SEARS SUES RYERSON OVER BUILDING NAME

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By Eric Lam

News Editor

Sears Canada is suing Ryerson over the naming of the George Vari Engineering and Computing Centre after the company donated $10 million to help the school buy the property and received only a plaque in return.

However, Ryerson VP University Advancement Adam Kahan says Sears had approved the school’s plan to honour the company with a plaque in the building prior to its opening in September 2004.

“We proposed a plaque, we showed them, and that’s what we did,” he said Tuesday. “They accepted the plaque, and there was a representative at the grand opening of the building.”

According to Kahan, he and then-Ryerson President Claude Lajeunesse met with Brent Hollister, who was president and CEO of Sears at the time, just before the opening of the engineering building. The pair had brought a prototype of the plaque, which Hollister approved.

Sears argues in the statement of claim that Ryerson failed to meet the terms of a contract signed in 1991 in which the Canadian retailer and the school’s board of governors partnered to purchase property on Church Street. In exchange for its help, the school agreed to a “naming covenant” to associate Sears with a facility on-campus.

The company is seeking a declaration from Ryerson that the school has not met its contract obligations, and also expects the school to name an academic facility after Sears. Failing that, Sears is seeking damages for breach of contract in an amount to be determined.

As part of the initial agreement, Ryerson agreed to purchase a 51 per cent stake in the property worth $6 million. However, Ryerson only paid $1 million towards that purchase, with the rest of the cost covered by a mortgage taken out by Sears.

Sears then donated the 48 per cent of the property it purchased to Ryerson.

All told, the company donated in excess of $10 million to the school.

Vincent Power, director of corporate communications for Sears Canada, said the company did know about the plaque before it was installed.

“We knew about the plaque, we knew. Was the plaque in lieu of what had been agreed to? No. We knew before it went up but it’s not in lieu of our compensation,” he said. “We certainly believe in the action we’ve taken.”

Ryerson President Sheldon Levy disagrees that Sears deserved more in exchange for the money it donated.

“I don’t weigh one gift against another, or the size of a sign against each other. It’s not a competition,” he said.

According to the claim, Sears first approached Ryerson in September 2006, two years after the building had opened and a year after it was renamed.

Kahan confirmed this, but added the contract did not define what “associating” the name of Sears meant to each party.

“What I understood at that time was we would make them a proposal and show them how [we would] acknowledge their donation towards the construction of the building, which was affixation of the plaque to that building,” he said.

Kahan added that even before the building opened, there was a very public campaign to find a donor. The university wanted $5 million, and got it from Canadian philanthropist George Vari.

Julia Hanigsberg, Ryerson’s general counsel and the lawyer handling the case, said she had not yet filed a statement of defence and would likely ask for an extension.

Levy still counts Sears as a friend, despite the lawsuit. “I believe we will continue to see them as a good partner. It’s a bump on the road,” he said.

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