07/24/2013 04:00 EDT | Updated 09/22/2013 05:12 EDT

Contractor's unwanted Algo mall repair a 'disaster,' owner tells inquiry

ELLIOT LAKE, Ont. - One of a dizzying series of attempted fixes of the perennially leaking Algo Centre Mall proved a costly fiasco that only made matters worse, the inquiry into the mall's collapse heard Wednesday.

The contractor had used a jack-hammer on the rooftop parking deck, creating gaping holes.

Mall owner Bob Nazarian testified he rushed over after receiving a panicky phone call on July 15, 2008, from one of his staff.

"The mall was a fiasco. It was a disaster. It was a shower all over," Nazarian testified.

"I was so upset, there was a big chance I could have heart attack. I said, 'What have you done?'"

Nazarian said he had never wanted Peak Restoration run by Glen Day to do the work in the first place, and blamed a conspiracy between his mall manager and Day for the fiasco.

Peak had begun work on the roof weeks earlier, even though Nazarian had not yet signed a draft contract worth more than $400,000.

Nazarian said he only found out through a phone call from his lawyer the work had started.

"I was shocked," Nazarian said.

Still, he ended up signing a contract with Peak and paying him $80,000.

Why, commission counsel Peter Doody wanted to know, did Nazarian sign the deal and pay Day under the circumstances.

"We didn't have way to go back and fix it. They'd already jack-hammered the roof and so on."

After the mid-July fiasco, however, Nazarian did fire Day, who packed up and left the job site, taking with him tools paid for by the mall.

Nazarian also denied signing a bogus contract as one of a series of desperate measures aimed at dealing with the roof, which ultimately collapsed June 23, 2012, killing two women.

He insisted a June 2008 deal with a company set up by a family friend — who had no contracting experience — was no "sham" aimed at obtaining financing to carry out the repairs.

The inquiry also heard how Nazarian had been on the verge of signing a contract worth $903,000 to put down a waterproof membrane on the roof and cover it with asphalt.

However, Nazarian said he discovered the plan developed by an architect would not work because of the weight of the needed materials.

"I'm thankful to my God that I did not sign the contract," Nazarian testified on his second day on the stand.

"We could have had a catastrophe."

Still, a local newspaper in April 2008 trumpeted the proposed fix, saying work would be starting in two weeks.

In testy exchanges with Doody, Nazarian blamed the mall manager for providing false information.

Nazarian also described how he desperately sought financing for the repair work by, among other things, asking the town to forgo property taxes on the mall, the largest local taxpayer.

However, the town was legally precluded from lowering the taxes.

"I explained the mall needs help," Nazarian said.

"The other suggestion was to help me to fix the damn roof."

Nazarian, 68, of Richmond Hill, Ont., also sought financing from the Royal Bank, which had been pressing for repairs.

Pressure mounted after the bank said his mortgage was in technical default because financial statements were late in coming.

"That was a terrible situation," Nazarian said. "They were virtually taking over the mall."

Earlier in the day, Nazarian admitted ignoring for years orders to replace fireproofing in the building. He said that was because the leaking had to be fixed first because otherwise the water would wash away the new material.

He continues for a third day of testimony on Thursday.