Brampton council hears staff let developer off the hook - to the tune of $1.4 million

Dominus owed $2 million in late penalties on highly controversial project but city agreed to take just $520,000, councillors were told Wednesday.

Thestar.com
April 15, 2015
By San Grewal

Brampton councillors want to know why staff recommended excusing $1.4 million in penalties that a developer was supposed to pay after a controversial downtown project fell more than a year behind schedule.

It was one of many questions two members of council peppered staff with Wednesday after the release of a report that raises even more concerns about a controversial $500-million downtown project that has had more twists and turns than a soap-opera plot.

“It looks like we have settled for $520,000 when in actual fact the penalty should have been closer to $2 million,” Councillor Elaine Moore stated, questioning staff about the reduced amount charged to builder Dominus Construction after a city hall expansion was delayed by more than a year. The building was supposed to be substantially completed at the end of January, 2014. But that goal wasn’t reached until mid-February of this year, and according to the report it won’t be done until sometime this fall.

The report states the original agreement in 2011 with Dominus was a penalty of $5,000 a day, and the project fell 377 days behind. But instead of paying the city the full amount, just under $2 million, a new agreement was drawn up last year (which was signed by former mayor Susan Fennell, but not shown to council). The new agreement allows Dominus to pay just $520,000, Moore outlined, reading from the report.

Staff said it would have cost too much in legal fees to go after Dominus for the full amount, as the company could claim things such as bad weather caused the delay.

Staff also said that a long-anticipated auditor-general’s review, investigating allegations of staff misconduct in the project, will hopefully answer some of the questions raised from the report Wednesday. That investigation by lawyer George Rust-D’Eye was supposed to have been completed in December, but has been delayed three times, while the cost for his work has at least tripled from the $50-$60,000 council was told it would cost in September.

The council-ordered investigation was prompted by the release of damning court documents last summer in a $28.5-million lawsuit against the city by another developer who alleges he was disqualified from the project’s bidding because staff and Fennell were biased in favour of Dominus.

The court documents include evidence that Brampton staff used city funds to pay a $480,000 option on a piece of land for Dominus, without ever informing council.