PavCo loses another director

Will the last person left please turn out the floodlights?

Another director has left the board of B.C. Pavilion Corporation, the taxpayer-owned company that operates B.C. Place Stadium and the Vancouver Convention Centre.

Peter Brown's February departure wasn't confirmed until March. The Howe Street tycoon, Order of B.C. recipient and Liberal bagman (right) claimed he wants to slow down, but the real reason was his disgust over Premier Christy Clark turning down the $35 million to $40 million B.C. Place Stadium naming rights deal with Telus.

Now joining Brown on the outside-looking-in is Derek Brindle. Brindle (below) is a lawyer with the Vancouver firm Singleton Urquhart, has a Queen's Counsel designation, and his bio states he "acts as an arbitrator and in mediations involving construction and insurance disputes. Derek advises Crown institutions and industry on risk mitigation strategies in major procurement."

UPDATE: 8:33 p.m. April 12

PavCo chairman David Podmore has emailed me this statement:

"Derek left the board in February 2012.

"He joined the Board at my invitation in 2007 to be available to provide construction legal expertise as PavCo proceeded through completion of the VCC West expansion and the BC Place Refurbishment.

"With completion of both major construction efforts PavCo is moving to a focus on business development to ensure that the business potential of these assets (VCC West, VCC East, and BC Place) are maximized, consequentially the business focus will gradually shift away from construction and more emphasis will be placed in sales and marketing as well as operations.

"Derek's advice and expertise has been most helpful through the past years where the focus has been on completion of the new facilities and the BC Place upgrade.

"Derek has been exceptionally helpful through these stages, and has resigned to allow PavCo to move to the next stage where the focus must be on business development to maximize utilization of these exceptional assets which he helped deliver, and recruit the Directors that will have the appropriate expertise to provide the guidance and advice to maximize the utilization of the exceptional facilities created during Derek' s participation on the PavCo Board."

UPDATE: 10 a.m. April 13

Brindle responded to my phone message via email:

"I resigned in February after nearly 5 years on the Board.

"I initially joined at the Chair's invitation as someone with experience and interest in construction. My preferred area of practice was, and is, in construction law. It was not my intention to overstay the construction projects to be undertaken.

"After the completion of the final construction project near the end of 2011, it was timely to move off the Board to allow for an orderly transition and focus on marketing and operations.

"Any further questions can be directed to Pavco."

UPDATE: 12:41 p.m. April 13

Here is the response when I asked if Brindle might have a few minutes to answer questions about whether his departure from the board was affected by the government-nixed Telus naming rights deal and the lawsuit by two roof contractors:

"Thank you, however, I have nothing further to add to my earlier e-mail response to your questions."

Questions persist, I say. Why no public announcement of Brown and Brindle's departures? Can one call it an "orderly transition" when there is no immediate replacement for directors who leave before the May 27 end-of-term? Why do taxpayers have to wait until a reporter gets a tip?

PavCo, coincidentally, is one of the parties named in a $6.5 million lawsuit filed by steel cable installer Freyssinet. Steel contractor Canam Group filed a $26.15 million countersuit against Freyssinet. The messy dispute, which may ultimately tell the story of this difficult renovation, could be settled in a marathon court trial to begin in October 2013.

We still have no update on the cost of the B.C. Place renovations, which were budgeted at $563 million. The government is not likely to tell us the truth while it's contesting by-elections in Port Moody and Chilliwack, for fear of losing two seats in the Legislature.

Cue the circus music

The long, strange saga of the Telus Park naming rights deal for B.C. Place Stadium won’t end.

How did it start?

We know that the stadium wasn't finished in time for the Sept. 30, 2011 reopening, but the show went on anyway.

Telus crews, under the guise of the top secret "Project Frog," were in and out of the construction site throughout the summer to install the wi-fi and mobile phone antennas and video screens, but often had to hurry up and wait. B.C. Pavilion Corporation and PCL Constructors Westcoast had other priorities. The application of the fabric roof was way behind schedule, delayed from February to July because the Quebec steel contractor Canam and French cable installer Freyssinet couldn't get along and cables and machines were failing or breaking.



The reopening came and went. So did the marquee event, the 99th Grey Cup. The name remained B.C. Place Stadium. Telus had incurred extra costs and the value of the naming rights had diminished. It reasonably wanted a better deal than the one originally agreed.

Meanwhile, the B.C. Liberal Party ended 2011 with its "Risky Dix" attack ad campaign and began 2012 by soliciting various frequent donors to build a war chest for the Port Moody and Chilliwack by-elections. Telus, which gave $352,407.35 since 2005, declined.

The Liberals were miffed after awarding Telus the $1 billion, 10-year omnibus telecommunications contract in summer 2011 in controversial fashion.

The Liberals were hammered by Telus competitors, chiefly Bell, Rogers and Shaw, who accused the government of violating trade agreements and government procurement rules. The tendering process for nine different contracts lasted more than two years before the government's sudden, surprise bundling of the entire business into one deal, for one company.

Despite the party's ties to Telus, Premier Christy Clark has telecommunications connections of her own.

Not only is Clark a good friend of Bell-sponsored, Vancouver Whitecaps' owner Greg Kerfoot, but she was formerly employed as a CKNW radio talkshow host by Corus Entertainment, a company controlled by Shaw Communications.

In fact, Clark met on Jan. 30 in the Premier's Vancouver Office at the World Trade Centre in Canada Place with Shaw CEO Brad Shaw.

Shaw Communications is contesting Telus’s application to trademark Optik TV. Shaw also owns Global TV, which boasts the best-rated local TV newscast in Canada on Global BC.

As if to make matters worse, Telus is suing the B.C. government. Deputy Minister of Finance Peter Milburn denied Telus's appeal for a Social Service Tax refund on Feb. 7, according to the March 9-filed B.C. Supreme Court documents below. Telus claimed it errantly paid or self-assessed $306,311.61 in taxes after the 2004 purchase of servers, operating software and maintenance from IBM, Lucent and Sun Microsystems. At least $96,580.40 was not refunded and remains in dispute.

Telus sues B.C. government for a tax refund

While Clark has been noticeably quiet during a week-long break from the Legislature (after mis-handling the mess and message the previous week), some Liberal MLAs have used their time off to arrange photo opportunities with community newspapers to dole funds from a $30 million pot Clark announced at the Union of B.C. Municipalities convention on Sept. 30, 2011 in Vancouver.

MLAs Randy Hawes and Marc Dalton went to Mission to announce $185,000 for dehumidifiers at the Mission Leisure Centre’s three rinks. Hawes and Dalton told Abbotsford Times reporter Christina Toth that the money was left over from the stadium’s renovation!

MLAs Randy Hawes (Abbotsford Mission) and Marc Dalton (Maple Ridge Mission) met with the district's mayor Ted Adlem and Coun. Nelson Tilbury at the leisure centre to hand over the cheque.

The largesse comes from monies left over from the $563-million renovation of the B.C. Place roof. When the project came in $30 million below the last estimated cost, Victoria decided to disperse those dollars to recreation projects around B.C., explained Hawes.

"We just got the information on the weekend," he said.

Preposterous! Minister responsible for B.C. Place Pat Bell told me in a Jan. 30 interview: “We’re probably three or four months away from being able to roll out the final numbers.”

"For them to claim this is surplus money from a project millions of dollars over budget is a real stretch," NDP critic Spencer Chandra Herbert told me. "There is no surplus because they have no financing plan to pay for the project."

UPDATE, 5 p.m., March 22: Hawes claims "we are under the final budget for the stadium refit" (though he didn't mention any numbers). But he goes on to say:

"I either misspoke or was misunderstood. The recreation funding of $30 million for more rural communities is not from the under budget amount from BC Place. That was capital funding and from an accounting perspective, this funding must be from operating funds. I have looked at this funding as a way to allow some communities that might not benefit from the stadium remake to feel they have some benefit. I do feel a bit foolish having tied the funding directly to the under budget amount on the stadium. Incidentally, while the total recreation grant funding is $30 million, that does not mean the stadium savings was $30 million. Mea culpa."

UPDATE, 7 p.m., March 22: I asked Hawes for proof that the B.C. Place project was under budget. Not surprisingly, he has none.

"I don't know what the numbers are but Pat Bell has said numerous times that we are under budget. I believe the final numbers are still to come in."

Work continues at the stadium. A new fence is being erected outside the west side service entrance. The level 1 media entry is under renovation (and wasn’t complete for the Whitecaps’ home opener).

This is the same stadium that is now faced with a $35 million to $40 million shortfall because of the nixed Telus naming rights deal. The same stadium where an operating deficit of $49 million has been forecast for 2012-13 to 2014-15, according to the latest Service Plan.

The same stadium where grease leaks from the support cables have damaged the roof and could cost $10 million to repair.

The same stadium that will be the subject of an 85-day B.C. Supreme Court trial expected to begin in October 2013 between Canam and Freyssinet. Canam is suing for $26.15 million, Freyssinet wants $6.5 million. B.C. Pavilion Corporation is a defendant in the Freyssinet lawsuit.

Here's my modest proposal: move the B.C. Liberal caucus and its staff under the expensive big top at B.C. Place. They are clowns, who are running this province like it’s a circus.

Cue the circus music.

B.C. Place's multimillion-dollar legal fiasco

A very messy legal battle is unfolding over the controversial $563 million renovation of B.C. Place Stadium, home of the Grey Cup champion B.C. Lions and the Major League Soccer chump Whitecaps.

Quebec-based steel supplier Canam Group slapped French cable specialist Freyssinet with a $26.15 million countersuit on Nov. 18. Read all about it here.

Canam's Structal division was responsible for the steel masts. It hired Freyssinet to supply and install the cables for the new retractable roof. Quite simply, the two companies couldn't get along. Now they're pointing fingers at the other, alleging bad management and shoddy workmanship.

This lawsuit has been festering since April, when Canam informed shareholders of a major cost overrun. B.C. Pavilion Corporation claimed it wouldn't cost taxpayers more, because the contract was fixed-price. This is what I reported then.

This is what I reported in August, as the reopening of the stadium rapidly approached and construction was going around the clock.

If you followed any of the roof leaks and box office and food and beverage service troubles during the reopening, the root cause of the rocky reopening was the Canam/Freyssinet conflict.

Had erection of the steel masts and attachment of the cables gone smoothly and according to schedule, the roof would have been fully installed by the start of summer and game day staff would have had several weeks of training inside the building before the Sept. 30 reopening. Workers could have leisurely done their best to make the new roof leak-proof, while days were long, sunny and dry.

Read the key court filings below.

Though unproven and untested in court, these filings lead to more questions than answers about the risky renovation.

What did PavCo and general contractor PCL know about the dispute?

When did they know the two important subcontractors were encountering major difficulties?

Why did taxpayers have to wait until lawsuits were filed to learn about these problems?

How much will the stadium ultimately cost taxpayers?

B.C. Place renovation lawsuit: Freyssinet Statement of Claim

B.C. Place renovation lawsuit: Canam Response

B.C. Place renovation lawsuit: Canam Counterclaim

B.C. Place renovation lawsuit: PavCo Response

More roof problems at B.C. Place

More trouble for B.C. Place Stadium, where the Sept. 30 reopening was anything but smooth.

The French headquartered cable erection company hired by a Quebec steel subcontractor is suing for almost $6.5 million. B.C. Pavilion Corporation, the taxpayer-owned stadium’s operator, is named as a defendant.

Freyssinet filed a lawsuit in British Columbia Supreme Court on Oct. 31, charging Canam with breach of contract, breach of statutory trust and equitable fraud. Problems have been festering for many months. Here's my update from Aug. 4.

PCL Constructors and Canam Group were awarded a $122,864,581 contract on Nov. 18, 2009, according to the Freyssinet court filings. Canam hired Freyssinet as a subcontractor for $30,124,377, “but were unable to agree on all terms.”

"Nevertheless, Freyssinet commenced work on the improvement in July 2010 and on Aug. 23, 2010, Canam and Freyssinet signed a subcontract, backdated to Nov. 20, 2009," said the lawsuit. "However the subcontract was signed without Canam and Freyssinet agreeing on the cost of the erection work budget."

Freyssinet claims Canam failed to keep work on schedule, directed labour and equipment without Freyssinet’s knowledge or consent, interfered with Freyssinet foremen and “permitted rates from Montacier International, a company related to Canam, for labour for erection of the cable which were higher than agreed upon.”

Canam announced in November 2010 that it would “follow an alternate method of erection of the cable, without consulting with Freyssinet and without Freyssinet’s consent.”

"Through 2010, payments were made by Canam on account of the invoices, but Canam then wrongfully ceased making payment to Freyssinet."

Freyssinet says it is owed $6,466,892 by Canam, which claims Freyssinet owes it $24,137.756.44.

A Sept. 29, 2011 letter by Canam alleged: "Due to Freyssinet's negligence in preparation of the cost budget and the construction methodology, there was a significant cost overrun which Canam was required to bear in the fixed price contract with PCL."

"Canam intentionally and wrongfully made the demand to recover alleged damages for financial losses arising from the completed work. This was a wrongful, tortious act constituting equitable fraud."

As of Oct. 19, certificates of completion had not been issued for the head contract. The stadium reopened Sept. 30.

The Freyssinet claims have not been tested in court. I am waiting for responses from Canam and PavCo.