VAUGHAN CITIZEN EXCLUSIVE: Future hospital at standstill until developer-led dispute settled

Yorkregion.com
May 13, 2014
By Adam Martin-Robbins

The city is celebrating a 99-year lease deal with Mackenzie Health to provide up to 50 acres of land for the future Vaughan hospital, The Vaughan Citizen has learned.

But before the agreement comes into effect so the project can proceed, the city has to resolve an ongoing dispute with the Vaughan Health Campus of Care (VHCC) over its right to have a say in what happens on the 82 acres at the corner of Jane Street and Major Mackenzie Drive.

The lease deal, which is for the nominal amount of $2, was locked down in late April following about a year and a half of discussions.

It provides the hospital corporation with 40 acres of land plus an additional 10 acres for potential expansion.

The agreement also gives Mackenzie Health a say in what happens on an additional 12 acres in order to ensure no “competing uses” are placed next to the hospital, such as paid parking lots.

The city is touting the lease deal in a two-page ad to be published in local newspapers Thursday, including The Vaughan Citizen.

And in an interview Wednesday, Mayor Maurizio Bevilacqua called it “a very important announcement”.

“This really marks the beginning of a relationship between the city and Mackenzie Health to provide a world-class hospital to the citizens,” he said.

But Mackenzie Health president and CEO Altaf Stationwala says while it’s a “positive step”, the existing agreement with the VHCC is preventing the hospital from moving ahead with the process to choose the consortium that will design, build, finance and maintain the Mackenzie Vaughan Hospital.

“I think it’s a very significant achievement that the hospital and the city have agreed to the terms under which land will be conveyed,” he said. “But it also has a condition in it that deals with the legacy issues with the VHCC. Until that condition is removed by the city, in effect, the ground lease isn’t active yet. So, we’ve agreed to the terms. Now, the city has to resolve that condition and, until they do, the lease isn’t active and we’re not able to proceed with the project.”

The VHCC is headed up by prominent local developer Michael DeGasperis, who could not be reached for comment by press time Wednesday.

DeGasperis’s group spearheaded the initial effort to bring a hospital to Vaughan and helped broker the original land deal in 2009 with Cedar Fair, owner of Canada’s Wonderland.

At that time, the city agreed to pay $60 million to purchase the 82-acre property, north of the amusement park.

It also committed another $20 million to help develop the land into a state-of-the-art, health-care campus, complete with a full-service hospital and ancillary health care services such as a long-term care facility, laboratories and some type of medical research or education facility.

That money is being paid back through a special levy on Vaughan taxpayers which is expected to last until 2022.

As part of the original land deal, the VHCC was to oversee development of the hospital and the ancillary services.

But in 2011, the province handed the hospital project over to what was then called York Central Hospital, now known as Mackenzie Health.

That left the VHCC to focus on developing “hospital-related” uses on the remaining lands.

Then, the city squeezed the non-profit group out of that role when it refused to hand over land the VHCC needed to realize its plans.

A bitter feud ensued with DeGasperis repeatedly challenging decisions by the city regarding the lands.

The VHCC also took out ads and local billboard postings slamming the provincial Liberal government for moving too slowly on the hospital project.

The lease deal with Mackenzie Health sets out a number of conditions that the city must meet in order for it to be legally binding. One of those conditions is that the VHCC contribution agreement is terminated either by “mutual agreement” of the organization and the city, or by the applicable courts declaring the contribution agreement null and void.

Asked about that, Bevilacqua said:

“That’s another discussion. The important part of this announcement is that we have come to an agreement of common established goals. And we’ve addressed all the issues that Mackenzie Health, the city and the province had and we put them all together in this 99-year lease that is obviously necessary for the hospital to be built.”

Stationwala said that despite all the challenges, he’s optimistic the hospital will remain on track to open in 2019.