Councillor Giorgio Mammoliti ‘not worried’ about OPP investigation into Toronto land deal
The Toronto councillor says the police investigation is “old news” and that police haven’t contacted him.
May 3, 2018
Councillor Giorgio Mammoliti is associated with an ongoing police investigation into a cancelled land deal in his ward, the Star has learned.
A source with knowledge of the investigation confirmed the veteran councillor is on the OPP’s radar in the early stages of a probe into a proposed land sale. The deal was cancelled after the city’s auditor general was alerted by whistleblower Councillor John Filion to concerns that the price had been exaggerated and proper due diligence had not been done.
Mammoliti, reached by the Star on Thursday called being linked to the investigation “old news.”
“I’m not worried about it,” he said by phone, adding he hasn’t been contacted by police.
A secret report written by external investigators Torys LLP that was provided to council last week and obtained by the Star on Wednesday said Mammoliti played a “central role” in advocating for the land deal that auditor general Beverly Romeo-Beehler found would have seen the Toronto Parking Authority, a city agency responsible for public assets, overpay by $2.63 million. Last month, two top parking authority executives were fired.
The secret, 39-page Torys report prepared by a team that included former Supreme Court judge Frank Iacobucci at the request of city council contains “factual findings” on the deal and the parking authority’s involvement.
The Torys report said Mammoliti threatened a senior city staffer to include a recommendation from staff that council should authorize the parking authority to purchase the land as part of a longer list of public realm improvements planned around the proposed Finch West LRT. The councillor denies he threatened staff as described in the report.
The controversy concerns a five-acre (two-hectare) parcel of land at Finch Ave. and Arrow Rd. near Hwy. 400. It’s owned by Katpa Holdings Inc., public records show, which is solely registered to real estate broker Frank De Luca.
Mammoliti has long been involved with that piece of land.
In 2009, De Luca applied to install a large digital billboard on the plot -- a lucrative investment that now generates a licence revenue of $100,000 a year, Torys reported. Though city staff recommended against allowing the sign, it was approved by Etobicoke York community council at the urging of Mammoliti, recordings of the community council meeting show.
At the same time, Mammoliti introduced a plan to build a giant flagpole on that site, part of a larger “gateway” project for the area that included a skating rink and other features advanced by the local Emery Village BIA in the largely industrial area. Mammoliti asked city staff to look at the feasibility of using the Arrow Rd. site for the project. But the project was later dropped when city staff determined the price quoted by De Luca for the land was “not realistic,” city staff emails earlier obtained by the Star show.
The plans were picked up again when Mammoliti and the BIA, through consultant Paul Sutherland, a former North York councillor, began lobbying the parking authority to purchase the land, according to the Torys report.
The report said Mammoliti, who was then a member of the parking authority board, approached then parking authority president Lorne Persiko at a conference they were attending in Las Vegas in June 2015 about the Arrow Rd. land and asked him to attend an on-site visit.
That meeting the following month included only some board members, a “not typical” gathering for which there was no clear explanation, Torys found.
The Torys report also outlines repeated efforts by Filion, who was also a member of the board, to get more information about the deal they were being asked to sign off on in 2016: a conditional agreement of purchase and sale for $12 million.
According to the report, that price was not supported by any documentation investigators could find. The board was never provided with a business case for parking needs in the area. And they were not shown an appraisal produced eight months earlier that valued the land at $7.5 million.
Marie Casista, vice-president of real estate and development for the authority, worked with the help of consultant Blair Murdoch to assign a value for the digital sign approved on the site in 2009. Several different calculations, which Torys found Casista at times did herself, put the value in the range of $4 million -- enough to close the gap between the land value and the $12 million price that had already been agreed to.
Despite her concerns about the quality of those calculations, Torys reported, Casista told Filion in a September 2016 meeting the deal was “firm” and that a $4 million value for the sign meant the $12-million price represented fair market value.
Filion, concerned the sign value had been exaggerated and still without supporting documentation for the deal, told Casista: “I’m calling the cops,” according to the Torys report. He later went to the auditor general, who after a 10-month investigation, referred the matter to police.
On April 4, both Persiko and Casista were fired by the city after the Torys report was provided to an interim parking authority board overseen by senior city staff, according to a confidential decision attached to the Torys report. Neither Persiko nor Casista could be reached for comment by the Star.
Earlier this week, Mammoliti signed up to run for re-election in his ward.