The Yukon government has filed a $17.3-million lawsuit against a construction company and insurance company for failing to complete a new arena in Carmacks. (Crystal Schick/Yukon News file)

The Yukon government has filed a $17.3-million lawsuit against a construction company and insurance company for failing to complete a new arena in Carmacks. (Crystal Schick/Yukon News file)

Yukon government suing company over unfinished Carmacks arena

The Carmacks arena project will be retendered next month, Yukon government says

The Yukon government has filed a $17.3-million lawsuit against a construction company and insurance company for failing to complete a new arena in Carmacks.

Scott Design Build Inc. was tendered to build the arena in 2018. The contract was valued at $14.6 million.

The Carmacks arena was initially slated for completion in November 2020 and budgeted at $16.55 million. The federal Small Communities Fund contributed $10.5 million to the arena, with the territorial government pledging the remaining $6.05 million.

The 2,500-square-metre facility would include an indoor arena and community spaces attached to the Carmacks recreation centre. The arena would accommodate hockey, skating, curling, concerts and community events.

Last June, the Yukon News reported that the project had been delayed because the company “expressed unwillingness to work under COVID-19 self-isolation requirements.”

A Community Services spokesperson told the News that they had offered to pay for the costs of self-isolation but the construction company, which is based outside the territory, indicated they were unwilling to finish the project.

In a statement of claim filed by the Yukon government on Feb. 12, Scott Design Build Inc. is accused of failing to perform the work as required by their contractual agreement.

The construction company “neglected to prosecute the work diligently,” did not complete sub-grade preparations nor building cladding and did not propose an amended schedule when the original schedule wasn’t met, court documents say.

It continues that a consultant’s instructions on the project were given last June and were ignored. Subcontractors were not paid and then replaced without permission.

The Yukon government served a notice of default to the construction company on Nov. 30. After the defaults were not addressed, the company’s right to continue the work was terminated on Dec. 15.

Scott Design Build Inc.’s “performance of the work failed to meet the standard of a careful and competent contractor,” the statement of claim says.

The Yukon government is seeking $10 million in damages against the construction company.

It is also seeking $7.3 million from Echelon Financial Holdings, an insurance company that signed a performance bond with the two parties.

The statement of claim says that Echelon was obliged to remedy the default, pay the bond amount or arrange for the project to be completed by another contractor.

“Echelon has failed to meet any of its obligations under the bond,” the Yukon government says.

The government is now seeking a new company to complete the Carmacks arena. The project will be officially retendered in March, according to a press release issued Feb. 12.

“The Government of Yukon remains dedicated to the completion of this project,” the release states, continuing that the project will be retendered during court proceedings.

“This project is vital for the community of Carmacks,” said Community Services Minister John Streicker in a statement.

“We are committed to completing the arena to give the community a facility for residents to participate in recreational activities, and know this project will benefit the community greatly.”

The mayor of Carmacks also issued a statement on Feb. 12.

“The Village of Carmacks has been disappointed with the myriad of project delays,” said Mayor Lee Bodie.

“That said, we appreciate the Yukon government’s continued efforts and commitment to keep this project moving forward in order to assist in making Carmacks a better place to live and play, especially for our younger citizens.”

Contact Gabrielle Plonka at gabrielle.plonka@yukon-news.com

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