An independent audit should be conducted into the St. John’s Port Authority’s handling of the Pier 7 development, Mayor Andy Wells said Wednesday. “Maybe it’s a question for the auditor general of Canada to have a look at,” Wells said. “From my perspective, there’s a broad policy here. These agencies…they get a revenue stream and then carry out their business. I don’t think there’s enough transparency or accountability.”

The St. John’s Port Authority has been at the center of controversy since the Telegram revealed the authority was tearing down a sail-like frame on the harbourfront in order to accommodate the needs of The Keg Steakhouse & Bar. The port authority had already pumped about $800,000.00 into the uncompleted restaurant project and insists it will get the money back – plus an additional $1.7 million to construct a new building – through the 20 year lease agreement with the Keg.

But some local restaurateurs are upset at how the project was handled in the first place. Sources have told the Telegram that the port authority was repeatedly told during proposal calls that the initial building design restricted them from submitting feasible proposals. In other words, the size and layout of the building would not coincide with their business plans. There have also been concerns that the authority halted a third request for proposals last fall, decided to redesign the building and signed The Keg last week to a 20 year lease without consulting other interested parties about the revised plan.

But Sean Hanrahan, the authority’s CEO said due process was carried out with one public request made for expressions for interest and two public requests for proposals from 1999-2001. Hanrahan also said the request for proposals closed on the scheduled date and results were assessed in the normal course of business. “Unfortunately, there were no proponents that would have allowed the port to break even on its investment – but the process was not halted,” he said Wednesday.

Hanrahan said the authority isn’t required to issue a call for proposals and could have picked whatever restaurant it wanted, but decided to follow due process. “We did have four bids. So four people were interested and I , again, haven’t received anything by way of negativity or complaint from those who bid,” he said. “We simply didn’t have proposals that were financially sound enough to provide a break even point on the investments.”

Hanrahan said the steel from the rejected frame will be reused in the new configuration. “This is such a huge good news story for the city and the region,” he said. “We’re revitalizing public space on the waterfront. We’re creating 140 new jobs. We’re creating almost $40,000.00 in annual taxes. All I am hearing is negativity.”

Wells said he’s been concerned about the port authority ever since it built a new headquarters on prime waterfront land a few years ago. That should be looked into as well, he said. “The harbour is the most important resource to the City and they should not have been allowed – board chairman) Mel Woodward should not have been allowed, with a bunch of political appointments, to waste $2 million (on a new headquarters). It happened.” Wells said.

“The question you have to ask about the kiosks down there (on Pier 7 is) is that a repetition of the same? I don’t understand from a policy or decision making perspective why you would construct a building on spec.”

While the Atlantic Canada Opportunities Agency put $1 million of taxpayers’ money into the overall $4 million project, to fund nine seasonal tourism kiosks and “park-like” landscaping adjacent to the controversial restaurant structure, ACOA insisted in a Telegram story Tuesday that it didn’t provide funding for the restaurant. However, The Telegram has obtained an offer made by Martek Morgan Finch – which handled the request for proposals for the port authority – to a restaurant owner. In that letter, Martek Morgan Finch offered the fish and chips restaurateur a five-month lease in on of the ACOA funded kiosks for $6000 plus HST.

“Kiosks are to be taken as is, and any tenant improvements will be the tenant’s responsibility and subject to landlord approval,” the letter stated. “Should you be interested in operating a fish and chips outlet please advise by noon on Monday, Feb 23.”

ACOA spokesman Doug Burgess said it’s up to the port authority to decide what the kiosks are used for. “We are of the opinion that the St. John’s Port Authority has the administrative experience and the management expertise to conduct their affairs in a responsible way…Those kiosks aren’t that large. Hoe big a ‘restaurant’ is going to go in one of the kiosks?” he said. “We wouldn’t fund a large stand alone restaurant per se, something the size of the Keg that’s being discussed. We wouldn’t fund anything like that – a commercial venture – in an area that’s already being well served in the restaurant trade by a number of operators.”

Chuck Matchim, the owner/operator of Chucky’s Restaurant on King’s Road, confirmed he was approached about the kiosk but declined because of concerns about how the Pier 7 project was being handled. Matchim has already said he approached the port authority more than a year ago about problems with the initial design of the restaurant building. Hanrahan insists that a proponent representing Chucky’s specifically informed him – prior to the termination of the most recent proposal call – that they had found another location.

The Pier 7 development is to accommodate nine kiosks, one of which has now been redesigned for use as a washroom. The original design did not include such facilities.

The Telegram. Thursday, March 4, 2004. Barb Sweet.