New police HQ project will cost city another $7M this year

The City of Winnipeg will spend millionsin 2017 on costs associated withits newpolice headquarters project,even though construction wound up last year.

Interest charges on the construction component of the project, losses on the mostly vacantGraham Avenue towerattached to the building and the cost of maintaining the city's vacant former police headquarters add up tonearly $7million this year, according to city spokespeople.

Interest charges to service the debt incurred by the projectare$6.2 million in 2017, communications manager David Driedger said in a statement.

Losses on the mostly vacant10-storeyoffice tower, which was purchased along witha warehouse fromCanada Post, arebudgeted at $330,000 this year, communications officer Alissa Clark said.

As well, it will cost the city $450,000 to operate the vacant Public Safety Building on Princess Street, Clark added. Police completed the moveout of the PSB and into their new home in June 2016.

These ongoing charges come on top of the $214-million capital cost associated with the purchase of the former CanadaPost complex and its renovation into new police headquarters, including almost $2 million worth of protectivebollardsthat have yet to be installed around the downtown structure.

• Public Safety Building to remain intact and closed to public for at least another year
• Permanent protection for police HQ remains 2 years away

'It's absolutely horrifying'

"I think it's absolutely horrifying," said South Winnipeg-St. Norbert Coun. Janice Lukes, who questioned how city council could have approved the police headquarters project in 2009.

At the time, council was told thepurchase and renovation of the former Canada Post complex would cost the city $135 million. Cost overruns to date total$79 million, not including interest or operating losses.

"I wasn'there when the previous decisions were made, but I have to wonder where the financial analysis was and who approved it and how could council approve something like this," Lukesasked.

"Did they havethe whole picture? And if they had the whole picture, how could theyhave made that kind of decision?"

The original police-headquarters plan called for the city to sell the Graham Avenue tower for $18 million and also dispose of the Public Safety Building.

A shortage of tenantsand the need to spend$20 million on renovations, however,devalued the former Canada Post tower so much, the city considered demolishing the building. In November, council approved a plan to allow Shelter Canadian Properties to redevelop the building.

That plan remains in its due-diligence phase.

The city also intends to demolish the Public Safety Building. But first, the city is soliciting public opinion about redevelopment options, which are constrained by a 142-year-old caveat that demands the land below the structure have some form of public use.

• ANALYSIS:Marketing for the future, burying the recent past

"We're doing the best we can to relieve the drain on our accounts," said council property chair John Orlikow (River Heights-Fort Garry). "We were told this project would bea no-brainer."

The police headquarters project was the subject of an audit completed in July 2014 and has been under RCMP investigation since December of that year.

• Former Winnipeg CAO got $200K'secret commission' for helping contractor,RCMPalleged
• RCMPinvestigate offer of secret commission to Winnipeg police HQ project director
• PhilSheegl'slawyer calls claim his client was 'in on it' false, stupid and ill-informed

The latest round of RCMP allegations about the project led Winnipeg Mayor Brian Bowman to announce last week he intends to ask the Pallister government to launch a public inquiry.