THE DEMOCRATIC REPORTER
Pages of Special Interest;
Other Table of Contents;
Scanned, recopied or Internet copy, if there are errors, please e-mail me with corrections:
Toronto Star - Aug. 9, 2010 - By Phinjo Gombu Urban Affairs Reporter
Hotel project wound through city hall
An application for a $1.5 billion hotel/convention centre project by a company part-owned by Mayor Hazel McCallion’s son proceeded through the approvals process at Mississauga City Hall despite not paying more than $220,000 in required fees, the city inquiry was told Monday.
The unpaid fees would have been the first installment on half a million dollars normally required to have the site-plan application circulate through various city departments for needed approvals.
Had the project gone through, the inquiry heard, the approvals, among several required by the city, could have quadrupled the value of the land being purchased from the OMERS pension fund by World Class Developments, to almost $50 million.
The inquiry is probing Hazel McCallion’s behind-the-scenes role in the failed deal, amid allegations that it represents a conflict of interest.
Testimony about the potential windfall from the sale of the land, even if the project was never built, came from respected development consultant N Barry Lyon and his firm, which was hired by World Class Developments to help bring the plan to fruition.
“It was a major source of tension with the city,” Scott Walker said of the unpaid fees. Walker, who works for Lyon, said that at one point city officials had threatened to halt the process if the fees weren’t paid.
Asked by commission counsel William McDowell if the application process was allowed to proceed anyway, Walker said: “I believe (the plans) did circulate, notwithstanding the fees were not paid.”
Walker said his repeated calls to World Class, asking if the company was ever going to cough up the fees, went unanswered.
The request for an explanation from Lyon’s firm, which later parted ways with World Class, came as the company was giving written assurances to the city that the fees would be paid “in the near future.”
A key approval that would have increased the land’s value, Lyon told the inquiry, was lifting the “H” designation, a restriction imposed on a property to ensure the city gets what it wants built there — in this case a major hotel.
Lyon said he was told by Murray Cook, an initial partner in World Class Developments who hired him, that Peter McCallion was someone who “wanted to learn the development business.”
“I didn’t have a clear understanding as to his (Peter’s) role,” Lyon said.
But Walker said that, as far as he was concerned, the younger McCallion’s involvement was that of an owner: He participated in many meetings and asked to be copied on all correspondence.
The question of ownership is significant because McCallion testified earlier in the inquiry that he had long believed himself to be simply an agent who would make money selling more than 2,000 condo units associated with the project. He said he didn’t realize he was an owner of the company that his mother had championed to build a convention centre.
The mayor’s lawyer has asserted that she wasn’t aware of the extent of Peter McCallion’s personal financial stake in the company and that he had misled her about it, although she was the signing witness to a trust agreement finalized at a Toronto restaurant in 2007 that effectively made him a partial owner.
Walker suggested during his testimony Monday that he felt uncomfortable about the optics of Peter McCallion being involved in a meeting with city staff about the project.
He wasn’t the first inquiry witness to do so: Michael Dal Ballo, of the Alberta Investment Management Corp., a partner of OMERS in the failed land sale, said he would have nixed the deal earlier had he known about Peter McCallion’s personal stake in the company, “because the potential of the perception of conflicts would have been pretty apparent to us.”
The issue: What was Mayor Hazel McCallion’s connection to a $14.4 million land deal involving her son, Peter?
What’s new: City fees required for an application for a $1.5 billion hotel, convention centre and condominium project by a company part-owned by Peter were not paid. But the application still went ahead at city hall.
What’s next: City lawyer Mary Ellen Bench and Ed Sajecki, city commissioner of planning and building, will testify.
Comments by others - 0 - to this web-page at time of posting;
[COMMENTS BY DON B. - ]
Your Financial Donations are Greatly Appreciated