Why, when the City owns millions of dollars of land and buildings within 2 km from the current Adelaide St. site, why did they decide to rent 233 Carlton at what is clearly a premium price?

Why not renovate one of the existing buildings that the City already owns in a more suitable location in the downtown area that is actually close to the existing site?

Why did the City not choose to construct a new building on vacant city land for perhaps half the cost, instead of spending millions of dollars on leasing and improving 233 Carlton Street, a building the city does not own?

Commencing in July 2020, the broad WE organization including the charity, their for-profit companies and more importantly the Kielburger brothers have come under scrutiny in Ottawa and across the country over their business dealings and non- transparent practices. Supporters and advocates of the Cabbagetown Coalition have sent us copies of email sent to the media, Councillor Wong-Tam, the Mayor and other City officials and we appear to be having some success in directing the focus to the 233 Carlton site.

 

Our goal is to continue to “get the message out” with respect to our longstanding concerns of SSHA’s unfair and wasteful practices, systemic secrecy and suppression of public consultation, and Council’s lack of oversight and accountability on spending of millions of taxpayer dollars. We strongly believe that any decisions made by staff through delegated authority should be open and transparent.

 

At the July 28/29, 2020 meeting of City Council on Councillor Wong-Tam successfully put a motion to Council (MM23.28) asking the following three questions:

• how did the property first come to the attention of senior City Officials?
• who from the WE-related organizations communicated with the senior City Officials that may have affected final delegated decision-making on site location and financial terms?
• if the value paid for the lease agreement is inline and competitive with fair market valuation for comparable properties?

 

The City Manager and the Executive Director, Corporate Real Estate Management are now instructed to make public, as soon as possible, the following information about the recent lease agreement for 233 Carlton Street, and to also report to the September 30 and October 1, 2020 meeting of City Council.

 

So, some progress has been made — but the deal is about more than money and influence. It’s also about the appropriateness of the choice of location and the safety and security concerns that this engenders.

Our primary concern about the location of this respite and drop-in centre relates to public safety, not only for local residents and their children, but also for the women^[1] who use the centre, who will have no security once they step out of the door of 233 Carlton and onto the sidewalk. SSHA has told us firmly that their responsibility for clients stops at the front door.

 

SSHA says that the 233 Carlton location was chosen because it is in close proximity to 67 Adelaide St., but 67 Adelaide Street is 2.2 km away — a distance that anyone living downtown would not consider to be close proximity. In fact, at the Jan. 21, 2020 Public Forum scheduled by the City, a Fred Victor staff member questioned whether the women would actually leave their Adelaide Street community to come this far north.

 

From various enquires to SSHA and other city officials, it also appears that the site was possibly selected without any actual site visit being performed, nor were they familiar with the neighbourhood. The City reports that 11 other properties were examined and rejected, but they will not give any information on these locations nor on the site selection process. SSHA has only said that 233 Carlton Street met their criteria. But, 233 is non-compliant with existing zoning by-laws.

We have also not seen nor been able to obtain an estimate of the costs for off-site  services that will be required such as community policing to provide public security, the additional garbage collection or enhanced street and laneway cleaning, all of which will be additional costs to the City.

^[1] Those using the service are not necessarily homeless, but their housing may be dangerous or precarious. We have been told that three meals a day will be available to 60-100 people (pre-COVID-19) , and that the first 35 women (pre-COVID-19) in the facility at 8:00 pm will be allowed to stay for the night, but unlike shelters with security and lock-down they will be permitted to come and go at any time. There will be no security, other than surveillance cameras provided outside the building. How does a 24/7 facility protect vulnerable women, or keep the location free from the drug dealers and pimps from whom many are seeking respite? 

233 Carlton Street is located in the heart of the Cabbagetown’s business district. The total  building is 12,754 square feet of which 8,214 square feet is usable floor space.

 

233 Carlton Street is owned by 1622774 Ontario Ltd., a numbered company registered to Fred and Theresa Kielburger, and was bought by them for $1.47 million in 2004, property records show. The city records from December 2019 show the owner as Marc Kielburger.

 

On July 31, 2019, the City quietly signed a lease with the Kielburger company for this property, with the intent of using it to provide shelter related services to women now receiving services at the Adelaide Resource Centre located at 67 Adelaide Street. The almost $10 million real estate deal was not approved by City Council but the City Manager, Chris Murray, under his delegated authority to approve this type of financialtransaction.^[1]

 

The City department spearheading this project is Shelter Support & Housing Authority (SSHA). Although details on specific plans are unclear generally SSHA intends to relocate the 24/7 respite and drop-in centre services for women from their Adelaide St. facility to the 233 Carlton site. The new centre will be operated by the Fred Victor Mission.

 

The total estimated lease, operating and capital costs for the 10-year, plus 5-year optional term, is $9.8 million ($9,764,984.12). Included in that amount the City will spend $3.7 million on capital leasehold improvements^[2]. The City will pay for all costs related to maintenance and insurance. In addition, the city will also waive about $50 thousand in annual property taxes, and other tangible indirect costs as a result of their client activities beyond the building walls which SSHA says is not their responsibility —increased community policing resources, solid waste management services, laneway cleaning, etc. are not included.  The Cabbagetown Coalition knows from experience with other respite centres that these costs are substantial. If a holistic approach for costing this project had occurred, which includes all indirect costs, the total project costs would be significantly higher, well beyond the delegated approval latitude of the City Manager.

 

The question is, would City Council have approved this project if there was transparency and disclosure of the full financial impact of this project? At minimum, there would be more accountability and oversight from the Mayor and our elected Councillors to proceed with this project.

 

In reviewing the scope of City Manager’s delegated authority we have concluded that he acted beyond limits of the delegated authority when he approved this real estate project and therefore any expenditures related to this real estate transaction, including the $200,000 in rent paid to August 2020, should not have been authorized.

 

The scope of the City Manager’s Delegated Authority is outlined in CD24.7 2018 Shelter Infrastructure Plan and Progress Report adopted by City Council on December 5, 2017.^[3] Clause 2 of that item states:

2.  City Council authorize the Deputy City Manager Cluster A, in consultation with the Chief Planner and Executive Director, City Planning, the General Manager, Shelter Support and Housing Administration, the Executive Director, Social Development, Finance and Administration, and the Director, Real Estate Services to approve specific sites for emergency shelters as per Attachment 2 to the report (November 10, 2017) from the General Manager, Shelter, Support and Housing Administration, provided that:

a.  the funding for these sites is within the capital and operating budgets approved by City Council;

b.  the shelter project has been approved by Council through the annual shelter infrastructure plan; and

c.  the location meets the requirements of the Municipal Shelter Bylaw 138-2003 and applicable zoning by-laws.

 

As a condition to exercise the Delegated Authority a proposed site needed to meet all applicable zoning by-laws. 233 Carlton did not satisfy this condition. Based on the architectural plans submitted to Toronto Building in December 2019, the City needed to seek approval for a Zoning By-law variance before Committee of Adjustment. That hearing was held in February 2020 and is now currently under appeal at TLAB.^[4]

 

The 233 Carlton Street site should have been filtered out for consideration as a possible shelter location due to zoning issues. The city failed to do adequate due diligence on this project. The necessary architectural plans should have been done prior to signing a 10-year lease so as to ensure project costing estimates used to approve this project under delegated authority, were complete and accurate and to verify the proposed plans met applicable zoning by-laws.

 

 

^[1]In 2017, the blanket delegated authority entrusted to the City Manager by City Council was intended to give SSHA the ability to make decisions on lease/purchase of properties without the need for Council for oversight or approval. The maximum amount of the City Manager’s delegated authority latitudeper dealis $10 million dollars.

^[2] https://www.toronto.ca/wp-content/uploads/2019/10/986f-2019-210_-233-Carlton-St.pdf

^[3] 2017.CD24.7 – 2018 Shelter Infrastructure Plan and Progress Report

^[4] Application #:  19 259695 STE 13 MV submitted Dec. 10, 2019. Full information on the Committee of Adjustment web site.