WINNIPEG – Another messy development deal is unfolding at Winnipeg’s city hall.
“I’m sorry it’s come to this,” said Bob Silver, chairman of the Winnipeg convention centre’s board of directors, who also called the situation “ugly.”
Stuart Olson Dominion Construction was supposed to build a hotel at 220 Carlton St. as part of the RBC Convention Centre expansion.
But the construction company had trouble finding a developer; CentreVenture, the city’s downtown development agency which owns the land, found its own developer, which sources said is Winnipeg Jets owners True North Sports and Entertainment.
That left Stuart Olson facing a $16-million penalty for failing to find the hotel developer, which is considered key to the success of the $180-million convention centre expansion.
Silver appeared before city council’s Executive Policy Committee Wednesday, requesting the city allow Stuart Olson to back out of the hotel deal and instead pay $3.75 million to the city in damages.
Stuart Olson backed out when its partner Matthews Southwest walked away from the deal, Silver said.
Silver said if the city doesn’t allow Stuart Olson to back out, an expensive and drawn-out legal battle will take place between Stuart Olson, the convention centre and the city, which could put further development on hold.
“We need to mitigate this from happening in the future. I think that’s what Winnipeggers expect from this council,” Mayor Brian Bowman said.
Bowman said Tuesday he wants CentreVenture to immediately restart the hotel development project by issuing a request for proposals that would allow any other developer to bid on the project.
Angela Mathieson, CEO of CentreVenture, said they found out in April that Stuart Olson was having a hard time securing a partner for the site.
She pleaded with Bowman and council to not make a decision yet.
“Please give me time to see how we can create something bold for this city,” she said.
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