each other and parties outside city hall.

The broad scope of the requested inquiry reflected the tumult of the final years of former mayor Sam Katz's decade in office, which mostly coincided with the city's employment of his friend, Phil Sheegl, initially as the city's property director and eventually as chief administrative officer.

Former premiers Brian Pallister and Heather Stefanson rejected council's request, initially asserting an inquiry would be imprudent while the RCMP was investigating the police headquarters project and later stating it was inappropriate while the city engaged in civil litigation against Sheegl.

The police investigation wrapped up in 2019 without charges, while the civil litigation concluded in 2022 with a court ruling that Sheegl accepted a $327,200 bribe from police-HQ contractor Armik Babakhanians.

Current Premier Wab Kinew, who made an inquiry an NDP election promise in 2023, signalled the scope of that inquiry on Monday — and it's much narrower than what council had requested in 2017.

Kinew said he envisions the provincial inquiry will cover only the police headquarters project. It has already been the sole subject of a city-commissioned audit, the partial subject of the real estate review, and was the focus of the RCMP investigation and civil litigation, which together ended up providing the public with access to hundreds of thousands of emails and other documents about the subject.

River Heights-Fort Garry Coun. John Orlikow, who was elected in 2009, said he is disappointed other city construction projects and real estate transactions, which have been subject to far less scrutiny, won't be the subject of that review.

"It's too limited," Orlikow said Tuesday of the proposed inquiry. "I was hoping this would be more fluid and they would go where the evidence led."

Mayor Scott Gillingham was relatively neutral on the subject. Gillingham said Tuesday in an interview he remains open to a broader provincial inquiry but noted this is the one Kinew promised on the campaign trail.

The mayor also expressed hope that a police headquarters inquiry would answer some outstanding questions.

Gillingham said he wants to know how a project that started out as a $19-million proposal to replace the crumbling Tyndall stone facade on the old Public Safety Building in 2006 mushroomed into a $214-million purchase-and-renovation megaproject less than a decade later.

Paul Thomas, professor emeritus of political studies at the University of Manitoba, said the narrow focus of Kinew's proposed inquiry would be more practical than a broader inquiry.

"The headquarters scandal seemed to be the most egregious, has been the subject of the most extensive investigation and consequently has been the target of greatest public concern and anger," Thomas said via email.

"Focusing the inquiry on this topic alone makes sense from a political standpoint, if the aim is to restore public trust and confidence in the integrity and confidence of city government," he added. 

"Wide-ranging terms of reference could lead to a prolonged, costly process which delivers answers (or dead ends) to yesterday's problems."

Other potential inquiry subjects

So what else would an inquiry investigate? Previous city-commissioned audits and reviews suggested six subjects.

One is the city's fire-paramedic station replacement program, which saw the city build four new stations from 2009 to 2012. A 2013 city-commissioned audit concluded the city awarded $15 million worth of station construction projects on a non-competitive basis.

A second is the purchase of the former Canada Post office tower and warehouse on Graham Avenue for $29.25 million in 2009. This was the structure that was later converted into the police headquarters.

The city-commissioned real estate review conducted by EY in 2014 determined the city did not conduct an independent appraisal of the building and did not consider other properties to serve as the site of the police headquarters.

A third is the Parker land swap, which saw the city trade 24 hectares of unserviced land in Fort Garry for 3.6 hectares of serviced Fort Rouge land owned by developer Andrew Marquess. The real estate review concluded the city conducted the transaction in a rushed manner and did not conduct appraisals of the property.

A fourth is the aborted sale of land at The Forks known as Parcel 4 to hotel chain Canalta in 2012. The real estate review found the city did not make the land available to other potential buyers and did not inform council of a $10-million appraisal before the land was offered to the chain for $5.9 million.

A fifth is the sale of the former Canad Inns Stadium site in 2012 for $30.25 million to a partnership between Shindico Realty and Cadillac Fairview. The real estate review found the city provided information about the proposed sale to one proponent before that information was made public.

A sixth was the sale of the Winnipeg Square parkade in 2010 for $24.6 million to the real estate investment trust that owned Winnipeg Square. The real estate audit concluded council was not informed of a $43-million valuation for the property and that broker Shindico Realty did not disclose it represented both buyer and seller.

Orlikow said he fears it's too late, in 2024, to place all this under a spotlight.

"It should have been done years ago," he said. "It is too late, but hopefully we'll get something out of it."