Toronto

Toronto's auditor general slams scuttled land deal, but will council make changes?

A "hairball." That’s how Toronto’s auditor general describes the connections at the heart of a scuttled land deal that could have cost taxpayers millions.

Toronto Parking Authority nearly paid $2.5M more than it needed to for land, report finds

The Toronto Parking Authority nearly paid about $2.5 million more than it needed to to purchase this piece of land near Finch Avenue West and Highway 400, the auditor general reports. (Google)

A "hairball."

That's how Toronto's auditor general describes the connections at the heart of a scuttled land deal that, had it gone through, would have seen the city's parking authority pay some $2.5 million more than it should have for a piece of land near Finch Avenue West and Highway 400.

Toronto Parking Authority (TPA) officials previously said due diligence would have been done before finalizing the purchase, but Auditor General Beverly Romeo-Beehler told councillors Wednesday she disagrees.

The concern we have is that there are all these relationships involved. That hurts public confidence.- Coun. Stephen Holyday

"I felt that this deal would have gone through," she said, adding her initial findings were met with resistance.

"The board at the point in time … I found to be more concerned with trying to pursue the deal rather than saying. 'Wait a second here, we're over by $2.63 million,' so that was a concern for me."

Romeo-Beehler's report found the TPA didn't get an independent business valuation and instead relied on advice from a sign expert and lobbyist to set the purchase price. She said getting details about how the price was set was "extremely difficult," and at one point was told calculations had been done on the back of an envelope, and that envelope had been lost.

Romeo-Beehler says that raised alarm bells.

"You don't pull $12 million out of thin air," she said. 

Councillors also heard the auditor has "deep concerns" about the role of the lobbyist who was representing both the Emery Village Business Improvement Area (EVBIA) — the organization that wants to build the world's tallest flagpole at the site — and the sign consultant, and who also had connections with the person selling the land and the TPA itself. 

The lobbyist also has connections with Coun. Giorgio Mammoliti — a current member of the EVBIA who was sitting on the TPA board at the time. The York-West councillor has denied any wrongdoing and said he didn't pressure the TPA to finalize the deal.

Councillors mulling changes

Romeo-Beehler's review of the potential purchase was made public last week, and immediately drew concern from both councillors and the mayor.

But it remains unclear what city council will do about it. After receiving more confidential material late Wednesday, councillors voted to discuss the issue again at Thursday's meeting.

Coun. Josh Matlow wants the integrity commissioner to look into what happened, and suggested the police may need to be brought in as well.

Other councillors are suggesting making changes to the TPA's board.

Coun. Stephen Holyday told reporters it's a good thing the brakes were put on the deal, but the city needs to take a hard look at how so many people wound up influencing a multi-million dollar deal.

"The concern we have is that there are all these relationships involved," he said.

"That hurts public confidence."

Councillors had a number of questions for Romeo-Beehler, then voted to hold an in camera meeting to discuss the matter.

TPA had agreement to buy land, digital sign

The TPA signed a conditional deal to spend around $12 million for the land on Arrow Road in 2016, but never finalized the purchase. Romeo-Beehler found the land, and a digital sign standing on it, was worth closer to $9.5 million.

The plan was to have some 70 parking spots to serve the future Finch West LRT line, as well as some other public-realm improvements.

Romeo-Beehler began reviewing the purchase after Coun. John Filion, a current parking board member, warned her: "nothing in the file appeared to justify the purchase of the property for $12,100,000."

After the first part of her review, the deal was put off. 

About the Author

John Rieti is the senior producer of digital at CBC Toronto. Born and raised in Newfoundland, John has worked in CBC newsrooms across the country. In Toronto, he's covered everything from the Blue Jays to Toronto city hall. Outside of work, catch him cycling in search of the city's best coffee.