A disagreement over a $5-million donation pledge from the ICE District Corporation to Boyle Street Community Services has ended up in court.
Court documents show the two parties disagree over whether the ICE District Corp., a branch of the Katz Group, is required to pay a $5-million conditional donation to Boyle Street Services.
The $5-million pledge was part of the agreement made to buy the old Boyle Street location on 105th Avenue beside Rogers Place.
ICE District sued Boyle Street Service Society on Nov. 24, 2023.
According to a statement of defence filed by Boyle Street Community Services on Dec. 13, 2023, the charity needed to make sure the sale of the old building would cover the cost of a new one.
The purchase deal included “$5 million from the Katz Group for the land, $10 million from EOCF (Edmonton Oilers Community Foundation), along with a commitment from the Katz Group to pay up to a further $5 million depending on the amount of money Boyle Street was able to raise during a capital campaign period. In addition, Katz Group committed to assist Boyle Street in raising funds for the new premises.”
Boyle Street purchased the King Thunderbird Centre — called okimaw peyesew kamik in Cree — in 2021. It’s located at 107A Avenue and 101st Street. Once open, it will serve as an organizational headquarters for the 15 Boyle Street Community Services locations throughout Edmonton. It will also be a service delivery hub for the downtown community.
But the $5-million (or less) “backstop gift” to Boyle Street had conditions.
Both Boyle Street’s statement of defence and ICE District Corp.’s Nov. 24, 2023 statement of claim detail that the money would only be given if the charity couldn’t raise at least $8.5 million for its new location in its capital campaign. Court documents also show the agreement states that the amount would decrease on a dollar-for-dollar basis if Boyle Street was able to raise the funds on its own.
The backstop gift agreement also included that the money be used for capital costs of the new building, that Boyle Street kept ICE District informed of its efforts, and that it vacated the old property by Sept. 30, 2023.
Additionally, there was an agreement that any disputes around the “backstop gift” would be handled through arbitration, court documents show.
In its statement of claim, ICE District Corp. alleges Boyle Street Services breached the backstop gift contract in several ways.
“To the best of the donor’s knowledge, the charity has not utilized its ‘best efforts’ in undertaking and completing the capital campaign,” court documents show. ICE District says Boyle Street didn’t “adequately and appropriately” pursue any and all available funding opportunities — including federal, provincial and municipal grants — in its goal to fundraise $28.5 million in its capital campaign.
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The statement of claim also alleged fundraising efforts were harmed by Boyle Street’s handling of the development process, noting the appeal and double permit applications for the new location.
“Since Oct. 2, 2023, the charity has refused to negotiate the any and all dispute(s) between the donor and charity amicably and in good faith in contravention of the backstop gift agreement,” ICE District’s statement of claim states.
“It would be unjust, unfair, and inequitable for the donor to have to pay the backstop gift at this point in time, or at all.”
In its statement of defence filed Dec. 13, 2023, Boyle Street Services denied the allegations made in the statement of claim, saying the delays on the new location were beyond the charity’s control, and that it used “best efforts” to raise funds for the capital campaign, including hiring professional consultants, focusing on large potential donors, meeting with business leaders, media and public relations efforts and a public campaign.
Boyle Street said the Katz Group would naturally be kept informed since it had two representatives on the capital campaign team, but that they attended “very few” meetings.
Court documents show the capital campaign was able to raise about $7.35 million by Dec. 31, 2022.
“Katz Group wanted Boyle Street to move out and used the backstop gift agreement as leverage,” the organization said in its statement of defence. “Katz Group is now refusing to pay the gifted property, or any portion thereof.”
“Katz Group is now suing Boyle Street, alleging that Boyle Street didn’t try hard enough to raise funds during the capital campaign period, in an attempt to ensure that Katz Group contributes nothing to the development of Boyle Street’s new premises, a project that the Edmonton community has rallied behind and is critically needed to support Edmonton’s vulnerable populations,” the statement of defence continues.
Neither the allegations in the statement of claim nor in the statement of defence have been proven in court.
In a statement to Global News, Jonathan Harline with Boyle Street Community Services said he could not comment because of the ongoing legal process but added both parties have agreed to move the case to a private arbitration process.
“We believe this matter will be resolved in a timely way.
“Boyle Street Community Services continues to move forward with the construction of okimaw peyesew kamik (King Thunderbird Centre) with an anticipated completion date in late 2024. We have and continue to explore multiple funding avenues for this critical project as we owe it to those that we serve to ensure this building becomes a reality,” Harline said.
Tim Shipton, vice president of the Oilers Entertainment Group and spokesperson for the Katz Group, also said the company cannot comment on the details of ongoing legal proceedings.
“We can confirm that both parties are actively involved in an alternate dispute resolution process and expect the matter to be resolved through this process,” he said in a statement to Global News.
“As longtime supporters, partners and funders, we remain supportive of Boyle Street Community Services and their plans to move into the King Thunderbird Centre, which will provide them with a long-term, sustainable facility to deliver their services.”
While the parties involved may influence how the public interprets this dispute, one legal analyst says it simply comes down to what was in the contract.
“You certainly have that David and Goliath bend to it, but at its core, it is a much more simple legal issue of what exactly did these two parties agree to and did someone fail to live up to their respective end of their part of the bargain?” Ari Goldkind said.
“The argument here is a business-to-business argument, whether Mr. Katz is rich or Boyle Street is not wealthy, whether one group engenders public sympathy and the other doesn’t. From an arbitration, or even a courtroom, point of view, you look at: what was the offer? What was accepted? What was the consideration for the deal? What was the quid pro quo? What did each party agree to?
“Was this a $5-million donation with no conditions or was it conditional on a number of things happening that the Katz Group says didn’t happen?”
Goldkind said this likely will be sorted out by lawyers, using lots of paperwork, and will likely be resolved “swiftly” through private arbitration.
“There’s not a lot to be gained by both sides here by airing this out in the public.”
The mayor was hesitant to comment on a legal issue but said Boyle Street Community Services has been “working tirelessly to fundraise” for the new centre.
“I am hopeful they will be successful in securing external funding,” Amarjeet Sohi said on Monday. “At the same time, hopefully resolve the dispute with Katz Group.”
He said issues like houselessness, housing and health services fall under the federal and provincial governments’ responsibilities, not the city’s.
Since September, Boyle Street has been working out of five central Edmonton locations while it awaits the completion of the new King Thunderbird Centre.
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