Toronto Parking Authority nixes pricey land purchase, but councillors still concerned
City manager asked to probe the circumstances of the incident
The councillor who warned the city's auditor general that the Toronto Parking Authority was poised to spend more than $2.5 million above market value for a piece of land calls the incident "very disturbing."
The city manager will now take a closer look at what transpired and report back to councillors.
The TPA signed a conditional deal to spend around $12 million for the land on Arrow Road, near Finch Avenue W. and Highway 400 in 2016, but never finalized the purchase. The city's auditor general 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. The site is also where the Emery Village Business Improvement Area (EVBIA) hopes to build the world's largest flagpole.
Auditor General Beverly 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."
Romeo-Beehler's review found the TPA risked overspending by millions by relying on valuations provided by a lobbyist and a sign consultant, instead of independent business valuators. TPA officials maintain they had plans to do that.
At Tuesday's audit committee meeting, Filion said that while the deal didn't go through, he still has questions.
"I hope in time we get to the bottom of this," he said.
Fillion asked Romeo-Beehler if she thought the deal would have gone through if she hadn't intervened.
"Correct," she said.
Lobbyist at centre of deal
Romeo-Beehler's 76-page confidential report provides a detailed story of the scuttled deal, including the role played by a lobbyist hired by the local BIA in 2008 with the goal of getting the flagpole built. That lobbyist has connections to Coun. Giorgio Mammoliti, who is a member of the EVBIA and was sitting on the parking authority's board at the time.
TPA President Lorne Persiko confirmed at committee that the organization had received information from the lobbyist about the price the vendor was looking for, because the lobbyist had a relationship with the seller.
Romeo-Beehler said it's hard to understand the exact extent of the lobbyist's role in the deal, but said they were "closer than I'm comfortable with" with TPA officials.
At one point in the process, Romeo-Beehler found the lobbyist was able to give the EVBIA information that was discussed at a private parking board meeting.
"I have no idea how he reported that," Persiko told councillors. "In camera is supposed to be in camera."
Coun. Josh Matlow says he wants the city's integrity commissioner to look into the case — something Romeo-Beehler suggested would be "appropriate" given some of the questions the audit committee has about the report.
"It smells, and it smells really bad," Coun. Josh Matlow told the committee. "Something went really wrong here."
Mammoliti says he didn't pressure TPA
Mammoliti, who wasn't at the meeting but spoke to CBC Toronto by phone, says councillors stopped short of making direct allegations against him on purpose.
"I would encourage them to make a comment like I've broken any laws … so I can sue their sorry asses," he said.
Mammoliti says he didn't pressure TPA staff to buy the land, something vice president of real estate and development Marie Casista agreed with at the committee meeting. He also says he believes, if given the time, the TPA would have done its due diligence and not overpaid.
Mayor John Tory, speaking with reporters earlier Tuesday, said he's concerned about what the auditor's review uncovered.
"It's not the kind of way we should be doing business in the city," he said.
Tory says the fact that the auditor general was called in right away proves the system is working.
Previously, the auditor general looked into TPA's real estate practices over a four-year span and found the agency needed to improve transparency around its decisions and do more to maximize the value of its deals.