The Winnipeg Police Headquarters Inquiry continued Thursday, hearing from former City of Winnipeg CAO Phil Sheegl and Caspian Projects Inc. owner Armik Babakhanians.
The inquiry seeks to understand the mismanagement of the $214 million redevelopment of the downtown Canada Post building into the current Winnipeg Police Service Headquarters.
Phil Sheegl told the Winnipeg Police Headquarters Inquiry that the RCMP investigation and civil court case following his controversial time as City CAO were “crushing,” and called the past 16 years “an emotional rollercoaster.”
Story continues below advertisement
“I am so embarrassed as a human being, as a businessman,” he said.
Sheegl described an especially difficult period in his life, beginning in 2018, as news of his business dealings with former mayor Sam Katz and Caspian Construction president Armik Babakhanians made headlines.
A 2022 civil case found Sheegl accepted a bribe from Babakhanians in connection with the Winnipeg Police Headquarters redevelopment that went overbudget by $79 million.
“I’m a big boy,” he said. “I can take it, and I can deal with it. But the repercussions and the ramifications and the feelings that this has put on my family is not deserved by them.
“It’s been really hard over the last 16 years to have the last name Sheegl.”
2:13
Inquiry will examine Winnipeg construction project mired in controversy
The day began with Sheegl’s counsel, Richard Wolson, asking about the value of the acre of Arizona land Sheegl and former mayor Sam Katz sold to Babakhanians for $327,000 in 2011.
Story continues below advertisement
Sheegl and his business partners, which included Katz, purchased the land in 2005, as development in the area was “getting off the ground.” Sheegl described the area known as Tartesso as a “master planned community” and likened it to Sage Creek in Winnipeg.
Related News
Sheegl maintains Arizona land sale was legitimate
The inquiry heard the value of the land increased significantly as a new freeway spurred industrial development in the area.
Get weekly money news
Get expert insights, Q&A on markets, housing, inflation, and personal finance information delivered to you every Saturday.
Sheegl was asked about an affidavit in which he previously stated the Tartesso land was valued at $47,000 per acre, significantly less than a 2008 appraisal valued it. Sheegl told the inquiry he had made an error in the affidavit and that it was worth more.
“I have nothing to say other than the state of mind I was in,” he said. “It’s a very big mistake to make.”
Sheegl said he felt he was “social enemy number one” at the time and that he felt he was being pushed out of the city, but couldn’t leave due to family reasons.
He also described how his employment with the City of Winnipeg was the first time he’d managed multiple construction projects at once, having worked in real estate investment for more than 20 years prior.
In his closing statement, Sheegl defended former mayor Sam Katz, saying he was treated unfairly.
Story continues below advertisement
“I take great offence to the accusations that were made and that were ruled by the courts,” he said.
“The things that Mr. Katz has done for this city before being mayor, bringing in baseball, bringing in concerts… And then at the end, that someone would have the… disrespect or audacity to paint him with this picture, is awful.”
Sheegl testified for two and a half days. Upon Commissioner Garth Smorang telling Sheegl he was free to go, Sheegl let out a celebratory cheer.
Armik Babakhanians began his testimony in the afternoon. The inquiry heard he was born in Armenia and immigrated to Canada in 1981. He started what is now Caspian Projects Inc. in 1984.
Commission counsel Heather Leonoff questioned Babakhanians about his bid on the project, which was by far the lowest of the four offers on the Request for Proposals, asking if he knew his bid was unrealistic.
Story continues below advertisement
“You can lowball a house, but this calibre of project? No,” he said.
Babakhanians was also questioned about an email he sent himself following a conversation with Sheegl, which stated Sheegl would get “approval for 126m” and that he thought Sheegl “wanted 2 + 2 for sam and phil but the rest for us.” Babakhanians told Leonoff he didn’t recall what “2 + 2” meant, and that it came up in the conversation and added it to the note.
Leonoff also asked if the $327,000 he paid to Sheegl had anything to do with his successful bid for the WPS headquarters project.
“I work hard enough, I don’t have to pay people to work,” he said.
Babakhanians’s testimony continues Friday.
© 2026 Global News, a division of Corus Entertainment Inc.