The only build commitment among the Kingsway Entertainment District’s partners relates to initial site preparation and not the actual construction of buildings.
This much has been affirmed by city staff (including two lawyers) and at least 10 of the city’s 13 elected officials.
Ward 5 Coun. Robert Kirwan continues to insist they are all wrong and that there is a written build commitment among partners that legally binds them to complete their respective projects.
During last week’s city council meeting, seven of the city’s elected officials voted in favour of a motion by Ward 3 Coun. Gerry Montpellier resolving that “council hereby directs staff to issue through public media notification that the only current build commitment for the KED is limited to the site preparation.”
The motion, its preamble notes, was intended to clarify matters in response to “one councillor using authoritative overtones (who) continues to claim on social media that such commitment does exist.”
On Monday, the city issued its statement via social media, which read as follows:
"The City of Greater Sudbury notes, consistent with previous public comments by staff and members of City Council, that current commitments for development at the site known as the Kingsway Entertainment District are currently limited to site preparation. Site preparation work includes blasting, grading, intersection improvements, new road construction, sanitary sewer, water, and storm water management. These activities, financed to date by 1916596 Ontario Limited, Gateway Casinos & Entertainment Limited, and the City of Greater Sudbury, are undertaken in contemplation of further site development that will result in a hotel, casino and Event Centre being constructed on the site."
Montpellier’s longstanding concern is that the KED will end up being a “standalone single-pad arena” without the long-advertised hotel and casino accompanying it.
Sudbury.com reached out to the six councillors who voted against the motion. After a few days and two messages, the only councillor who did not respond to our request was Ward 11 Coun. Joscelyn Landry-Altmann.
Ward 6 Coun. René Lapierre, Ward 7 Coun. Mike Jakubo and Ward 8 Coun. Al Sizer all said they agreed that there is no build agreement, but found the motion redundant.
“Clearly there is no build agreement, which has been made perfectly clear many times,” Jakubo said.
“In meetings and correspondence, there is a cost-sharing agreement in place for site development and site preparation, which also has been made perfectly clear on several occasions in open meetings, so why on earth do we need to task staff with again saying the same thing?”
At this point, Jakubo said the motion feels like a “shot against the partners.”
“Everything we have pertaining to the KED and agreements and everything is all on our public website,’ Lapierre said. “If there is no build agreement there, then we don’t have one.”
Sizer said that he’s been thinking about the vote since it took place earlier this week and that he could have just as easily voted in favour of it. He didn’t because he’s tired of the KED being brought up in this manner “ad nauseam.”
Whether the motion passed or otherwise didn’t really matter, he said, especially if “it’s out there and it clears things up.”
Ward 11 Coun. Bill Leduc’s take is that a build agreement “between neighbours” is unheard of.
Gateway Casinos is building a casino on their own land, Genesis Hospitality is building a hotel on their own land and the city is building an arena on their own land.
For him, the cost-sharing agreement that commits all partners to their share of site preparation costs is adequate. This includes a commitment of $5.9 million from the city, $2.2 million from Gateway Casinos, $1.1 million from Genesis Hospitality and $530,000 from the developer.
“If they were not prepared to follow through with the site preparation, then at that point in time things would stop,” he said, adding that Gateway Casinos has done just that and put things on pause.
Between a phone interview and emailed correspondence with Sudbury.com, Kirwan outlined his case.
The foundation to his assertion that all parties are “legally bound to complete their projects” is in Section 15(1) of the cost-sharing agreement, which reads:
"Prior to the commencement of construction of the Early Works, any Party which has determined that it will not be proceeding with its respective Project for any reason, may terminate this Agreement upon not less than thirty (30) days notice in writing, given to each other Party in accordance with Section 19 and specifying the date of termination of this Agreement."
“Since none of them have indicated that they will not be proceeding with their respective projects, they all remain fully committed to moving forward,” Kirwan said. “This is their ‘build commitment’.”
If any of the partners were to back out, he added, “not only would you be on the hook for millions of dollars as your share of the site preparation, you would be putting your company at risk of significant legal liability for misleading the other parties into thinking you were going ahead with your particular project.”
City clerk and solicitor Eric Labelle clarified last month that “the agreement that we have is an agreement that commits the parties to the early works and the site preparation costs.”
An emailed message from city integrity commissioner Robert Swayze noted: “I have inquired of staff as to the status of the KED and I have been advised that the only firm agreement in place is for the contribution to preparing the site from the developer and the Casino with the City also contributing. There is no legal commitment from these parties to build anything.”
The city’s website notes the cost-sharing agreement Kirwan cited is centred “particularly on the common areas/works and blasting. Each partner is responsible for the development of their own site, including buildings and parking lots.”
“I don’t care what anybody says,” Kirwan said. “I will stand in front of a judge and argue in front of a judge with a lawyer who argues the other side and I will win.
“Embedded in that signed site-prep agreement is a clause that says the only way out of this is if you’re not going to go ahead with the project,” he said. “That is your commitment.”
As for the criticism Montpellier lodged against Kirwan earlier this week, when Montpellier said he’s “tongue-tied” Kirwan would disagree with the legal opinion of two lawyers, Kirwan said it’s irrelevant.
“Anybody can have a legal opinion if you’ve got half a brain. The only way to find out if you’ve got the correct legal opinion is to go to court, and nobody’s going to court right now.
“We’ve got so much on the line right now and there are games being played and it’s going to get delayed, but for me to sit back and take all this nonsense from some councillors because I’m not a lawyer – I don’t care if I’m not a lawyer.”
Since the prevailing legal opinion at Tom Davies Square is that there is no build commitment beyond initial site preparation, Kirwan said he plans on introducing a motion once site preparation finally begins that would ask staff to create one.
This would be similar to the motion Ward 4 Coun. Geoff McCausland plans on re-tabling at a future city council meeting.
This commitment would include the city, Kirwan said, which should help put the other partners’ minds at ease, particularly with city council reigniting debate about the project at every pass.
Tyler Clarke covers city hall and political affairs for Sudbury.com.