Sam Katz testifies at Winnipeg police headquarters inquiry

Former Winnipeg mayor Sam Katz answered questions during the inquiry into construction cost overruns of the Winnipeg police headquarters. Jeff Keele has more.

Former Winnipeg mayor Sam Katz told an inquiry into overrun costs of the Winnipeg Police Services downtown headquarters that he held private meetings urging everyone involved to rein in expenses.

Katz testified Thursday morning that he and other councillors were upset by the cost escalations, believing they had a guaranteed maximum price for the project with contractor Caspian Construction.

The sale and renovation of the former Canada Post building ballooned from $135 million to $214 million.

Katz said in 2013, a meeting took place that included Armik Babakhanians, the owner of Caspian Construction, former city chief financial officer Mike Ruta and others about the cost overruns on the project.

“Mike Ruta spoke to the steering committee, and basically said everything’s under control,” he said.

Katz said in a meeting with all parties, he told them to stop pointing fingers and find a solution as they would not go higher in price.

“They never found a solution,” he said.

In the end, council did approve more money. Katz said they were between a rock and a hard place as the old police station was no longer feasible.

Talks about construction started in 2010 and 2011, Katz testified, noting that repairs for the building would cost between $20 and $30 million. Safety concerns for officers were also noted, with Katz saying they needed a safer place to park.

Katz was also asked about his relationship with Winnipeg’s former chief administrative officer Phil Sheegl.

Katz testified he was an investor in a parcel of land with Sheegl and others in Arizona.

The inquiry heard the property was sold to Babakhanians in 2011, whose company was awarded the police HQ project.

Katz was asked if he now acknowledges that he and Sheegl were in a conflict of interest at the time.

He said he acknowledged that publicly to media in 2018.

In 2022, a civil court judge concluded Sheegl took a $327,000 bribe from Caspian.

Under questioning from the city’s lawyer, Katz was asked if he considered Sheegl a friend.

Katz said they were friends but the two have not communicated for years as Katz said he’s been busy with his three young children.

“We just drifted apart,” said Katz.

Sheegl is scheduled to testify at the inquiry next week.

Katz’s testimony continues Thursday afternoon.

This story will be updated.

-With files from CTV’s Charles Lefebvre and The Canadian Press