Rebel resurrects battle over noise on Toronto’s waterfront

A lawyer for the Polson Pier venue's owners says reports of a 15,000-capacity megaclub are exaggerated, but Rebel's new liquor licence application still has neighbours fuming


Nightclub king Charles Khabouth aimed to please concert fans by renovating the old Sound Academy venue at 11 Polson, giving it a new look, a new sound system and a new name, Rebel.

Now he wants a new liquor licence, and the neighbours aren’t happy.

On Thursday (February 9), a round of hearings begins at the provincial License Appeal Tribunal that will pit Khabouth and his business partners against the city, waterfront and Toronto Islands residents, and the Alcohol and Gaming Commission of Ontario in what is shaping up as a contentious dispute over noise.

It’s a familiar situation. Between 1996 and 2006, residents of Toronto Islands made so many noise complaints about 11 Polson that the 10,000-capacity club and concert venue had its liquor licence revoked. When its next owners, Polson Pier Entertainment Inc. (PPEI), applied for a new licence in 2007, they negotiated with the city and islanders, agreeing to add 15 conditions limiting noise levels and outdoor events, among other things. The licence was approved in 2008 with the conditions and a capacity of 6,273 people – 3,763 indoors and 2,510 outdoors.

The current application has disrupted years of mostly peaceful coexistence between the club and ­surrounding residents.

Ahead of the hearings, NOW spoke to the parties involved to break down the issues.

Who owns Rebel?

The club at 11 Polson has gone through a few ownership changes over the past two decades.

After former Docks owner Jeremy Sprackman lost his liquor licence, Polson Pier Entertainment, led by controlling shareholder (and Docks former general manager) Tony Grossi, took over. According to court documents, in 2011 PPEI applied for a partial transfer of the liquor licence for the venue, then known as Sound Academy, citing a change in ownership. But before the paperwork was finalized, a newly formed company called Maya Corp. ­applied for the transfer.

Khabouth owns 42.5 per cent of Maya, while Khabouth’s INK business partner, Daniel Soberano, and a group controlled by PPEI each own 25 per cent, and Ralph Soberano 7.5 per cent.

In 2014, PPEI applied to remove the conditions, but the AGCO, which gives out liquor licences, refused. The licence was transferred (with conditions) to Maya, but PPEI appealed the decision, and the city and islanders began prepping for a seven-day hearing that was to begin in March 2015.

However, before that could happen, venture capitalist Michael Kimel entered the picture and started a new company with Khabouth and others called Powerhouse. Two days before the hearing was to begin, Maya withdrew its appeal “without any explanation.” Powerhouse then filed a new application that listed a maximum capacity of 15,519 people.

At the end of 2015, Khabouth began  a reported $10-million reno of Sound Academy and the adjoining outdoor Cabana Pool Bar. After 10 months, the complex reopened under the name Rebel.

Why has Powerhouse applied for 15,519 capacity?

Although the media has reported that Khabouth plans to build the largest nightclub in the world, Powerhouse’s lawyer, Richard Kulis, calls those claims “incorrect.”

He says the capacities­ – 7,548 indoors and 7,971 outdoors – are proposed based on provincial fire code and building legislation, not his client’s desired numbers.

“We’re just advising, based on government calculations, what would be allowed in the premises,” he tells NOW. “Tell everybody in the world we are not looking for a 15,000-seat capacity. What we’re looking for is a sit-down with the people who are objecting to determine what they’d be comfortable with, and what’s economically viable for the licence applicant.”

He expects the ultimate number, if the licence is approved, to be around the current capacity, “plus or minus.”

However, city officials remain skeptical.

“They are applying for around 15,000,” city spokesperson Wynna Brown says. “Until the evidence is heard at the hearing, we have to ­assume that won’t change.”

Are there plans to do further renovations at 11 Polson?

“I don’t think there are any plans I know of going forward to do any ­changes to the place,” says Kulis.

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Tanja-Tiziana

Why are residents upset?

Resident associations feel broadsided by the new application and have scrambled to get objections and witness statements in on time. The neighbours are happy with the current licence and want to keep the status quo.

“Why change it?” says Ed Hore, co-chair of the York Quay Neighbourhood Association, a group involved in the hearings. “[The licence] seemed to, by and large, balance the interests of everybody at play, so why throw that long, painfully achieved settlement out the window?”

Residents see Khabouth as dragging them into an old fight that they thought was over, while effectively putting the onus on them to prove that the licence is not in the public interest. An amendment or transfer of the existing licence would have placed the onus on the club to justify changes to its conditions.

Lynn Robinson, chair of the Toronto Island Noise Committee (TINC), led the charge against the Docks and took part in the negotiations with PPEI. Both TINC and the Queen City Yacht Club are involved in the upcoming hearings.

She calls PPEI’s track record of running Sound Academy “perfect,” but is not a fan of Khabouth.

“This particular management has not done well,” she explains, adding that noise from parties at Cabana can be heard by residents on Ward’s Island.

“One of the conditions on that licence was that there were to be no outdoor musical events. Right there you can see there’s not a good fit with their conditions,” she says.

Her ideal solution? “No outdoor musical events.”

Is there a chance a new licence could be approved without conditions on outdoor events?

Kulis argues that some of the conditions – specifically those dealing with paid-duty police offers – are outdated, while others are redundant.

In 2014,  the AGCO advised the city that the province will no longer enforce many conditions attached to liquor licences. Kulis says noise is a city issue, not a provincial one. The city’s bylaw states that music is prohibited between 11 pm and 7 am, and to 9 am on Sundays and holidays.

“We don’t think this licence is going to be issued without conditions,” Kulis says, adding that his client’s message to the objectors is “come and talk with us” to work out conditions that “fit the present time frame rather than a situation that existed a decade or more ago.

“And let’s move on.”

Asked whether noise conditions attached to liquor licences fall under provincial or municipal enforcement, city spokesperson Brown cites the section of the Liquor Licence Act that does not permit noise from outdoor entertainment venues that disturbs nearby residents.

“Outdoor noise is not just a municipal bylaw issue,” she says.

What is the AGCO’s position?

The AGCO declined to comment on Powerhouse’s application because of the upcoming License Appeal Tribunal hearings.

“It would not be appropriate for the AGCO to offer any additional comments,” spokesperson Ray Kahnert says.

However, he says the AGCO does in fact enforce conditions on a liquor licence that fall within its mandate under the Liquor Licence Act.

“Over the past few years, we have built strong alliances with our municipal enforcement partners – police, city and bylaw officers,” he says. “The AGCO continues to work with these partners and authorities, in order to address matters of mutual concern regarding the operation of liquor licensed establishments.”

What happens if Powerhouse’s application is rejected?

Rebel and Cabana will likely operate as usual.

The registrar for the AGCO already rejected Powerhouse’s application once, insisting that the company did not follow procedure by applying for a new licence rather than a transfer the old one.

Powerhouse appealed to divisional court and won. In a January 2016 decision, Superior Court Justice Laurence Pattillo noted the registrar’s assertion that by applying for a new licence, Powerhouse is shielded from the two-year prohibition that follows refused or revoked applications. Since Maya is the current licence holder, it can continue to operate Rebel and Cabana if Powerhouse’s new application is denied.

And although the judge agreed with the AGCO’s claim that Powerhouse, Maya and PPEI are proceeding in a manner “contrary to the public interest,” the ruling states that the registrar did not have the authority to refuse the application outright.

kevinr@nowtoronto.com | @kevinritchie

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