Asleep at the Deal

City council gives mel's friends keys to Union Station


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Too bad councillor David Miller was away on a pre-booked summer vacation last week when council appointed a local consortium known as Union Pearson Group Inc. to undertake redevelopment of the historic city-owned Union Station. We could have used him. Back when the MFP Financial Services scandal hit the headlines late last year, Toronto councillors were aghast that a computer leasing contract budgeted for $43 million had rocketed into the $100-million stratosphere without their knowledge or approval.

They voted overwhelmingly in favour of a judicial inquiry into a fiscal affair that set the city auditor off to uncover a multitude of other questionable spending practices.

“It’s incumbent upon the city to make sure this kind of thing can’t happen and doesn’t happen again,” Miller declared back then.

This time council seems intent on walking into political quicksand with eyes wide open.

The deal is shrouded in so much secrecy that nobody is prepared to come right out and say what it’s all worth to the winning applicant — although Mayor Mel Lastman certainly gave it a spirited try.

“This is phenomenal. This is unbelievable,” Lastman enthused after UP Group was awarded the contract by a 34-2 vote.

“Who ever did this in Toronto before?” he asked boastfully. “They were used to spending money in the old city. Where did you ever hear of somebody getting somebody to put $300 million into a city project? And then we’re going to own it.”

It would be nice if we could see all of that in writing somewhere. But no such luck.

“When you’re talking about land deals, when you’re talking about city property, you can’t (do it in the open),” the mayor said. When pressed to explain why not, he replied, “I don’t know. You’ll have to ask staff.”

How comforting.

Lastman blamed the media for causing the storm of controversy that continues to swirl around the project just because journalists (and, by extension, the taxpaying public) were kept completely in the dark.

“This was and is a sensational news story, let me tell you, and it was squeaky clean,” he said. “But when you guys don’t know something, you take shots. It’s the way the media is. I can’t help that.”

Never mind that the negotiations that concluded with Union Pearson Group getting the nod over LP Heritage, a U.S. consortium that specializes in train station restorations, were conducted behind closed doors. The secrecy continued long after that. The deal, which almost certainly has ramifications for the lucrative air rights above the tracks behind the station, was debated “in camera” by council’s administration committee.

And the mystery continued to build when the future of the most prized piece of real estate in the country was discussed at council. The only motions voted on in public related to things like keeping a place of prominence at the station for a sculpture donated by the Italian community and making sure cyclists have good access to the renovated rail terminal. And let us not forget the motion passed thanking staff for all their hard work during a two-year process that came to the conclusion many folks at City Hall had predicted when it first began.

“Staff handled it right from the beginning,” Lastman said. “There were no politicians involved, no nothing, and they handled it properly and they handled it right.”

Still, there are niggling questions about why the mayor participated in the debate and voted on the contract even though it was revealed in NOW that his lawyer son Dale is a long-time trusted adviser to Larry Tanenbaum, the sports and construction magnate whose investment holding company, Kilmer Van Nostrand Ltd., is a key player in the UP Group consortium.

Two years ago, Tanenbaum personally nominated Dale Lastman to represent that firm as a director on the board of Maple Leaf Sports and Entertainment Ltd. Kilmer Van Nostrand also has a 25 per cent share in the company that owns the Toronto Maple Leafs and the Toronto Raptors basketball franchise.

Councillor Rob Ford claimed, “This deal was done before it even started,” and insisted the mayor should have declared a conflict of interest on the station redevelopment because of his son’s close relationship with Tanenbaum and his business interests.

“That’s as blatant as the days are long,” said Ford, who joined councillor Michael Walker in voting against UP Group.

And then there was the matter of the “lobbying disclosure form” that the local consortium was required to provide the city clerk. The document listed nine individuals who had “communication” with councillors regarding the firm’s Union Station proposal.

Prominent among the lobbyists was Paul Godfrey, the Toronto Blue Jays CEO and former Metro chair, who is widely considered the master puppeteer pulling Lastman’s political strings. Tanenbaum was also on the list, with long-time Liberal bagman David Smith, national Grit party president Stephen LeDrew and former federal Tory president Peter Van Loan.

These guys left few council rocks unturned in their quest for support. According to the disclosure form, 30 councillors — including Lastman and deputy mayor Case Ootes — were personally approached. And contact was made with another four councillors through their office staff. Alan Slobodsky, the mayor’s chief-of-staff, was also on the list of officials lobbied.

So much for Lastman’s claim that “there were no politicians involved.”

There were also questions about the $300 million the mayor said UP Group plans to sink into redevelopment of a train station the city finally took full ownership of just two years ago. According to Doug Holyday, chair of council’s administration committee, the real value of renovation and restoration is only $83 million. Other reliable sources say the project’s value only grows into the $300-million range if UP Group is one day allowed to utilize the coveted air rights to build high-rise towers behind Union Station.

Those air rights aren’t supposed to be part of the secret deal. Not for the moment anyway. And the contract’s “confidentiality requirements” prevent anyone from discussing the matter further at this time.

“Hopefully, one day everything will come out,” Ford fumed after his colleagues had privately approved the pact. “If it doesn’t, I feel sorry for the taxpayers.”

So should we all, councillor. So should we all.

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