KED suitors concerned about fairness of bidding process

“The city has taken several steps to ensure this bidding process is fair, open and transparent,” the municipality said.

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There are concerns that a local developer has gained an unfair advantage over a project seen as one of the biggest in the city’s history.

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Dario Zulich is the developer of the Kingsway Entertainment District – he sold the land for an event center to the city for $10 – and he co-owns the land surrounding the event center, including the plots set aside for a casino and hotel.

It owns the Sudbury Wolves and the Sudbury Five, which will become two of the center’s main tenants when it opens. Additionally, Zulich is involved in the casino and hotel; in fact, it was Zulich who announced last year that Genesis Hospitality would build and operate a hotel at KED.

The two Terraprobe geotechnical reports, commissioned in 2011 and 2013, are addressed to Zulich.

Finally, Zulich is listed as co-CEO of TESC Contracting Ltd., and the website says he’s owned the company since 2000. Kitchener-based Ball Construction, which works with TESC, is one of three companies that the city has shortlisted to design and build the event center.

With all of this in mind, the other bidders had questions about the transparency of the city’s bidding process.

Bidders asked several questions about conflict of interest. The city has described its definition of conflict of interest, as well as its implications, in the RFP, or request for proposals.

“How does the city deal with the conflict of interest that exists over the fact that Dario Zulich is the developer who entered into an overall cost sharing agreement with the city for the KED and is also the CEO of TESC Contracting Company Ltd., one of the shortlisted bidders for this tender? asked one of the bidders (they remain unidentified in the document).

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While the city said it recognized the bidders had concerns, it confirmed that no one involved in the tender was involved in preparing the RFP.

“The city has taken several steps to ensure this bidding process is fair, open and transparent,” the city responded. “Once the design-build teams have identified their team members, the compliance team will sign a full relationship review and they will be required to sign a conflict of interest declaration.

“In addition, the City has retained the services of a fairness monitor. The Controller’s role will be to monitor and review the procurement process from the development of the bid solicitation through to contract award. »

The city said Mississauga-based Ball/TESC, EllisDon and PCL Constructors were shortlisted ahead of the June 2017 vote in which council voted to locate the center of events at KED.

The bidders also had concerns about various aspects of the evaluation criteria, which they felt were biased in favor of Zulich.

Several questions were asked about the fees to be paid to unsuccessful bidders. Some promoters felt that the amount offered was insufficient, while others expressed concern about the ambiguous wording.

Finally, a bidder asked about the OPP’s corruption investigation that is currently underway.

The city said it was not aware of “any of the developers engaging in professional misconduct.”

The City of Greater Sudbury issued a request for proposals earlier this year for the design and construction of the event center at KED.

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Bidding on large projects like KED is costly and time-consuming. A team often collaborates and the process usually involves several steps over several months.

To level the playing field, a question and answer period was part of the bid solicitation process. The 14-page document includes 40 questions covering various aspects of the application process as well as the municipality’s expectations. This allows bidders to raise concerns and seek clarification.

An evaluation team made up of municipal employees and external architects will evaluate the proposals. A fairness monitor will ensure that the process is transparent, free and fair.

The KED will include a $100 million event center paid for by local taxpayers; a $60 million casino built and operated by BC-based Gateway Casinos; and an upscale hotel, owned and operated by Manitoba-based Genesis Hospitality. Its opening is scheduled for 2025.

While the city states on its website that the capital budget to build the event center is at least $100 million – critics of the project have argued due to recent increases in construction costs, the KED is now hovering around $113 million – in RFP documents, the project is valued at a maximum of $92 million.

“The city has a budget of $92 million, excluding HST. This budget includes all costs, including but not limited to the cost of services and design-build works, as well as contingencies for event center price risks,” the RFP states. . “Proposals received with a financial proposal higher than the budget will be automatically rejected.”

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In questions and answers, the city said it is the bidder’s responsibility to “prepare a design and cost proposal within the limits of the city’s budget.”

Ian Wood, the city’s executive director of strategic initiatives, communications and citizen services, told the Star that the $8 million variance is the result of other costs associated with the event center, which do not not part of the construction of the building.

If this had been done, for example, site preparation would cost a total of $9.7 million, split between the municipality; Gateway Casinos; the hotelier; and Zulich. The city was to be responsible for $5.9 million, while Gateway would have paid $2.2 million. The hotelier would have covered $1.1 million and Zulich would have had to pay $530,000. Site preparation was postponed to last November, the day it was supposed to start. Gateway said they were putting the project on hold pending the results of an OPP corruption investigation and a legal action by the Minnow Lake Restoration Group.

The police investigation was launched last year after Ward 3 Coun. Gerry Montpellier said representatives from Gateway Casinos and Zulich approached him to try to influence his 2017 vote on the location of the event center. Montpellier abstained from voting.

The solicitation period ends in June. Bidders must submit their bids by June 9 at 1:30 p.m.

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