Decades-long saga could revive Docks-like space on Polson Pier
The city and Toronto Island residents are quietly fighting business owners who could turn the space into one of the largest nightclubs in the world.

thestar.com
By Jennifer Pagliaro
Jan. 30, 2017

It was torture to some, just business to others.

When a lengthy battle over noise violations more than a decade ago pulled the plug on the Docks entertainment complex and its booming bass on the edge of Polson Pier, it gave island residents some peace - and peace of mind.

Since then, the space has never ceased to be a nightclub. The venue has changed names, ownership has shifted hands, the liquor licence duly acquired. And the music has played on. While it mostly played indoors, it recently returned to an outdoor pool bar. Still, the peace has held.

Now, those running the event space off Cherry St. in Toronto’s Port Lands are making a much bigger play after submitting a new liquor licence application that would expand the complex’s capacity to more than 15,000 people - making it one of the biggest nightclubs in the world.

And, in a worrying sign for neighbours, this new application would reset the conditions that currently keep a damper on outdoor concerts, opening the door to a possible return to the problems from nearly 10 years ago.

Those involved with the space are tight-lipped about their future plans. But the request for a new liquor licence has pitted the venue’s operators, including nightclub tycoon Charles Khabouth, on one side, with the Alcohol and Gaming Commission of Ontario, the city of Toronto and Toronto Island residents on the other. Lawyers for the residents, city and commission have all argued - in court and tribunal hearings for the past year - that the venue operators are trying to circumvent the process.

“Now it looks like we’re going back to David versus Goliath again,” said Councillor Paula Fletcher, whose downtown ward (Toronto-Danforth) includes the pier site.

“It’s unfortunate that it’s being approached like this rather than sitting down with all the waterfront partners...and saying, ‘What’s going to work for everybody?’ That would be the Toronto way. So I think that’s why this has everyone fussed up.”

Corporate documents and court records show over the past decade, the group of people involved with the site has never strayed far from those who operated the Docks.

A lawyer for Khabouth and partners in a new company looking to remake the space, Powerhouse Corp., says their client doesn’t intend to operate at the requested capacity, and a final number remains up for discussion.

“The numbers only indicate the maximum allowed. Powerhouse has no plans to be the biggest entertainment venue in the world,” lawyer Richard Kulis said in an email when asked about boosting the club’s capacity to more than 15,000. “Powerhouse hopes to operate with capacities similar to the present operations at the site.”

But island residents and the city say the new group isn’t acting in good faith. The fight highlights a liquor licence system that puts the onus on residents to challenge new applications, and raises questions over acceptable noise and what it means to be a good neighbour.

What happens next hinges on a hearing at an appeals tribunal that starts Feb. 9. There the city and island residents are expected to fight the application, having argued a “pattern of conduct” by Powerhouse and the existing operator “to exhaust the objectors, financially, emotionally and otherwise by obliging them to attend again at a lengthy hearing.”

The waterside space at 11 Polson St. is currently home to the newly remodelled two-floor Rebel nightclub, in the space that was the Sound Academy concert hall. Outside is the pricey Cabana pool bar, where “sophisticated and casual chic beach attire” is required and private booths with bottle service can be secured for $1,000 in the summer.

Those spaces, under the existing liquor licence, currently have an allowed capacity of 3,763 people indoors and 2,510 outdoors.

The new liquor licence application, filed by Powerhouse Corp. in May 2015, seeks to increase that capacity to 7,548 people indoors and 7,971 people outdoors - more than triple the existing outdoor space.

Though the space would be split between indoors and outdoors, it would rival the current Guinness world record holder for largest nightclub, the 69,940-square-foot Privilege in Ibiza, Spain, which has a capacity of 10,000, according to the record-keeper’s website.

The Docks first obtained a liquor licence in 1996, hosting 10,000 on the patio space where outdoor concerts, including the annual Warped Tour, were common - much to the consternation of harbour residents.

Toronto Island Noise Committee Chair Lynn Robinson is seen near her home on Ward's Island with Polson Pier behind her. “The harbour’s like a bathtub and sound sloshes all around the harbour,” she says.

Current concerns over remaking the site stem largely from plans for the outdoor space, which island residents say is not well placed to host 8,000 people for concerts.

“The harbour’s like a bathtub and sound sloshes all around the harbour,” said Lynn Robinson, chair of the Toronto Island Noise Committee.

“It’s probably the most illogical place...because the sound, no matter what way they turn the speakers, it’s going to hit somebody and it bounces all across the water.”

It was noise complaints that finally drove the Alcohol and Gaming Commission to kill the Docks’ liquor licence in 2005. Polson Pier Entertainment Inc. took over the space in 2008 - granted a liquor licence with 15 strict conditions, including a ban on outdoor musical events - and reopened a better-insulated indoor space as the Sound Academy. Island residents saw it as a vast improvement.

“They were the best neighbours ever imaginable,” Robinson said. Their “torture,” as one resident described it, had ended.

Among the strict conditions was that the operator of the new liquor licence should “not be controlled in whole or in part or managed directly or indirectly” by a numbered company registered to Docks owner Jerome “Jerry” Sprackman, or Sprackman himself, “or any person who has or had an interest in the business formerly known as ‘The Docks by Cherry.’”

Court and tribunal documents outline shifting control of the space from 2008, with the creation of several new companies with ties to the original management of the Docks.

The land where the former Docks site sits is owned by a numbered company that is registered to Toronto lawyers Romeo Finder and Nicholas Macos.

Speaking to the Star, Finder said he is Sprackman’s lawyer but that Sprackman - who once pitched a $20,000 proposal for a massive casino resort in the Port Lands - has no involvement in the operations of the venue. Sprackman himself is named as a director of a different numbered company that owns the land next door.

Tony Grossi, who is the registered director for Polson Pier Entertainment and was formerly a director of the company Sprackman used to operate the Docks, was also the general manager of the Docks before reopening the space as the Sound Academy. Grossi could not be reached for comment.

According to court records, Polson Pier Entertainment applied for a partial transfer of the liquor licence in 2011. Before that transfer was finalized, a newly formed company named Maya Corp. instead applied for a transfer of the licence.

Records show Maya, in May 2012, was directed by Khabouth and his business partner in INK Entertainment, Danny Soberano. According to court documents, Maya was owned 42.5 per cent by Khabouth, 25 per cent by a group controlled by Grossi’s Polson Pier Entertainment, 25 per cent by Soberano and 7.5 per cent by a Ralph Soberano.

Before the licence could actually be transferred, in 2014, Polson Pier Entertainment tried to get the 15 strict conditions on the licence removed, which the Alcohol and Gaming Commission refused. Polson Pier Entertainment appealed and a hearing date was set.

But before that dispute could be heard, another proposed change in ownership was put forward. A Michael Kimel, according to the court records, said he had an understanding to become a part owner of a new business called Powerhouse Corp., on the condition the space would be renovated and the capacity expanded. Kimel could not be reached for comment.

But “without any explanation,” court records say, the bid to have the conditions on the existing liquor licence removed were withdrawn.

Less than two weeks later, Powerhouse came forward to apply for a new licence.

Powerhouse, according to the company’s lawyer Kulis, is partly owned by Khabouth and three other corporate parties with numerous partners he refused to name. Khabouth is the only named director registered to the company.

Kulis - who previously represented the Alcohol and Gaming Commission in the future of the Docks site - was coy about plans for the space.

“The dream for the future site is to be a positive component of the Toronto Music City initiative promoted by the City of Toronto and be an entertainment facility catering to both the residents of the Toronto and tourists to the area,” he wrote, adding Powerhouse “will probably have plans for a redesign or redevelop in the future in a manner that is respectful of the area residents and attractive to its future client base.”

“Should Powerhouse be granted a liquor licence, my client intends to operate within the parameters of the City of Toronto’s noise bylaws, as the bylaws would exist at that time.”

The current bylaw prohibits the playing of music between 11 p.m. and 7 a.m., and to 9 a.m. on Sundays and holidays.

Kulis said while some members of Powerhouse overlap with Maya, there are new owners involved as well. “All of these members have the unique business experience to operate large venues.”

The registrar for the Alcohol and Gaming Commission argued Powerhouse did not follow proper procedure when it applied for a new licence and refused to process their application.

Powerhouse appealed to Divisional Court, and Superior Court Justice Laurence Pattillo wrote in a January 2016 decision that while he did not disagree the company’s actions were “contrary to the public interest,” the registrar had “no authority to refuse to issue the licence outright.”

With both the city and the island residents committee now objecting to the application, it will be heard by the Licence Appeal Tribunal, a provincially appointed, quasi-judicial body that deals with licence disputes.