It secures assets to reclaim millions owed from headquarters project settlement
The City of Winnipeg has placed a $28 million mortgage on multiple properties associated with Caspian Construction, the contractor for the Winnipeg Police Service headquarters, to recover settlement funds it is owed as a result of civil litigation against the contractor.
The mortgage, filed in April, secures the city’s claim as it continues to pursue payment from Caspian and its principal, Armik Babakhanians, who were implicated in lawsuits involving allegations of fraud, secret commissions, and construction deficiencies tied to the headquarters project on Graham Avenue.
A year after the city council approved a settlement with Caspian and several affiliated parties, the city quietly placed liens on at least five properties connected to Caspian. This legal action followed missed deadlines for the $21.5 million settlement, a sum that continues to grow with each year of non-payment.
The owed amount will rise to $22.5 million by March 2025, $23.5 million the following year, and $28 million if unpaid by March 2026.
"We have property now that's secured as to ensure we are paid back the monies owed," said Councillor Jeff Browaty, chair of the city's finance committee.
Browaty said that city appraisers are actively evaluating the value of Caspian’s assets.
"If they were to default," Browaty said, "certain properties were guaranteed to the city if they should not pay."
Public records show that the mortgage is linked to five Caspian-associated properties, including:
- 611 Academy Rd. (assessed at $4.8 million)
- 621 Academy Rd. ($3.5 million)
- 2245 McGillivray Blvd. ($1.8 million)
- 2233 McGillivray Blvd. ($5 million)
- 1225 Plessis Rd. ($3.9 million)
City spokesperson David Driedger confirmed these steps but declined to provide further details on other properties that may be included.
"The city continues to take steps to ensure that both the court awarded damages, as well as the terms of settlement approved by council, are completed," Driedger told CBC News.
Winnipeg has also not received payment from former chief administrative officer Phil Sheegl, who was found to have accepted a bribe from Babakhanians during the procurement of the police headquarters project.
Sheegl, who had fought for and won the right to separate his case from Caspian’s, faced allegations of accepting a $327,000 bribe.
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In his March 2022 decision, Manitoba Court of King’s Bench Chief Justice Glenn Joyal said the bribe constituted an “irrebuttable presumption” of influence, leading to financial damage for the city.
Joyal ordered Sheegl to return the bribe, along with his $250,000 severance from the city, court costs, damages, and interest, totaling approximately $1.1 million. However, as of now, Winnipeg has yet to receive any of these funds.
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