Exclusive

Mammoliti, TPA execs 'actively' pushed land deal with inflated $12M price tag, secret report says

Coun. Giorgio Mammoliti and several executives from the Toronto Parking Authority pushed hard for a deal that would have seen the public overpay by about $2.6 million for a piece of land in the councillor's ward, says a secret report obtained by CBC Toronto.

Mammoliti calls report 'smear talk' but OPP now investigating at request of city

The Toronto Parking Authority nearly spent $2.6 million more than it needed to to purchase this piece of land near Finch Avenue West and Highway 400, the auditor general reports. (Google)

Coun. Giorgio Mammoliti and several executives from the Toronto Parking Authority (TPA) pushed hard for a deal that would have seen the public overpay by about $2.6 million for a piece of land in the councillor's ward, says a secret report obtained by CBC Toronto.

The 38-page report by law firm Torys LLP, which CBC Toronto received from a source at city hall, claims Mammoliti  "made direct express threats" to city staff, insisting a city agency should pick up the $12-million tab to buy the land at 1111 Arrow Rd. near Finch Avenue and Highway 400.

Mammoliti, who represents Ward 7, York West, wanted to build a massive flag pole on the land as a "gateway" to his ward, the report notes.

TPA board forced to step down

The report to council, which makes no recommendations, is being kept from the public, the authors note, because it concerns private personnel issues at city hall.

It helps untangle the complicated web of details surrounding Mammoliti, lobbyists and executives of the TPA — a city agency — who, the report says, appear to have had little or no justification for overpaying for the land.

​The TPA board was forced to step down last summer after the city's auditor general raised questions about the proposed land deal. The Ontario Provincial Police are investigating at the request of the city. 

An interim board then hired Torys LLP to look at the role TPA president Lorne Persiko and the agency's vice president of real estate, Maria Casista, played in the negotiations.

Toronto city councillor Giorgio Mammoliti refused to be interviewed by law firm investigating controversial land deal. (Christopher Katsarov/Canadian Press)

The law firm's report was completed in late March. Its findings led to the firing five weeks ago of the two executives, the report's introduction notes.

Mammoliti was on the board of the TPA when the agency struck the deal to buy the roughly 1.6-hectare parcel of land from KATPA Holdings and developer Frank De Luca.

The TPA had signed an agreement to pay $12.18 million, even though two appraisers advised the agency the land was worth about $7.5 to $8 million.

'No clear understanding or documentation'

A billboard on the site, which makes about $150 000 a year in revenue, raised the value to about $9.5 million, according to the report. But that was still $2.6 million less than the TPA had agreed to pay.

"There is no clear understanding or documentation that explains how the $12-million purchase price reflected in the TPA's" offer was reached, the report states. 

But it does allege a series of attempts by key players to inflate the value of the land to seemingly help justify the purchase price and efforts by the councillor to make sure the deal went through.

The law firm noted Mammoliti "appeared to be actively pushing" for the TPA to acquire the land. The lawfirm also claims Mammoliti threatened a senior staffer in the city's Major Capital Infrastructure Coordination Office who was writing a report on the deal.

The report alleges that Mammoliti "made direct and express threats ... that if the report did not provide the direction  regarding 1111 Arrow Rd., he would actively work against  all of the public realm improvements" along the Finch West LRT corridor. 

In essence, the report claims Mammoliti would actively try to deny his own constituents improvements to the area if the Arrow Road deal did not go through.

'The usual smear talk,' Mammoliti says

In an email to CBC Toronto Tuesday, Mammoliti dismissed the report's allegations.

"There is nothing new in the report. I have spoken on this issue many times," he wrote.

"It is nothing more than the usual smear talk before an election."

While the TPA signed the agreement to purchase the land, the Emery Village Business Improvement Area agreed to have the flagpole built.  Mammoliti has a connection to that group, as well. He helped found the EVBIA and sits on its board of directors.

No business plan

The TPA also had possible plans for the Arrow Road site. The report notes the agency defended the deal claiming it could make money by building a parking lot on the land next to the proposed Finch Avenue LRT.

However, the report states, there was "no formal business case nor any discussion in relation to parking, about potential plans, costs, revenues, or return on investment" by the TPA.

As the land acquisition came under increasing scrutiny, the report notes Casista and a billboard consultant tried to justify the inflated purchase price by suggesting a second, more lucrative digital billboard could be put on the land. The second billboard would overlook Highway 400.

The Emery Village Business Improvement Area has long wanted to put up the world's largest flagpole on this site as a gateway to the neighbourhood. (CBC)

However, the report claims both the consultant and Casista were aware both provincial and city regulations prohibit it.

While both Persiko and Casista agreed to be interviewed by investigators from Tory's LLP, others close to the situation didn't.

In fact, the report says investigators were hampered in their efforts to uncover more details as Mammoliti, TPA board chair Michael Tziretas, Emery Village BIA lobbyist Paul Sutherland and the TPA's sign consultant Blair Murdoch all refused to be interviewed.

'I'm calling the cops,' Filion said

The deal was just days from being completed when it finally fell through in large part due to pressure from Coun. John Filion — a member of the TPA board. Filion had repeatedly questioned the value of the purchase and accused TPA executives of withholding information.

"In 34 years as an elected official, this is the only time I have ever felt that the staff of the public body of which I am a member of (TPA) has attempted to stifle my efforts to obtain the information I need to conduct my responsibilities," Filion said.

The report notes Filion told Casista, "I'm calling the cops." Eventually, the city's auditor general stepped in to investigate..

For their part, both Persiko and Casista have maintained they would have eventually killed the deal, according to the report. Persiko blamed the auditor general's investigation for preventing TPA executives from completing their due diligence.

Persiko also claimed it was Casista who was responsible for negotiating the land deal.