The City of Vaughan won’t say why it returned $11 million earmarked for parks to the developer

Canadatoday.news
Sept. 30, 2022
Eden Thomson

The city of Vaughan refuses to say why it quietly refunded a developer more than $11 million despite fighting in court to keep the money for taxpayers and public parks.

Royal 7 Developments paid the Toronto suburb $11 million as a condition for approval of its Expo City condominium project. It also gave the city an adjacent lot to be converted into a city park.

Vaughan, like some other Ontario cities, requires developers to provide land, cash, or both as a condition of approving new developments. Royal 7 paid the $11 million in lieu of a larger property.

But the city council returned the money in 2018 and also agreed to let Royal 7 build a parking garage under that property, according to documents unearthed by local activist Richard Lorello.

“It’s really disappointing that the city isn’t revealing why they returned this money when it clearly could have been used for parks and recreation centers,” Lorello said.

“If it was such a good deal, why can’t we know the terms of the deal?”

Lorello discovered the $11 million refund in hundreds of pages of documents he received through a freedom of information request about the Expo City project.

Four of its five residential towers on Highway 7 near Highway 400 were built. The fifth and the underground car park are under construction.

Royal 7 is a subsidiary of the Cortel Group company of the well-known developer Mario Cortellucci.

Lorello has been trying to figure out what benefit, if any, the city has in returning those millions and allowing Royal 7 to build the garage beneath the intended parkland.

He says the city shouldn’t be able to write off millions that could have flowed into parks without explaining to the public what they got in return.

“It can’t stop there,” he said. “If that were okay, we could do everything like this, right? We could approve things in public council meetings and then go into closed meetings and basically undo everything without the public knowing.”

Paid under protest
Royal 7 paid the $11 million amid protests, arguing Vaughan was not authorized to ask for it because the requirement differed from a previous Ontario Municipal Board (OMB) decision on a proposed development on the same property.

In that decision, the OMB ruled that the city would only receive parkland from the previous owner as a condition of development. Royal 7 took his $11 million fight to the Ontario Supreme Court.

The city hired an outside law firm, who argued that it was entitled to both the parkland and the compensation payment.

“Royal 7 seeks to rely on a technical and narrow interpretation of the Planning Act to evade its obligations and thereby secure a windfall at taxpayers’ expense,” reads a court filing. “That is not allowed.”

Judge Robert Charney dismissed the case in January 2018, ruling that it was more appropriate for the OMB to hear it.

But the case never made it there because Vaughan City Council, in a closed session in September, approved a settlement that would see the city refund the money and Royal 7 drop its case.

Lorello is still struggling to see the City Council Minutes through an objection to his request for information.

The city says it will finalize its confidential agreement with Royal 7 an appeal satisfying the cash in lieu of parkland, including the dedication of parkland.’ (Patrick Morrell/CBC)

As his own “sanitary check,” he hired David Donnelly, an environmental and local government attorney, to review the documents he received.

“I’ve never seen a situation where a community gave up the right to collect land and cash instead,” Donnelly said. “There’s a long line of instances where it’s been said you can have both parkland -- actually donated physical land -- and cash. That was the case [OMB] position for years.”

CBC Toronto asked the city why it agreed to refund the money.

In a statement, the city said it had reached a confidential agreement with Royal 7 to “settle an appeal satisfying the cash in lieu of Parkland, including the dedication of Parkland.”

Work on the park above the garage is being coordinated with other work related to the fifth residential tower, and landscaping is expected to be completed by the end of the year, the city said.

The park will include “recreational facilities such as a nature playground, an ice rink, a splash guard and a pavilion” for public and private events, it said.

A lawyer for Royal 7 says his client paid all the necessary fees for the development.

“My client is providing a Strata Park…and delivering a four-story underground public parking lot for use by the city as part of the settlement,” said Attorney Quinto Annibale.

In an email to Lorello reviewed by CBC Toronto, city officials said the garage includes public, commercial and residential visitor parking for three of the Expo City towers. The city also said the developer will own the garage while it owns the park.

In his report to Lorello, Donnelly concludes that if the city refuses to provide more information about the settlement, his client should report the council’s decision to the Ontario Provincial Police for further investigation.

“Why did you give away the money? There doesn’t seem to be a logical explanation,” Donnelly said.

“If there are documents or we don’t have something that would explain the situation, then the police can very easily get to the bottom of it and the file will be opened and closed.”