MacHall operating agreement and ownership dispute

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It is the SU’s position that neither current students nor alumni are being given the appropriate recognition for their financial and operational contributions over the past 60 years to the student centre.

SUMMARY

The SU has managed the majority of the building for more than four decades and the pending expiry of our management agreement prompted a renegotiation of the contract. For three years the SU and the university’s administration have been engaged in negotiations.

At the first negotiation meeting in 2013, the university referred to students as a “tenant” in the building. Their position challenged students’ rights to manage and make decisions about MacHall. So, we began digging through old files to gain a better understanding of our role and the total investments students made in the building.

We found many documents, including the original building agreement, clearly stating that the students paid for 55% of the construction costs and own 55% of the building.

In October 2013, when we brought our evidence of student ownership of MacHall to the university’s current administration, they responded by saying the topic was a “non-starter” – they wouldn’t even discuss it and reiterated that any future agreements would list the SU as a tenant and the university as the owner. They dismissed our evidence out of hand and would not provide any substantial evidence or reasoning as to why they refused to discuss the building’s ownership.

In September 2014, administration informed the SU that the current management agreement would terminate on Dec. 9, 2015. Repeatedly they have said they will take over the management of MacHall including taking over all revenues generated from the third party tenants in MacHall that occupy SU space – not university space. Any proceeds from those leases belong to the SU – not the university.

To protect more than 60 years of student investment in the building, on Oct. 21, 2015, the SU served the University of Calgary and the Board of Governors with our lawsuit related to student ownership of MacHall in order to stop the university’s efforts to take over the management of MacHall by terminating the agreement we currently operate under. We’d hoped that we could have reached a mutual understanding of our interest in the building, but we exhausted all of our options with the university administration – including three months of mediation. They left us no choice but to resolve the ownership dispute and their attempts to take over the management of MacHall in court

We’ve been entrusted with the responsibility to be stewards of well over $19 million in investments that students have made over the past 63 years. This is a complicated negotiation that gets to the heart of what value students’ investments contribute to our campus.

DETAILS, DOCUMENTATION, AND TIMELINE OF THE DISPUTE

In response to the university’s open letter published on Sept. 22, 2015, the SU pointed out that many elements of Dr. Marshall’s letter and public comments cast serious doubt on her stated goal of working together to improve the student experience. The SU’s response can be found here where the SU continued to request from the university any evidence to counter students’ ownership claim or any documentation showing that the University of Calgary did not act as a trustee of student money in exchange for a student ownership percentage of the building.

As stated in a letter to the university on Oct. 14, 2015, we are also extremely disappointed by the university’s continued threats to take over the SU’s revenue generated in MacHall which the SU invests in programs and services to support students. The university does not have any right to the revenues generated by the SU, or decisions over SU space. These threats are disrespectful to students. In Dr. Marshall’s Oct. 8 letter, she refuses to engage in negotiations about students’ ownership in MacHall.

After receiving a final public letter on Oct. 19, 2015 from board chair Bonnie DuPont which reiterated that the university is unwilling to negotiate over the legal ownership of MacHall, the SU served their statement of claim to the university on Oct. 21, 2015. The university filed their statement of defence on Nov. 10, and on Nov. 18 the SU filed their formal reply to that statement of defence.

To preserve students’ rights in MacHall, the SU filed an injunction to prevent the university from assuming the management, operations, and revenues from MacHall on Dec. 9 (the termination date of the operating agreement chosen by the university administration). The injunction was to be heard before the Court of Queen’s Bench of Alberta on Friday Dec. 4, 2015.

However the University of Calgary and the Students’ Union agreed on Dec.3, 2015 to enter mediation with regards to ownership and an agreement to maintain the Students’ Union’s management of Mac Hall.  Both parties agreed they would not speak publicly about the mediation or the subject matter of the mediation until the end of the mediation period. All legal proceedings were put on hold during the mediation period, and the SU continues to operate and manage MacHall under the terms of the current License of Occupation, Operating and Management Agreement.

On Feb. 26, 2016 the University of Calgary and the Students’ Union agreed to extend the mediation period to March 21, 2016.  On March 21 the mediation was extended to March 24, 2016. On March 26 it was extended to April 15, 2016.

However, on April 15, 2016, after three months of mediation, negotiations over the ownership and management of MacHall broke down.

The SU believes facts of this situation are clear and is very frustrated that progress wasn’t made during mediation. It has become extremely evident that reaching a mutually agreeable solution with the University of Calgary Board of Governors may not be possible with the university’s current administration, so the SU is still prepared to proceed with litigation.

It is the SU’s position that neither current students nor alumni are being given the appropriate recognition for their financial and operational contributions over the past 60 years to the student centre. The SU entered mediation to discuss the ownership and management of MacHall and were willing to work on an agreement that would be fair and equitable and recognizes the investment of both parties.

The SU remains prepared to resume negotiations with respect to the building once students’ ownership stake has been properly recognized. This is an open offer to the university’s administration and to the university’s Board of Governors should either group of decision makers choose to accept it.

The SU will continue to fight for students’ ownership rights in MacHall. The next step is for the SU to seek an injunction to prevent the university from terminating the current agreement and assuming the management, operations, and revenues from MacHall. The injunction hearing is scheduled for May 5, 2016, at 2:00 p.m.

On Apr. 21, 2016  the university administration sent a letter to all SU tenants telling each of them to make their rent cheques payable to the university as of May 6, 2016.

ADDITIONAL INFORMATION

To read more about how the ownership dispute could impact students, click here.

To read more about the ownership dispute in the news, click here.

For more detailed information, please see the following summary documents:

 

To view the SU’s Statement of Claim, please see the following document:

 

60 Years  of Student Investment?

More than 60 years ago, our students began to set money aside to invest in our student centre. Beginning in the academic year of 1953/54, the Students’ Union began to collect a building fee, with the goal of constructing a students’ union building. Eventually, in 1969, undergraduate students paid 55% of the cost of constructing the original MacEwan Hall. Over the years, the Students’ Union (SU) and students continued to make substantial contributions to each of the major construction phases and redevelopment projects in MacHall.

Consultation Results

MacHall, the SU’s Home

After more than 40 years as the building managers of the student centre, the SU now runs many excellent programs, events, businesses, and services all with the goal of improving the university experience for University of Calgary undergrads. Many of the original investments in spaces throughout the student centre also laid the foundation for successful businesses that help keep student fees low.

However, students are often unaware that some of their favourite events, programs, services and businesses are actually run by the SU and that a history of investments made by students who came before them help make these initiatives possible.  Here are a few examples, but you can look for more throughout MacHall:

  • SU Q Centre
  • SU Campus Food Bank
  • SU Clubs
  • SU Volunteer Services
  • Info Centre/Lost & Found
  • Bound & Copied
  • The Den

That’s why the SU is running the “60 Years of Student Investment” campaign, to help students understand that many of the memorable experiences for undergraduates outside the classroom are the result of the stewardship and investments made by our alumni.

Using banners hung in large, open, high-traffic spaces throughout the facility, the goal is to draw attention to the history of MacHall and the SU, and to invite current University of Calgary students to take pride in it. The campaign also intends to support and provoke a positive, ongoing public conversation about the future of the building.

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