THE DEMOCRATIC REPORTER
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Globe and Mail - Aug. 12, 2010 - By Adrian Morrow
Mayor McCallion’s adviser played
A close friend and adviser of Mississauga’s mayor played a key role in negotiating a settlement for a lawsuit brought by the mayor’s son, an inquiry probing a failed land deal heard Wednesday.
What's more, Peter McCallion's business partner originally asked for $10-million to end the litigation, testified David O'Brien, a former city manager who later became a confidant of Mayor Hazel McCallion.
Peter McCallion's company, World Class Developments, had wanted to build a hotel and convention centre on a piece of land in downtown Mississauga. The company signed a deal with the property's owners, pension fund OMERS, that required the construction of the hotel meet a certain time frame. When it became clear World Class could not complete the project on time, OMERS cancelled the deal.
Shortly afterwards, the city and the pension fund started a deal that would ultimately see the land used to build a campus of Sheridan College.
Mr. O'Brien, who also sits on OMERS's board of directors, testified that he first became involved in the messy aftermath of the deal in July 2009 when the mayor tasked him with finding out what her son's company wanted to walk away from the deal and let the city pursue its arrangement with Sheridan.
The former city manager said he met with Mr. McCallion and his business partner, Vaughan developer Tony DeCicco, over breakfast at the Sunset Grill in Mississauga. Mr. DeCicco maintained that he still had the right to develop the property and that he had a partner willing to run a four-star hotel on the site, Mr. O'Brien told the inquiry.
A few weeks later, after World Class sued OMERS in a last-ditch effort to hold onto the land, Mr. O'Brien was assigned to negotiate a deal by the pension fund's CEO.
In a meeting at the hotel bar of the Delta Meadowvale in the late afternoon of Sept. 10 last year, Mr. DeCicco initially asked for $10-million.
“I got up and decided to walk out, because I thought that this is not going to go anywhere very quickly. And I turned to him as I was walking out and said ‘Do you seriously want to negotiate?’ And he said ‘yes,’” he testified. After a couple of hours of talks, the meeting broke up without a resolution.
Later that evening, Mr. DeCicco called Mr. O'Brien and they agreed OMERS would pay World Class $4-million.
Despite his close relationship with the mayor, Mr. O'Brien denied feeling awkward about negotiating with Mr. McCallion's company, explaining that he was representing OMERS. He also testified that although the mayor's son was present at both the Sunset Grill and Delta Meadowvale meetings, he remained silent and let Mr. DeCicco do the talking.
Clifford Lax, the city's barrister, needled Mr. O'Brien during cross-examination about his contact with the mayor during the negotiations. While Mr. O'Brien admitted it was possible he kept Ms. McCallion up to speed on the tussle between World Class and OMERS, he said he was primarily negotiating between the two parties and not acting as the mayor's representative.
The inquiry also heard from Craig Coleman, president of 156 Square One, co-owner of the land with OMERS, who testified that he was concerned about the “optics” when he heard the Mr. McCallion was involved with World Class.
In response to his queries on Mr. McCallion's role, he was told by OMERS that the mayor had assured them in December 2008 that the younger McCallion was “off the file,” he testified. The assertion is puzzling, as Mr. McCallion remained involved with the company for months afterwards.
In late 2008, while Mr. DeCicco maintained that he could still deliver the hotel project and Ms. McCallion pressured OMERS to give him more time to do it, Mr. Coleman wasn't convinced, he testified.
“In December, the deal was kind of running its course and coming to an end, from our perspective. And WCD hadn't provided evidence, with respect to the hotel management agreement,” he said. Despite World Class's eleventh-hour deal with hotel manager Steve Gupta, OMERS and 156 pulled out of the deal with World Class in January 2009
The inquiry continues Monday.
Comments by others - 3 - to this web-page at time of posting;
8/12/2010 9:14:05 PM
Peter McCallion had a small carried interest in WCD: it wasn't "his company" as is implied by Adrian Morrow. McCallion was acting as a real estate agent, but testified that he had no commission deal with WCD. That's probably why the real owners of WCD (& the ones who put up the capital in WCD, or would have, if the deal had proceeded) threw Peter McCallion a small carried interest in WCD in lieu of brokerage fees and as recognition of his role as a realtor in the deal.
Plus, in the meetings with David O'Brien, O'Brien testified that Peter McCallion deferred to his senior owner of WCD, Tony DeCicco, as would be normal for a minority owner.
Of course Hazel was active in pushing this deal. That's what she did for lots of prospective development deals over 30 years as Mayor to help make Mississauga successful. No shrinking violet, Hazel.
She may well have ommitted to declare her conflict of interest at a few meetings with City people to whom she had previously declared the conflict. So if she was technically offside a few times, so be it.
But it wasn't a case of hiding her conflict, ie, the familial relationship with the WCD realtor. She certainly wasn't attempting to orchestrate the funnelling of buckets of cash his way.
The City doesn't even own the land. OMERS owns it. But obviously, a big hotel development would have generated lots of fees & property taxes to the City.
If anyone thinks Hazel was on the take, or trying to fund her son's assets at City expense, get the Canada Revenue Agency to do a net worth assessment on her & of Peter McCallion. You sure as hell won't find any hidden wealth or Swiss bank accounts in their portfolios.
The WCD settlement deal was between OMERS & WCD.
This whole witch hunt is the creature of former Liberal MP, now Mississauga Councillor Carolyn "Americans...I hate those bastards" Parrish, as she tries to climb over or through Hazel en route to the mayor's chair.
8/12/2010 4:07:12 PM
It is clear that Hazel mccallion does not understand or is wilfully blind to the concept of "Conflict of Interest".
Hazel mccallion should repay the city$million ofn this trail which has her guilty all over it.
8/12/2010 2:35:17 PM
I went up to the podium and asked "Where is David O'Brien?" Mayor McCallion said he didn't ask "nor was he invited" to a meeting that she claimed (quote):
"to give as much information as possible to the citizens because very little information has been given to them.”
Here's video of the real David O'Brien scoop.
Clearly that meeting was a meticulously orchestrated white-wash.
And to show just how incestuously "tight" the relationship between Hazel McCallion and OMERS Michael Nobrega is, check video that Mississaugans never got to see that January 22nd.
Testimony by Craig Coleman (AIMCo rep) merged with footage from that Enersource meeting.
So. WHO wanted the court file sealed? And the public NOT TO KNOW.
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