The Langley Events Center (LEC) – The Inconvenient Facts, that taxpayers didn’t know about!

Posted: March 3, 2013 in Uncategorized

I ran for Mayor of the Township of Langley in 2008 because of a number of significant issues; Nobody could have prepared me for what I found after taking office!

Given the litany of issues, there should be a demand for a Forensic Audit.

I have always been guided in business with a belief that “I trust everyone UNLESS they give me reason not to”. Well what I uncovered in my first agenda and my first meeting of council tested that belief to the extreme. I would strongly suggest that if all of what I am going to outline in this post was to happen in the Private Sector or for that matter anywhere else but it seems in the Township of Langley “Heads would roll” and serious questions asked. It is probably THE single best example of what is wrong in the Township of Langley. This IS NOT a condemnation of the very popular Langley Events Center, but it is, in my opinion, about the financial mismanagement, incompetence and questionable business practices that are rampant within the Township.

The Langley Events Center, for the record, is the single largest Municipally owned construction project and property in our history. It started out as a planned $45 million project and culminated in a final $66.2 million project not counting an estimated $10 million in land acquisition / development costs. The difference between the planned cost and final cost is a product of incremental add-ons and valuable community partnerships that came about, up to and including the construction period. That increase, once it got underway, was not the problem.

So what could possibly be the problem? Where do we start – Read on!

First it is important to understand the fact that on a $66.2 million project there was NO business plan, NO taxpayer referendum and NO comprehensive public consultation. The process leading up to its planning, development and construction was missing the fundamental community inputs that would be required of any project 1/20th this size let alone something this significant – this was only the tip of the ice-berg!

My concerns started with my first council meeting!

My first Council Agenda for my first Council Meeting – After reading my first agenda which included a 15 page report on the LEC with 10 significant recommendations asking for an additional $7.5 million; I scheduled a meeting with our CAO for 8:00 AM Monday morning asking for a signed copy of the P3 agreement. His answer, there was NO P3 agreement.

By the way this is why NO P3 agreement was so critical to this project! The following is an excerpt from a “Partnerships British Columbia” document on P3s:

What are Public Private Partnerships (P3)? “… the provision of assets and the delivery of services that allocates responsibilities and business risks among the various partners.” The LEC did not include a P3 agreement as promised.

It was a little late in the process with the LEC 75% complete to find out that taxpayers were misled in such a significant way. BUT there was much more to come!

The next step was later that day in my first in-camera meeting with Council.  I informed Council members that there was in fact NO P3 agreement in place as was publicly stated and advertised to the taxpayers of the Township of Langley for the best part of 3 years. It is essential for taxpayers to understand the impact on them for this not being in-place. Again all risks will now be solely on the backs of the Township taxpayer.

Given the gravity of this situation I requested Council’s courtesy for a one week deferral to allow us to better understand and deal with what we had just learned. In support of that request I added that they had a New Mayor, a New Councilor and one councilor was away – The answer, very quickly I might add, was NO; call the question on the motion. I would suggest that any well-meaning council given this information would at the very least take a step back and cooperate fully to know all the facts, or did they know all along? Just asking the question? Does anyone still wonder why I became very concerned? Great start in co-operation with a new Mayor, in the first meeting!

After this disappointing decision by council I immediately asked Mark Bakken for a copy of every document produced on the Langley Events Center since it started. I received a very large binder within a couple of days. I have seen and read every document.

So I started off in this Post with the surprise that faced me immediately after the election, but where did this whole thing start?

A little history – The Township of Langley was planning for a Community Center up in Willoughby. I am assuming that Rich Coleman who with TOL staff had bigger plans because Coleman had the Province of B.C. commit to a $15 million grant (conditional on the use of B.C. Wood) in what was then heavily advertised as a P3 agreement. This fact was heavily promoted and marketed by both the Provincial Government and the Municipal Government per Press Releases of Dec. 18th, 2006, Jan.8th, 2007 and Nov. 19th, 2007. Again there was NO P3 agreement.

An RFQ and RFP was circulated (I am not convinced that it was a transparent process) with five submissions received as I was advised by staff. What evaluation process was used to score the various bid responses? What was made public? The winning bid announced was a group known as “The Langley Development Group” (LDG), ownership partners Mr. Jim Bond and Mr. Moray Keith. These are the same principles that built the Prospera Center in Chilliwack for the City of Chilliwack. Mr. Jim Bond, co-owner of the LDG, is the owner of Vantana Construction who had the construction contract to build the Langley Event Center. Interesting connection?

So, as stated above, our $66.2 million project minus a Business Plan, minus any Comprehensive Public Consultation and minus a Public Referendum was underway. OH yes and there was NO Partnership Agreement let alone NO P3 agreement. There was a Construction Contract and an Interim Development Agreement which contained a Proposed Partnership Agreement. So outside of the foregoing here is the list of issues of serious concern. Some had been corrected by me when I discovered them (I have indicated corrected where I was able to make changes).

NO P3 Agreement was just the tip of the ice-berg, it became far worse, here were the issues, here is what I faced:

  • One large downtown Vancouver Law firm was negotiating a partnership agreement for both parties, the Langley Development Group and the Township of Langley. (Corrected)
  • No plan for independent legal-counsel to protect the taxpayer’s interest. (Corrected)
  • Township of Langley Council (pre 2008 election) passed a couple of resolutions to direct staff to negotiate and complete a development and partnering agreement for the LEC. TOL Council abrogated their responsibility to staff by passing these resolutions. Until I intervened staff had the authority to sign off on all agreements without coming back to council. (Corrected)
  • Council approved the authorization of the disposition (at fair market value) of high density residential locations on the Langley Events Center site. (Corrected)
  • Council stated that $5 million of the $7.5 million request for more money at our first meeting of our mandate was due to an unfulfilled promise by the Federal Government. After careful review of all correspondence that was not true. There was NO promise made by the Federal Government.
  • The Township of Langley were eligible to be considered for the Federal Government  Grant had they applied before the start of the project. Further proof of very poor planning.
  • No plan for a Senior Accounting Firm i.e. BDO Dunwoody. (Corrected)
  • The Interim Development Agreement states …”acknowledges that the price does not include any fees, payment or other consideration to be paid to LDG for its services.” How can a municipality, a public body, enter into an open ended agreement without a firm and committed outline of commitments and responsibilities? What fees? For What services? It was silent on these details which opened the Township up to the potential for serious abuse! Is that what happened? Just asking the question?
  • While the project was 75% complete the Interim Development Agreement states “Langley and LDG are working towards the creation of a public / private partnership? – How is it possible that an agreement wasn’t in place prior to the start of the project? Never concluded, never initiated.
  • The proposed Partnership Agreement was suggesting a 20 year operating agreement with KBR, (Keith, Bond, Ringdal) (Corrected)
  • The proposed Partnership Agreement between the Township of Langley and the Langley Development Group called for a 40 year partnership agreement for high rise development around the Langley Events Center. (Corrected)
  • The Interim Development Agreement refers to an agreement similar to the Chilliwack Model. It has been clearly outlined that this is not similar to Chilliwack. Chilliwack is a true P3 with a maximum yearly liability to the City of Chilliwack.
  • As part of the argument in negotiating a settlement with the Langley Development Group, the LDG commissioned an independent appraisal of the facility which came in at $100 million. In a media question with reference to me being critical of the settlement Rich Coleman interestingly enough sang the praises of it being a good deal referencing the appraisal. (Why would Rich Coleman speak in defense of the settlement, remember his habit of phoning elected councilors, just asking the question)? A very qualified senior appraiser completely disagrees with that appraisal outcome, but Council bought into the private group’s argument. I can’t understand why?

I challenge anyone with an iota of common sense and/or business experience to look at the foregoing issues and not seriously question – Who is responsible and HOW could this have happened? There is a litany of questions that still have not been answered, by council and staff! In my 45 years in business dealing with my own business and corporate management responsibility I have never experienced such irresponsible decisions.

Mayor Rick Green’s Press Release December 15th, 2010 – After the conclusion of negotiations with the Langley Development Group and therefore the release of all information I issued a detailed Press Release. It is clear that I have been critical of our local media for some time and I believe the pathetic lack of detailed reporting on the issues contained in my Press Release surrounding the Langley Events Center is the best example of what I have been talking about. Nobody is or has been holding this Council’s feet to the fire. It is out of control. It hasn’t changed.

An interesting comment by the local media – On the day of my Press Release I was at an event and got into a discussion with an Editor of a local paper. His comment says it all “it isn’t as bad as you say it is and isn’t as good as they say it is”! Now isn’t that a brilliant statement – I rest my case. Any journalist with an ounce of integrity would challenge council and my Press Release! Ask questions and investigate what happened! Apparently not in the Township of Langley.

Conclusion – There are a number of other concerns that I had as we went through this process on the Langley Event Center. In any event, despite all of the issues that I have listed and many more not covered, the Langley Development Group were paid out a settlement of $8.83 million despite the wording in the Interim Development Agreement that was silent on the services they provided or the amount, if any they were to be paid. This very willing and very quick settlement by the Township of Langley is the equivalent to a 10% property tax increase.

NEW Development – Now we have a $7.5 million expansion of the LEC currently underway (The LEC is only 4 years old) that was well underway without the slightest amount of input from or notice to the public. Mayor Froese had such little respect for the public he didn’t announce it until construction was well under way. More on this at a later date!

Now you will hear from members of Council what a great facility the LEC is and I completely agree. That is no reason or excuse for such a boondoggle to occur. It is crying out for a Forensic Audit! When are we going to wake up? Who really benefited? What is the truth?

RG

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Late next week – Development in Langley, where are we going wrong and why?

Protect your Democratic Rights – Protect your NEIGHBORS Democratic Rights – stay informed, stay involved and VOTE!!!

 

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Comments
  1. Fletch says:

    I am glad that someone has finally had the guts to reveal this to the public.
    I have suspected for a very long time that Coleman is very corrupt, and seems to control everything that happens in the TOL.
    I am sure he has his sights set on becoming Premier, so everyone pay attention and don’t re-elect him!

  2. As I have said in previous posts, I had a choice after the election to stay away from anything political in the Township but that would 1) allow those that have controlled this community for decades to continue without interruption and 2) waste all that I learned while in office when I have a chance to inform the average taxpayer about what is happening. Rich Coleman’s comments to me profiled in my first post on this BLOG is a very telling commentary on who is running this community. It is far past time for residents to stand up against our resident Liberal Bully!

  3. Glenn says:

    Rick
    It has always been blatantly obvious, that the TOL bank account has been available to a select few.

    It is interesting that the Township Manager Mark Bakken is best friends with Rich Coleman.
    Seems like Bakken did not need Council’s approval to negotiate any of the outrageous LEC contracts. After 20 years of running the Hall, it must simply be a big trust factor………..
    I wonder if this is the case at any other City Hall?

    Perhaps you should provide the public with the details on Public Directorship Appointments made by Coleman to his pals, such as Moray Keith (Langley Development Group) to Director at the Lottery Corporation and Mel Kositsky (past TOL Councillor) to Director of BC Housing.

    Perhaps they had some special talents that warranted their appointments ?

    Speaking of “Rich” Coleman, am I the only person that wonders why he has so many Government Portfolios under his thumb ? He could likely run for TOL Mayor as well ? Sorry, no need for that.

  4. Glenn: On a couple of points – I cannot fathom in my discussions with other Mayors and Councilors that any municipality I know of would pass such resolutions. In my view it is unheard of. Your Mayor and Council are elected to make those decisions. Abrogating those decisions? Not allowed as fars as I am aware of. RE appointments – If anyone was to check the B.C. Lottery Commision Board they will see Moray Keith as a member and Rich Coleman was and is the Minister responsible. After the last municipal election Mel Kositsky was appointed to the B.C. Housing Board. If one wanted to connect all of the dots that is an interesting appointment. Rick

  5. Wally Martin says:

    Who can possibbly believe that the LEC is worth 100 million.
    Public buildings by their very nature have zero value.
    They are like “Fast Ferries”
    They cost 200 million to build but when you sell them they are worth 20 million
    I believe that the author of the appraisal should be questioned “under oath”
    I would really like to hear what he was told to do.
    The appraisal is a scandal

  6. Wally: The fact the proponent commissioned an appraisal and the Township allowed it unchallenged and then, by virtue of the settlement they agreed to, paid out $8.83 million and called it a good deal (Rich Coleman) one can easily see why the B.C. Liberal Party (Government) have been such a financial disaster over the past 12 years. Take a look at B.C. Hydro a former Crown Jewel of this province, it is a financial basket case. Who is the Minister responsible? Coleman you say. Just asking?It is also symptomatic of how this Municipality has been such a financial disaster over the past decade and a half!

  7. Glenn says:

    Wally
    I wonder if there is a secret deal pending, to rename the LEC to the “Coleman Theatre of the Arts”.?
    The art of politics, plunder, pillage and peachy positions.

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