Sam Katz says it 'would have been smarter' not to make land deal with police HQ contractor

Former Winnipeg mayor Sam Katz says he "probably should not have" engaged in a real estate deal with the owner of Caspian Construction while thatfirm was hired to work onthe city's police headquarters.

In his first direct comments regardinganArizona land transaction involving Caspian owner ArmikBabakhanians, Katz said he had no direct involvement in the transaction but suggested it would have been wise not to have been involved at all.

"In retrospect, I probably should not have allowed the sale to take place," Katz told reporters on Thursday outside Shaw Park. "There's no question about that. That would have been a smarter thing to do, but I wasn't directly involved in the real estate. I was an investor. So, you go with the punches."

In 2012, Katz received a $127,200 cheque from Babakhaniansand gave half the proceeds to then-Winnipeg chief administrative officerPhil Sheegl, Katz's lawyer Robert Tapper confirmed in February.

Sam Katz says it 'would have been smarter' not to make land deal with police HQ contractor

7 years ago

Duration 1:54

Former Winnipeg mayor Sam Katz says he "probably should not have" engaged in a real estate deal with the owner of Caspian Construction while that firm was hired to work on the city's police headquarters.

Tapper provided details of the transaction in an effort to discount an RCMP allegation that Babakhanians paid a $200,000 secret commission to Sheegl. The allegation was made in documents police presented to a judge in June 2016 in order to get permission to search Sheegl and Katz's bank accounts.

No charges havebeen laid in relationto the allegations, which have notbeen proven in court.Katz was not suspected of a criminal offence in any of the documentsobtained by CBC News.

• Former Winnipeg CAO got $200K 'secret commission' for helping contractor, RCMP alleged
• Sam Katz got $127K cheque from HQ contractor he initially denied dealings with
• Arizona land deal involving Sam Katz doesn't make sense:sayreal estate experts

According to a documentprovided by Tapperdated May 1, 2012,Babakhaniansagreed to pay $327,000 Cdnfor a partial interest in a piece of Arizona land.

One ofSheegl'scompanies,WinnixPropertiesCorp., holds the interest in trust for himself and partners such as Sam Katz, according to anemailfrom Tapper earlier this year. Tapper said his clients made the deal verbally with Babakhanians in 2011, but only got around to putting it on paper the following year.

Caspian was awarded the $50,000 first phase of the police headquarters contract on Feb. 10, 2011. That involvedpre-construction services.The firm was awarded the $137-million second phase of the contract on Nov. 18, 2011.

In documents provided to a judge, the RCMP alleged a Sheegl-controlled company received $200,000 from a Babakhanians-controlled company on July 22, 2011.Tapper describedthis as a down payment on the $327,000 deal.

The $200,000 payment to Sheegl came days after city council gave the former top bureaucrat power to award contracts for the police headquarters project. Sheegl then wrote a cheque for $100,000 to Katz marked "loan."

Katz said Thursday he had no business involvement withBabakhanians. The $127,000 he received from the contractor was "basically returning of equity," Katz said.

"Basically [I]had aninvestmentin somepropertywhich was sold and that'sreally the end of that," Katz said. "I was an investor in some property that we soldand I'll just leave it at that for the time being."

Katz made his comments after he and Mayor Brian Bowman unveiled an honorary renaming of Portage Avenue East. It will be calledWinnipeg Goldeyes Way for five years, in honour of Katz's ball club, which has won two straight championships.

In a scrum with reporters, Bowman repeated his desire for provincial government to call an inquiry into several Winnipeg real estate transactions and capital projects completed during Katz's time in office. Those projectsinclude the police headquarters, which remains under RCMP investigation.

Katz said he takes no issue with Bowman's desire for an inquiry.

"The current mayor has to make his decision and council will do what council has to do. I don't have any problem with that," Katz said.

Brian Pallister's Progressive Conservative government has not expressedsupport for an inquiry.