Council sells out Yorkville

BY JOHN SEWELL

The machinations of Toronto city council never cease to surprise. What would you make of an arrangement in which city council secretly advanced several million dollars to a development firm to allow it to purchase a property, then agreed to rezone that property contrary to long-standing local-planning policy -- and against the wishes of a large group of interested citizens -- without ever publicly admitting its investment?

That's what has happened with a large property in the heart of Yorkville, a property whose development has been in dispute for several decades. It's the former site of Mount Sinai Hospital, whose shell still stands on the north side of Yorkville, between Bay and Hazelton.

Yorkville has been designated by the city for about 15 years as an "area of special identity" to ensure that anything built has "a building height and massing designed to fit with adjacent developments and within the context of the Yorkville area." That is, new projects are supposed to fit in with existing three- and four-storey structures. But what developer Barclay-Grayson proposed was an 18-storey tower at the head of Bellair on one side of the former Mount Sinai Hospital, and an eight-storey building on the other. City planners reported favourably on the proposal. Toronto-East York community council happily gave its approval in February, despite considerable local objection, as did city council at its March session.

Councillor Kyle Rae (Ward 27, Toronto Centre-Rosedale) led the charge to get the development approved, confirming his growing reputation as someone neighbourhood groups have reason to fear. Of course, it's now common practice for council to use the new Official Plan to justify overriding local opposition and long-standing planning controls in order to plunk down large towers in unwilling neighbourhoods. Most everyone is aware council and city planners have lost much of their credibility when it comes to good planning. But what makes this development unusual is the city's hidden financial interest.

The proposal includes an arrangement with the City of Toronto Parking Authority to purchase 150 spaces in the completed development. (The authority, the board that runs the city's "Green P" lots, provides substantial revenue for the city.) Parking has been a problem in Yorkville since the attractive Cumberland Park, the one with the Georgian Bay rock at one end, replaced a parking authority lot. Lorne Persiko, who oversees development opportunities for the parking authority, says previous attempts to get parking spaces in several developments on the fringe of Yorkville were unsuccessful, as was an attempt to purchase the former Mount Sinai property.

That the parking authority wanted to get 150 spaces under its own control in this development was no secret. Rae notes it was mentioned in one of the early planning reports. But it is the arrangement used by the parking authority to achieve its goal that almost takes one's breath away.

In late 2001, secret negotiations were held between the developer and the city. Closed-door council sessions were held in November and December, 2001 to approve paying the developer a large sum of money in return for the 150 spaces and supporting agreements. Since the parking authority is not an entirely independent entity, the city contracts on its behalf on matters such as land. Accordingly, the deal was made very quietly, without public notice, and the deeds, mortgage and agreements were registered on title on January 31, 2002. Paragraph 2 of the mortgage between the developer and the city states: "The Toronto Parking Authority has agreed to advance and prepay the cost of the public parking garage and such funds shall be utilized by Barclay-Grayson to finance the purchase of the property." The payment was $4.25 million, toward a total purchase price of $17 million. Another $8.5 million was financed by a mortgage from the Bank of Montreal. The city agreed its critical payment would become a second mortgage, that is, the Bank of Montreal would have first claim to any money in case of default.

No member of the public or the community was told that the city's role was so crucial to this particular developer, and that if the city had not put up this $4.25 million, the developer would not have been able to buy the property and propose this project. No one was told that if the zoning was not approved the city's investment might be in doubt, and that the city as a corporate entity had a financial interest in the outcome of the development.

In fact, the planning report that appeared on Feb. 4 of this year -- a full year after the money had been paid -- states: "There are no financial implications resulting from the adopting of this report." Russell Crooks, the planner who wrote the report, did not return calls to explain this particular phrase.

Councillor Rae is on the board of the parking authority. He is also the local councillor and the person who took the most active lead in pushing this development through for approval in February and March. Asked recently about this matter, he said, "I wasn't aware the city was funding the money for this purpose. I was aware that there was a business arrangement. In any case, the parking authority is at arm's length from the city and it was not taxpayers' money that was used. It was from parking authority revenues."

But it is a big stretch to think that Rae, wearing all these hats, did not know that the city was putting up the money to allow the developer to buy the property and that a rezoning was critical to the city's investment. And if he didn't know, he should have.

And he should not have kept this information from the public. It has come to public attention purely by chance, after the approvals have been given. It may not be improper for the city to make a financial arrangement that permits a developer to buy a development property. But unless council is open about that interest, it looks as though one reason for giving approval to a project that offends good planning was because the council was trying to protect its secret and undisclosed investment.

That this is not good planning is obvious from the design policies it overrides, policies that were intended to protect Yorkville. Opposition to the development is expressed in a petition to city council signed in recent days by an extraordinary variety of noted Torontonians, including Nobel laureate John Polanyi, Jane Jacobs, Margaret Atwood, actors Gordon Pinsent and Charmion King, ballerina Veronica Tennant and many more. The financial shenanigans will only add to their existing concerns. These newly discovered details, known by city councillors for more than a year but carefully kept from public view, surely prejudice the bona fides of Rae and other councillors.

There is an opportunity at city council's mid-April meeting for councilors to reconsider the bylaw that would enable this development to proceed. The matter should be sent back to the community council, where there can be a fair and open debate about this sordid state of affairs.

John Sewell is a former mayor of Toronto.