Construction company suing Thermea spa developer

The company hired to build the Nordic spa Thermea that opened in Winnipeg last January is now suing the Quebec project developer for breach of contract and for more than $1.3 million.

KDR Design Builders (Commercial) Inc. filed a statement of claim July 9 against the spa operator Nordik Immobiliers Winnipeg Inc., construction manager Construction Martin Paquette Inc., and Le Nordik Inn & Spa Inc.

The City of Winnipeg allowed the spa to be built on land leased in the city-owned Crescent Drive Golf Course in Fort Garry and the facility was to open in 2013. After some delays, it opened Jan. 14, 2015.

The statement of claim said Paquette hired KDR to build the spa for $6.4 million with construction starting in August 2012.

The first problem encountered, the claim said, was that Paquette had not obtained approvals from the city for a retention pond. After that, the claim alleged there were numerous changes to the design and scope of the work.

KDR alleged the changes increased the contract price and resulted in construction delays.

In February 2013 "Paquette advised KDR it was running out of money. As a result, Paquette began making further changes to the design and scope of the work in an effort to reduce the cost of the project," the claim said.

Bones found on site

An additional delay came in April 2013 when "bones were found on the construction site as a result of which KDR was instructed to stop work on the project."

Winnipeg police said they have no file on this and it's not clear what kind of bones they were.

The allegations against the spa have not been proven in court and a statement of defence has not yet been filed.

In a statement to CBC News, the spa company Nordik Group said it is reviewing the statement of claim filed by KDR.

"This is a complex matter and Nordik Group intends to vigorously defend the lawsuit, and anticipates filing a counterclaim," said Nordik Group president Martin Paquette.

The statement said "the Nordik Group is very pleased with its successful expansion to Winnipeg, and we will continue our normal operations with the current staff, which has already welcomed over 20,000 visitors."

Project short funding

The statement of claim said that after a meeting in August 2013, the construction management company Paquette asked KDR to "walk away" from the project and provide Paquette with all documentation concerning its subcontracts. In return, Paquette was to pay KDR money that was then outstanding.

Subsequently, Paquette began to meet with some of KDR's subcontractors with a view to hiring some or all of them directly, the claim said.

"Paquette represented that it was short $1 million in funding and that it wanted to take over the project on a contract management basis in an attempt to reduce the project costs," the claim said.

On Sept. 9, 2013, KDR gave notice it considered the contract terminated.

The claim said Paquette did make a payment to KDR but KDR did not accept the trust conditions on the payment and therefore did not accept it.

The developer of Thermea spa also operates the Nordik Spa-Nature at Chelsea, Quebec, not far from Ottawa.

In 2012, the Tourism Industry Association of Canada honoured the Chelsea spa operator with its "Innovator of the Year" award, with the Chelsea facility described as the largest day spa in North America.

The Nordik Group has announced plans for a third spa in Whitby, Ontario.