Brampton councillors allegedly misled on $500-million development deal
Brampton councillors allege they were misled when they voted on one of the biggest projects in the city’s history.

TheStar.com
Aug. 22, 2014
San Grewal

Brampton councillors allege they were misled when they voted on one of the biggest projects in the city’s history, after reading court documents in a $28.5 million lawsuit against the city.

Three councillors say that approval for a controversial $500 million development project — the expansion of Brampton’s city hall and related developments — was on the understanding that the winning developer, Dominus Construction, had paid for land that was not owned by the city. But in fact, the city paid $480,000 on an option for a parcel of property, according to court documents filed for the lawsuit.

The councillors say they did not know of the city’s role in the land purchase until this week, when they asked the city to provide them with stacks of court documents filed by Inzola Group, another developer. Inzola filed a lawsuit against the city after it was disqualified from the development, alleging it was unfairly removed from the process.

Now, the city stands to lose its $480,000 deposit if the land at the heart of the controversy isn’t purchased for $2 million by October, according to court documents filed in relation to the lawsuit.

“I feel sick to my stomach since reading the court documents,” Councillor John Sprovieri told the Star.

The city’s lawyer in the case, Steven Stieber, sent the Star an emailed response Thursday, saying he is unable to address specific questions about the case as it is still in the courts.

“I would be pleased to do so at a later date as the answers to these questions will make it clear to you and your readers the City’s action in respect of the First Choice lands … was totally proper.”

Stieber added: “The City looks forward to the trial of this action when the totality of the evidence respecting the SWQ (project) will be public.”

Dominus has said it followed all of the rules outlined by the city in its bid documents.

Brampton used a bidding process called “competitive dialogue” that had never been used before in Canada for the development project. This more secretive process removed council’s usual oversight function over procurements and largely kept councillors out of the selection process, which was controlled by a closed committee.

The process was designed to attract more accurate final bids and avoid cost overruns as companies would submit realistic quotes that would not be shared. In the end, only three companies bid on one of the largest projects in Brampton’s history. One of those was disqualified.

The court documents include April pre-hearing testimony by senior city staffer Julian Patteson. He was asked by Inzola’s lawyers about information given to councillors in 2011 when they voted to select Dominus Construction.

“What you were telling council was that Dominus had in fact secured those lands, correct?” Inzola’s lawyer asked Patteson, referring to a 2011 staff report to council that he co-authored.

“Yes,” responded Patteson, who was the city’s commissioner of buildings and property management during the bidding process.

In fact, the city, on behalf of Dominus, had to pay a $480,000 option to secure the lands, the testimony shows.

“The city council at this Aug. 10, 2011 meeting, city council wasn’t advised that the option payment for the First Choice lands was being made by the city, correct?,” the lawyer asks.

Patteson responds: “They weren’t advised that the city was funding it.”

“Up until today, council hasn’t been advised that the city funded the option payment?” Patteson is asked.

“That’s correct,” Patteson responds.

Councillors Sprovieri and Elaine Moore requested that Brampton staff provide them with the court documents after learning about them from the Star. Moore was shocked by what she read.

“There really are no words to express my disappointment and concern about being misled by the very staff we rely on to be honest and diligent in their work and recommendations to council,” she said.

“And we have to press for these documents to find out staff has secretly made a $480,000 payment to help the builder they selected, without even getting approval from council to use public funds.”

It was Moore, who staunchly opposed the Dominus bid because of its cost and the lack of transparency in the process, who asked staff during a council meeting before the final vote in 2011 whether Dominus had secured the land.

She was told by staff that it had.

“...on the phase 2 the respondent in the report has an option on the property,” Moore said at a council meeting on March 28, 2011.

Mo Lewis, who was city treasurer at the time, replied: “...the respondent has made a commitment to acquire property without the City involvement...”

Moore then said: “It says right in the report that the (sic) Dominus has an option on the property.”

“...They have an option on the property that is correct, I can tell you that,” Lewis replied.

Dominus was awarded the project by a vote of six councillors to five.

Sproveri, who voted for Dominus, said the information about the city’s involvement would have influenced his decision, had he known.

“If I knew that the city was going to have to secure the land because Dominus couldn’t, even though the city was not supposed to do that, that would have tipped my vote the other way.”

Inzola was disqualified from the bidding after it refused to sign a secrecy agreement that it alleges would have prevented it from ever sharing its bid publicly. The company filed the lawsuit, claiming its removal was unfair and that the city’s administration was biased against the company in favour of Dominus.

The city’s statement of defence denies the allegations and claims Inzola’s principal, John Cutruzzola, is part of a faction trying to use the court to harm the reputation of Mayor Susan Fennell and city staff.

It states Cutruzzola wishes “to remove the Mayor from office by tarring her reputation so that she may be replaced with someone more amenable to the Plaintiff’s style of doing business and able to reward the Plaintiff for its financial and political support.”

Fennell supported the Dominus bid, casting the final vote in the controversial 6-5 decision. Residents had tried to get more information on the Dominus bid, but were told by staff they could not see details under the terms of the rarely used procurement process.

The recently filed public court documents by Inzola include Patteson’s testimony.

A trial has not yet begun, but pre-trial testimony by Patteson was entered into the court record in a motion by Inzola to compel the city to produce more documents.

Dominus Construction no longer Brampton’s long-term partner

The City of Brampton has confirmed that Dominus Construction, which won the bid competition to expand City Hall and redevelop part of the city core, will no longer be the city’s long-term partner in the project.

Dominus recently sold its rights to the 25-year leasehold agreement for the property to Fengate LP, an investment management firm.

The Dominus deal with the city for Phase 1 of the three-phase project cost taxpayers $205 million over 25 years: $94 million for the construction cost and $111 million for the financing. The 25-year payment period begins at the project's completion.

Under the Dominus agreement, the city was to pay $8.2 million a year to the company for 25 years. But now Fengate is the new landlord for the lease term.