Status of Nanaimo vs Millennium – Judge’s Arbitration Ruling
Ron Bolin: Dec. 1, 2010
The judges decision in the case of the City of Nanaimo vs. Millennium Nanaimo Properties Ltd. and Suro Development Corporation is in. Millennium’s right to go to arbitration is upheld. This means several things for Nanaimo’s citizens: 1) higher legal costs in this matter; 2) that arguments will take place behind closed doors and the public will be kept in the dark; and 3) that the need for Council and Staff to advise citizens on whether Millennium actually has any skin in the game is now imperative. If, as many have held, neither ever had any risk in their agreements with the City, then certainly we should not throw good money after bad. And I must apologize for my stance that the City would not proceed to any costly action if there were no assets to be attached.
Indeed, as citizens we need to determine whether those that are paid to look after our interests on Council and those who have been paid very well to look out for us on Staff have been derelict in their fiduciary responsibilities. We need to question our representatives and civil servants as to whether in entering this case in the first place it was known that we could not win, and more to the immediate point, whether it is worth continuing in a process that we may know to be both costly and without point.
Ron Bolin, Oct. 26, 2010
For those who wonder where this case went, the following information was promptly provided by Mr. Al Kenning, Nanaimo’s City Manager, in response to my request.
Please note that my reference to shadows was aimed at the court process which keeps “outsiders” to a case on a very short leash, and perhaps with good reason. Upon my request, Mr. Kenning acted promptly. It is to be hoped that, as the citizens of Nanaimo are, de facto if not de jure, party to this matter that future court appearance dates may be made public.
____________________________________
Hi Ron,
I can advise that Millennium Nanaimo Properties Ltd. have applied to the court to “stay” the City’s action to force this dispute to arbitration. Under the Partnering Agreement there are arbitration provisions however the City is of the opinion that arbitration is not applicable to this dispute.
Please note that the latest information I have is that this issue is scheduled to be heard on Thursday October 28 at 10:00 am in Nanaimo.
Al
_____________________________________
From: Ron Bolin [mailto:rlbolin@telus.net]
Sent: October 26, 2010 11:41 AM
To: Al Kenning
Cc: Mayor&Council; Derek Spalding; Toby Gorman
Subject: Court Appearance
Good morning Al:
I stopped by the courthouse some days ago to see about getting a copy of Millennium’s statement of defense/reply. I was told that none had been filed and I didn’t want to pay another $8 just to look at the file again, though I did notice new material. I was told however that the matter was to be in court at 10am yesterday. I dutifully showed up but couldn’t find file 60133 on the daily schedule. On asking at the Supreme Court wicket I was informed that the case had been adjourned last Friday.
On trying to find out when the matter would reappear, I was told that, since I was not a party to the case, the best I could do would be to get up early to look at the daily schedules until I found it listed. You will appreciate my frustration that a case of this significance for the citizens of Nanaimo, i.e. about 4 percentage points on our upcoming property taxes, was so hidden in the shadows from the public, shades of Jarndyce vs Jarndyce.
I would appreciate it if you could let me know when the case will next appear in court. The citizens of Nanaimo are a party to this matter.
Thanks,
Ron Bolin
Posts and Comments on Nanaimo Governance 
Today was the day and I took myself to rm 232 of the courthouse to hear the case of The City of Nanaimo vs. Millennium Nanaimo Properties Ltd. and Suro Development Company. I had never before sat through a court proceeding and it was interesting to see how the tailors of our society cut and measure the cloth which holds us together. I was joined in the audience by Derek Spalding of the Daily News who I note within hours had a report of the proceedings on line at:
http://www2.canada.com/nanaimodailynews/news/story.html?id=c72ab1ae-ca4a-418d-a392-f89d937c3e3e
and Mr. Kenning, our City Manager.
The process took about one and a half hours and involved technical legal arguments which I cannot presume to relate. I have nothing to add at this time to Derek’s story. It was good to see a professional journalist covering the story. As Derek mentioned, the judges decision will be provided in writing in a few weeks. Watch for it.
In a related matter, I note that on Monday in a motion which passed so quickly that I missed it when watching Council of tv, a sum of up to $19,000 was approved to update the PKF Hotel Market Feasibility Study which was done for Triarc International back when this whole story began over six years ago. While I deplore sending good money after bad, it would be a mercy if the study were to show that, for the foreseeable future and in the absence of considerable public money, the chances of getting a full size, full service hotel, is pipe dream which should be abandoned for a determination of what developments need to take place in the city in order to eventually make such a hotel economically feasible in the private market and to undertake an examination of how the conference centre facility which we currently have could be better utilized.
The original PKF Study can be seen here:
Click to access pkf-marketfeasibility_hotel.pdf
The Grant Thornton Study of Conference Centre Market Feasibility is here:
Click to access conf-centre-market-feasibility-by-grant-thornton.pdf
Read them and note the many caveats which these documents contained.
from the straight goods..
Friday, November 5, 2010
Millennium Development Nearing Default on Massive Loan
Mayor Gregor Robertson has stated…. The city is busy chasing down all of Millenium`s assets as security before they default on their massive loan, …….This is huge trouble for Vancouver, Millennium Development wants to slash the prices of the units in an attempt to raise some money, any money, but if the prices get lowered to the point where they sell Millennium will be short as well, damned if they slash damned if they don`t…..Toobad Millennium development has no assets, just ask the city of Nanaimo, or maybe their board of directors can point the city of Vancouver to Millennium development`s assets, oh yea, they didn`t have one!….
The Ladner/Sullivan/NPA deal is about to come home to roost, good thing juice boy has a coop ready….Read the story here, make sure to read between the lines
And…The Vancouver Sun in a unauthered editorial has already laid out Millennium`s defence in its upcoming law suit against the city of Vancouver…
Congratulations Vancouver Sun…..You will be testifying on behalf of Millenium development and against the city of Vancouver and its taxpayers I presume, after all….Your editorial board just wrote Millennium`s closing argument to the crown, what was it you wrote?,………Millennium development`s problems were all caused by the city?!
The Straight Goods
Cheers-Eyes Wide Open
Melvin: An interesting perspective from The Straight Goods blog, but perhaps the Nanaimo suit will have precedence since it preceded any not yet take legal action on the part of the City of Vancouver.
Do you know who The Straight Goods is? I am always a wary of those who hide behind a pen name just as I am wary of a Council that hides far too much behind in-camera meetings.
It is reported in the Nanaimo-Info-Blog at http://www.nanaimo-info-blog.com that Millennium in Vancouver has gone into receivership.
Yes. It’s also reported in the Vancouver Sun, the Province, and on the radio.
As I understand it, it is the project which is in receivership and not Millennium per-se, so it remains to be seen how this may affect Nanaimo’s case. The judge’s decision in that matter should be out soon.
It is said Millennium is responsible for $740,000,000 in the Vancouver matter.
Do you suppose they will pay our $3,000,000 first??? It is the developer (Millennium) that has gone into receivership. Notice a pattern with Millennium? The city takes the risk, they take none.
It will matter little even if a local judge found in the city’s favour, you don’t get blood from a stone.
Why should we sit around and suppose? We have a cause of action so we move ahead and pursue it. The cougar that looks at every deer and says to itself that the deer is too swift, starves. The one that tries survives.
I am simply wondering what due diligence was done to see if Millennium in fact had any assets to satisfy a costly judgment.
It would be delightful, if more than additional legal fees are actually recovered.
To my way of thinking, this should be the first question to be asked if we discover that Millennium had no assets in the Nanaimo deal. Until then we can hope that the reason that Millennium filed to go to arbitration is that they do, unlike, apparently, Triarc/Suro, have something to protect.
If it is determined that neither had any assets at risk in Nanaimo, then the determination of whether sufficient fiduciary responsibility on behalf of the citizens of Nanaimo was exercised, and if not, as would seem obvious if neither had any skin in the game, appropriate action should be taken against those who did not perform their professional responsibilities.
I guess I am not up to speed. I thought Millennium claimed they are not in default regards the terms of the contract and/or they would like the matter to go to arbitration??
At the end of the day is arbitration enforceable? Where is this company legally registered anyway??
You may wish to read the following as it may affect us here in Nanaimo:
Click to access RECEIVERSHIP.pdf
Looks good for Nanaimo, after all Millennium ‘Nanaimo Properties’ is not even mentioned.
I am sure we will find that our astute city managers and crack legal team thoroughly looked into the assets they could use to make good on our claim.
I also believe in Santa Claus and the tooth fairy.
So what do you propose to do about it?
Bitch and complain, it is comforting, after all there is nothing else to do.
That monolith at city hall is far too smart for the type of people engaged in local politics.
That is just a sad fact.
There is much truth in IC’s claim that city hall is far smarter than our politicians and the problem is compounded when you get a solid bloc of dumb asses (Korpan,Cantelon,McNabb,Holdom,Manhas)voting against the one person who understood the VICC fiasco (Loyd Sherry).I mean look at what Jerry Berry was able to get away with;pushing, promoting and financing(at the taxpayer’s expense) his personal agenda and then when everything falls apart he schemes his way to a $600K payoff.Now that’s smart.Another very serious problem with Nanaimo municipal politics is that we continue to elect weak mayors.Korpan was overwhelmed by Jerry Berry and continues to call him “the best City Manager in Canada”.And now we have John (it’s so difficult) Ruttan who is so over his head in the job that,if it wasn’t such a serious matter,it would be laughable.I mean,what has Mr.Ruttan actually accomplished during his 2 years as mayor??If anyone can provide something positive to this question,I would like to hear it.
Nanaimo badly needs a strong mayor and council capable of shaking up the existing management at city hall,but instead they promote and award incompetence from within.The same group of individuals who have provided the visionless programs in the past 20 years remain in charge today.
If you believe that, then perhaps you should find another hobby…
By the way, perhaps you could identify the elements of that too smart monolith before you do.
The bitching and complaining is only a minor distraction, thankfully I actually engage in productive and more enjoyable hobbies.
The monolith at city hall consists of 157 exempt employees, whose ‘average’ wage comes in at just over $100,000. They account for nearly $16,000,000 a year in salaries.
In the ‘real’ world that level of management would never be tolerated by a real board of directors.
In Nanaimo we have assembled nine people to oversee the operation of a $150 million corporation, most of whom are totally beyond their skill levels.
What group of shareholders in the real world, would appoint these 9 to run a $150 million business??
The overpaid management at city hall are working there, because they could never survive in the real world, and certainly would never command the types of incomes they are currently collecting.
From 2001 – 2009 the population of Nanaimo went up by about 9%, during that time the cost of wages at city hall went up 41%.
A ‘real’ board of directors would do something about that, however, they have to have the skill and intellect to actually understand the problem.
Which is why, we should not expect any improvements in the management of affairs at city hall than was demonstrated with the whole Millennium/VICC fiasco. It is the same bunch actually calling the shots, with more or less the same type of dim bulbs overseeing them.
Any wonder? Who in their right mind would take on the task of councilor for $30,000 a year?
As a friend of mine says, when you pay peanuts, all you can hire is monkeys.
PS: We do not assemble nine people to oversee the operations of a $150 million corporation. Those nine people (the Board elected by the shareholders), select one person, in Nanaimo known as the City Manager, to oversee those operations.
If those nine people are not overseeing the operations of the $150 million corporation, what the heck are they doing going over the budget on a line by line basis?
What is it they are doing when they approve an expense over $25,000 if they are not actually overseeing the operation?
I presume this is part of your philosophy as a councilor wannabe, on how you would perform your duty?
Wayne: I would respond to you in the same frame as I did to IC. How do we get that strong Mayor and Council? That is the question. It is clear that no matter what they do, not everyone will be happy. Citizens should be able to define the platform which they desire and then have a mechanism to ensure that, at least for the term of Council, that that platform will be carried forward.
Without some organizing principle, even with strong individuals, they remain, just that: individuals. While I recognize that my suggestion of one (or more) political parties at the municipal level is the worst possible form of organization -except for all the others- it does provide a mechanism which can keep the cannons from floating freely about the deck. It would provide a platform which, at least for three years, could provide the discipline to keep Council moving in the same direction. Councillor Sherry’s insights into municipal finance could have traction rather than being isolated and ignored if the matter were part of a platform rather than a random event.
You have noted correctly that: “The same group of individuals who have provided the visionless programs in the past 20 years remain in charge today.” If we continue with our present village level election organization, nothing will change in the next 20 years either. And there are people who are very happy with the system as it is, thank you very much…
IC: I am confused. There is something about an argument that on the one hand predicates that though we overpay our staff, we are getting lesser talents for our trouble, while on the other argues that if we would just pay our Council more, we would attract better stuff, that boggles my comprehension.
It must be remembered that Council is not there to run the city. It is there to act as the board of our corporation, set its vision, develop its policies and procedures and direct and monitor Staff in the implementation of that vision, those policies and those procedures.
The board members of large corporations do not devote full time to their duties as board members, but most likely are involved in the operation of their own firms. An examination of the duties required by the Mayor and of Councillors in the Community Charter defines a very narrow set of requirements which do not have onerous time requirements. The fact that our Council may have tried to take on the role of manageing the city rather than setting vision, policy and procedure and then performing their duties of monitoring Staff in carrying out those tasks is a matter of judgement -poor in my opinion- rather than any obligation of the job. In what other corporation do board members spend their time in what are essentially political activites: kissing babies, attending club lunches and dinners, etc. or even establishing advisory committees which they must attend. These uses of time may be politically astute, but they are essentially distracting from their primary duties. Political parties could take over these distractions and give Councillors time to read agendas and reports and perform their vital roles in oversight. (How often have you watched Council and determined that this Councillor or the other has not read the agenda or been aware of the issues involved?)
The staff is overpaid, because the underpaid overseers just do as staff recommends.
If council is not there to run the city, I would say they are doing an excellent job and my complaints are not valid.
Ron Bolin 18 November 2010 at 9am said:
“As I understand it, it is the project which is in receivership and not Millennium per-se, so it remains to be seen how this may affect Nanaimo’s case.”
Further to what Ron has said, it is definitely NOT Millennium that is in receivership.
Refer to the City of Vancouver’s News Release of November 17 -“City, Millennium reach agreement on new management of Millennium Water; Ernst & Young Inc appointed receiver effective today”
http://vancouver.ca/mediaroom/news/detail.htm?row=160&date=2010-11-17
(The actual name of the project has always been “Millennium Water”, also known legally, as Millennium Southeast False Creek Properties Ltd., & commonly known as the athletes’ village.)
You might also refer to Millennium Development Corporation’s website to see what they’re up to.
http://www.millenniumdevelopment.com/
I would think that Millennium has always ensured that all agreements they have entered into have been structured so as to protect themselves.
NOTE TO MELVIN: Sure hope you’re not relying too much on what the the Garden Bay blogger writes in The Straight Goods/Powell River Persuader. And how the heck can anyone be proud of blogging so much vitriol, nastiness and name calling is beyond me. I am surprised that he hasn’t been sued for defamation. (IMHO, the internet/social media is a fantastic tool for connecting people in order to discuss political and other issues, but it seems that there is also a very dark/negative side to it out there as well.)
Janet, Did you read this? It refers to Millennium Southeast False Creek Properties as being in receivership.
Click to access RECEIVERSHIP.pdf
Janet,
When you say it is NOT Millennium that is in receivership, just which Millennium are you talking about?
Am I to understand that the Millennium you refer to, is not the Millennium, Nanaimo was a joint partner with?
Interested Citizen:
To clarify, I confirm that I agreed with Ron that it is the actual “project” that was put into receivership.
As I understand it, the company set up by Millennium for the project, Millennium Water, (aka athletes’ village),is Millennium Southeast False Creek Properties Ltd.,and it is referred to as the “Debtor” in the Court Order document that you have referred to.
Yes … we are all talking about one and the same Millennium and the developers are brothers, Peter and Shahram Malek.
So, Millennium would have left no assets in Millennium Nanaimo, and the limit of their liability would be the assets of Millennium Nanaimo and not Millennium?
Why do you persist in beating this poor moribund horse? We will soon enough KNOW the answer and perhaps you will be correct. Will this make you happy? Why?
Just thought the blog needed some waking up! Guess I was wrong.
Bye
Well I don’t know if your surmises about the wisdom and contract skills at City Hall have kept our readers awake, but they have certainly kept the comment box busy. I just wish there had been some progression in the topic. Hope to hear from you again soon on a new topic -or on this one after you have some new information.
Janet,
you said:
To clarify, I confirm that I agreed with Ron that it is the actual “project” that was put into receivership.
As I understand it, the company set up by Millennium for the project, Millennium Water, (aka athletes’ village),is Millennium Southeast False Creek Properties Ltd.,and it is referred to as the “Debtor” in the Court Order document that you have referred to.
Yes … we are all talking about one and the same Millennium and the developers are brothers, Peter and Shahram Malek.
If Millennium sets up these companies to protect the parent, how does Millennium (the parent) benefit? Do they sell design and management services from the parent to the shell?
There must be some mechanism for them to move the funds from the shells back to the parent.
Do they ever put up their own risk capital or is it all borrowed from banks and municipalities?
Cheers
Jim
Jim:
The following quote from Vancouver Sun story of November 19th refers to commercial and personal assets pledged as security to the City by the developers …
“Under the deal, Ernst & Young has taken over the village, now called Millennium Water, on behalf of the city, which also will get access to a modest array of other commercial and personal assets pledged as security by Millennium’s owners, Peter and Shahram Malek.”
“Olympic village project to cost Vancouver taxpayers millions of dollars monthly”
By Jeff Lee, Vancouver Sun November 19, 2010
http://www.canada.com/business/Olympic+village+project+cost+Vancouver+taxpayers+millions+dollars+monthly/3857629/story.html
——————————————————————-
And you’ve got to love this from an October 16th Vancouver Sun story: :)
“If the city thinks it can sue the developer for the balance of the land price originally owed, then the biggest construction litigation case in British Columbia’s history would probably ensue. That would only enrich the lawyers, damage the project further and dredge up so much toxic mud that city hall would be shaken right off its murky foundations.”
“How city hall messed up Millennium Water” – By adding millions of dollars to the cost unnecessarily, Vancouver created the problem that it’s trying to get everyone else to solve”
By Rob MacDonald, Special to the Sun October 16, 2010
http://www.vancouversun.com/sports/city+hall+messed+Millennium+Water/3682427/story.html
The judge’s ruling on Millennium’s move to go to arbitration rather than court is in and can be found at the top of the Status of Nanaimo vs Millennium (this) article. The judgement is included. There appear to be many questions which need to be asked of the City and Staff, and many which the city should be asking our legal representatives.
I ‘think’ I have read the judgment. Did the judge find for Millennium on all counts, and award court costs?
Legal statements are not my forte. Just being a simple fellow.
Jim
Now, the Mayor will at least be able to tell how much this latest action actually cost.
Jim
Jim: Who pays the bill for the action thus far is a good question and should be asked of the duumvirate. I was told this afternoon that Council has known since the inception that Millennium had no more skin in the game than did Triarc/Suro, but that they were a BC firm that it was indicated by the City’s lawyers that there might still be something possible.
I asked my lawyer this afternoon if he thought that my plan to make my fortune by buying lottery tickets was worthwhile. He paused for a moment and then told me that it could happen and gave me the names of a couple of lucky winners. He offered, for a fee, to be on a retainer til my ship came in. But when I asked him if he would accept his fee on contingency, he turned me down flat.
Perhaps Council should have asked, and now ask again, our lawyers whether they believe enough in this case to take it on contingency.
Why anyone would think that Millennium or Suro or anyone else, who were being paid by the city to manage the project were worth suing is beyond understanding, except of course it is the same brain trust that went down the garden path in the first place.
I have posted a little musing about this whole affair on my website, thinking it could make for the plot of a horror or sit com
http://www.nanaimo-info-blog.com/2010/12/when-millennium-came-to-mayberry.html
Will anyone at city hall ever be held accountable for entering into this agreement in the first place?
Two of the chief architects, Korpan and Berry aren’t around to answer any questions as to what kind of due diligence was ever done to protect the taxpayer in the first place.
No wonder Mr. Berry was so eager to retire early.
Nope,can’t see anyone being held accountable now.There may have been an opportunity if the case had gone to trial and individuals were compelled to answer questions under oath.Ain’t going to happen now.I guess the only people left would be the politicians currently on Council who promoted and voted for the development.I guess this would be Holdom and McNabb for sure,and hopefully they will be voted out of office if they decide to run again.Ruttan,Unger and Johnstone (sp?)should also be turfed in my opinion.