Katz Group, Edmonton homeless charity in legal fight over $5-million donation

Boyle Street Community Service's new building on 101 Street and 107A Avenue in Edmonton on March 21, 2023 (Matt Marshall/CTV News Edmonton) and a rendering of what it will look look like when renovations are completed. (Credit: Boyle Street)

An arm of Edmonton Oilers billionaire owner Daryl Katz's business empire is suing the homeless service charity from which it purchased real estate near the NHL team's downtown arena.

Ice District Corporation, a subsidiary owned by the Katz Group, is suing Boyle Street Community Services in a civil lawsuit, claiming it doesn't have to donate an agreed upon $5 million because the charity failed to adequately raise funds to build a new drop-in facility.

It filed a statement of claim in November arguing the Edmonton charity didn't make enough efforts to raise funds for the King Thunderbird Centre that's replacing the former drop-in locale at 10116 105 Ave. that Ice District Corp. purchased from Boyle Street for $5 million in 2021.

Boyle Street announced a $28.5-million campaign to raise money for the project, needing at least $8.5 million to begin it.

As a part of the Ice District Corp. deal with Boyle Street is a conditional $5-million donation, a 'backstop gift' it pledged to pay in case Boyle Street didn't meet its fundraising goals that would decrease dollar by dollar if the charity exceeded its $8.5-million threshold..

On Tuesday afternoon, Boyle Street said in a statement on X, the social media platform formerly known as Twitter, that it's in "an ongoing legal process" with the Katz Group, and that litigation between the two parties "has moved into a private arbitration process."

"We believe this matter will be resolved in a timely way," it said on X.

Boyle Street also received a $10-million donation from the Edmonton Oilers Community Foundation to use for the construction of the King Thunderbird Centre, which is being established at the site of the former Edmonton Public Schools headquarters three blocks north, as part of the deal.

Boyle Street, as part of the 2021 sale, entered a lease agreement with Ice District Corp. for $1 a month. It ended on Sept. 30 last fall.

In the statement of claim filed by the Ice District Corp. on Nov. 14, it argues Boyle Street "has not utilized its 'best efforts' in undertaking and completing" fundraising for the new drop-in facility.

It said the charity "simply targeted a small list of potential private donors," didn't "adequately and appropriately pursue" funding from federal, provincial and municipal governments, didn't begin general community outreach campaigns until March 2023 and had refocused its fundraising efforts in July 2023 to its endowment fund instead of the the capital campaign for the King Thunderbird Centre.

Ice District Corp. also alleged Boyle Street didn't provide regular updates, as was agreed to, and has continued its capital fundraising campaign "with no determined end date," contrary to the agreed two-year term of the campaign ending Sept. 30, when the charity vacated the property.

Among the remedies sought by Ice District Corp. is a declaration that it "is not required to make the backstop gift at any time, or at all."

In its statement of defence filed on Dec. 13, Boyle Street said it denied all of the Katz Group's allegations, that it denies it breached the backstop gift agreement between them and is seeking to have the claims against it dismissed.

The charity said it "had every motivation" to raise as much money as possible toward the construction of the King Thunderbird Centre given increased construction costs since the 2021 sale, adding it "used best efforts to raise funds" for the capital campaign and sought advice from strategists for it, "which dictated a focus on potential large donors at the front end of the campaign, followed by a staged, broader campaign."

It argues it ran a successful capital fundraising campaign and that the Katz Group, which had representatives in the capital campaign 'circle,' "was fully aware" of its fundraising progress.

Boyle Street said it applied for significant federal grants "and secured approximately 150 private donations," and that it met with all three levels of government "in an effort to maximize the funds raised."

Boyle Street also claims after it extended its lease until Sept. 30 that Katz Group wrote to the charity advising the lease would be terminated on Sept. 30 and stated any extension beyond it would lead to the backstop gift of $5 million being "concurrently terminated."