Manitoba Liquor & Lotteries (MBLL) to Cancel Unnecessary Downtown Relocation
Project outside the mandate of MBLL and at risk of significant cost overruns: Craik
Manitoba Liquor & Lotteries today reported the findings of a review conducted by the corporation’s new board of directors at the request of the Government of Manitoba. The review looked into procurement and tendering processes related to the proposed head office development, with the goal of ensuring efficiency and cost-effectiveness. This resulted in a specific analysis of the corporation’s September 2015 purchase of 233 Kennedy Street (the Medical Arts Building) and decision to renovate the building and utilize it as the location for its amalgamated corporate head offices.
“Our board’s review has resulted in a decision that the corporation will utilize existing office space for its corporate employees and will not be proceeding with previous plans to construct a new $75 million headquarters,” said board chair Polly Craik. “Our review concluded that the corporation’s existing office space is sufficient to meet the ongoing needs of staff. We could not support spending a minimum of $75 million of public funds for a project that would see Manitoba Liquor & Lotteries operating as a commercial property developer, well outside of its core mandate.”
The decision not to proceed with the $75-million head office project follows a comprehensive review by the organization’s board of directors. The review concluded that:
- There is no operational need to develop a new building for corporate employees. Existing office space is sufficient to meet the needs of corporate staff.
- Construction projects of the size of the proposed new headquarters, particularly those associated with the renovation and development of an older building, face significant risks of cost escalation. The board concluded that these cost uncertainties could put additional public dollars unnecessarily at risk.
- The original project would have required Manitoba Liquor & Lotteries to take on the roles of commercial property developer and property and asset management. These roles are outside the mandate of supporting the province through liquor sales and gaming operations.
“Our review concluded that any possible net savings from this project are negated by the risks of construction cost over-runs associated with renovating and developing an aged building,” said Craik. “Manitobans expect us to make prudent financial decisions that are in the public’s best interest and that is what we plan to do.”
For interviews with Polly Craik, Board Chair, and Jim Morden, Board member: