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City of Greater Sudbury doesn't explain how KED error made

Municipality said in filing to the Local Planning Appeal Tribunal project's cost has risen by $20 million to $100 million. Officials now say the project was always going to cost $100 million

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The city has not indicated how a mistake was made, but they are clear – costs for the Kingsway Entertainment District have not increased since council approved the project in June 2017.

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In a joint factum the city submitted in March to the Local Planning Appeal Tribunal regarding the KED, city officials indicated costs for the project have increased by about $20 million since the project was approved nearly three years ago.

The city presented the factum to the tribunal with Dario Zulich and Gateway Casinos, asking the LPAT not to grant an extension requested by lawyers for Tom Fortin, who is appealing the KED.

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“The motion to adjourn (the request for an extension), if successful, will have a significant prejudicial impact to the responding parties and the taxpayers in the City of Greater Sudbury. It is not yet known when the application to quash will be heard. This means that the motion to adjourn is not in effect for 90 days, but for an undetermined and unknown amount of time.

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“What is known is that the estimated cost of building the event centre has escalated significantly (from $80 million in 2017 to $100 million today),” the factum indicates. “The prejudice that accrues to the responding parties is great and the cost to the public is already orders of magnitude greater than any costs that arise as a result of holding a tribunal hearing.

“It has now been approximately 22 months since the appeals were filed. In that time period, the estimated cost to the municipality in constructing the event centre has increased from $80 million to $100 million. This amount is publicly funded by the City of Greater Sudbury.”

The city backpedaled a few days later and indicated costs had not actually increased. They attributed the mistake to an error in wording and a misinterpretation of information.

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“It has come to our attention that information included in a document for the KED appeals, submitted by the City of Greater Sudbury to the LPAT, contained an error in wording. The document incorrectly noted an escalation of project costs from $80 million in 2017 to $100 million today,” the city said. “We apologize for this error and are working to have it corrected with the LPAT. We fully understand errors like this can result in a misinterpretation of the facts. As part of our due diligence, we want to publicly clarify for the community.”

Shannon Dowling, a spokesperson for the city, said the project was always estimated at $100 million, which includes $20 million for land, site development and off-site improvements.

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“Including the cost of land, site development and off-site improvements, the project cost remains $100 million. This is what was approved by city council in June 2017,” she said earlier this week. “The consultant’s projection of $80 million — made earlier that year — was for the actual arena/event centre structure and did not include the costs for site development, etc. noted above.”

A $100-million events centre is planned for the KED, along with a $60-million Gateway casino. A large hotel was part of the package at one time; however, no company has come forward to attach their name to the project and it remains a question whether that component of the KED will materialize. The KED is the largest capital project proposed within Greater Sudbury and the largest in Northern Ontario.

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Dowling said the mistake should not hamper the city’s case before the LPAT, even though the city’s clarification seems to invalidate the factum.

“This document was filed only in relation to the appellant’s motion to adjourn the LPAT hearing to a later date, and not the land-use planning matter itself,” she said.

When asked how the mistake was made, considering there are various law firms and several city hall staffers involved in the LPAT appeals, Dowling was evasive.

“The factum contains an error in the wording and has been addressed with LPAT,” is all she would reply.

Tom Price, who works closely with Ward 2 Coun. Michael Vagnini, pointed out in a letter to the editor that four law firms and a project team have been involved with the appeals process.

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“The statement by the city did not clarify anything. There are only two reasons why the information citing a $20-million cost increase would be used in the factum: incompetence or as an attempt to create prejudicial influence,” he argued. “The factum represents the opinion of four law firms for three corporations and a project team for the City of Greater Sudbury, as one of the corporations.

“While errors do happen, it is inconceivable that three multi-million-dollar corporate operations, four law firms and a project team dedicated to the $100 million KED could make an error of this magnitude. If an error were made regarding the $20 million, that information should never have made it through a review process into a formal legal document.”

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Price said the factum, and the resulting mistake, must be addressed by city councillors.

“The claimed cause and magnitude are now being explained as an error. That implies the entire team of four law firms, three corporate operations and the management team are incompetent,” Price suggested. “Alternatively, the $20 million could have been used with intent to inflame taxpayers and prejudice the LPAT into disallowing the application for a 90-day extension. If this was the intent, that could be considered a malicious action.”

Either way, Price argued spending on the KED should stop. The city said recently it has spent about $2.4 million on the project so far.

“Allowing continuing expenditures … on a project for which the fate is very uncertain, using highly questionable tactics, has already meant the city has gambled those tax dollars,” Price said. “Using taxpayers as a high-roller is not part of the municipal mandate for councils.”

mkkeown@postmedia.com

Twitter: @marykkeown

705 674 5271 ext. 505235

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