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Globe & Mail May 17 2000, Wed. - by John Barber ORC 'practice' broke its own rules It's in our interest to make sure the Ontario Realty Corp. conducts its business in an open, fair and transparent manner to ensure that taxpayers get full value." That's what Management Board Chairman Chris Hodgson said in the legislature on Monday. So why has the ORC conducted its business in a closed, unfair and opaque manner, ensuring the taxpayers get ripped off again and again? That question has been made pressing by the latest irregular deal brought to light, in which Cadillac dealer Clarke Addison was able to buy a prime Bay Street development site for less than one-third of the price of comparable properties on the same street. Mr. Hodgson's defence of that deal speaks volumes about his professed commitment to fairness and openness -- not to mention his relative degree of respect for your pocketbook. The ORC has admitted that it made no effort to market the property and deliberately did not invite any other buyers to submit bids. It did so, according to spokeswoman Judith Baird, as a gesture of good will toward its long-term tenant. The dealership has been in the family for generations, it's a historical landmark, et cetera. Who could complain? There might well be no complaint if one accepts the spin, repeatedly offered by both the ORC and Mr. Hodgson, that the government sold one property in a single transaction for a consideration of $6.5-million. But it didn't. Land records show clearly that Addison Properties Ltd. and the Ontario government completed two separate deals. Addison bought its dealership for $4.5-million. It bought the empty lot across the street -- one that will surely not be wasted on used cars much longer -- for $2-million. The lot sold for $8 per "buildable" square foot, that measure referring to the total size of building that the lot's size and high-density zoning will permit. Other condominium sites in downtown Toronto sell for upwards of $30 per buildable square foot. On upper Bay Street, prices range as high as $44. Those prices are not guesstimates, by the way. They are as clearly established as the prices posted in large numbers above the gas pumps at your local Petro-Can. Just as bad, this discount deal flies in the face of ORC policies that specifically ban non-competitive sales and any sort of sweetheart deals for interested parties (including tenants). Mr. Hodgson has repeatedly attempted to deflect criticism of other ORC deals by drawing attention to the policies, which are clear, tough and fair. So how does he explain a deal that closed in January and flagrantly violates all his own rules regarding openness and competition? He does it by pointing out, in a bravura demonstration of political cowardice, that the regulations didn't come into effect until a few days after the Addison deal closed. What he doesn't point out is that the old policies contained exactly the same sanctions against non-competitive sales as the new policies that superseded them. The relevant clauses in both documents are identical, word for word. Maybe Mr. Hodgson doesn't know that, or maybe he's just hoping nobody will find out. But that hasn't stopped either him or his minions, who yesterday produced a "fact sheet" claiming that the Addison deal "was conducted in accordance with ORC practice in place at the time the transaction was consummated." This "practice," it continued, "dictated that surplus property be first offered to government ministries and then the existing tenant." I searched in vain for any mention of this practice in the Corporate Management Directive published in September, 1998, that dictated the procedures for selling government land prior to January, 2000. All I found was the language, referred to above, banning non-competitive sales to insiders. The document makes no mention of the special rights of tenants. So I asked the ORC to explain. It turns out that there is a big difference between a "practice" and a "policy" -- let alone anything so confining as a rule. It was ORC practice at the time, I was told, to violate its own clearly stated policies. I wonder why they didn't bother to make that subtle distinction in the "fact" sheet. Could it be that they are just spinning and squirming in a pathetic attempt to avoid responsibility for a rotten deal? Surely it is time for the defence to rest. Its exertions have become ugly.
[COMMENTS BY DON B. - ]
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