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.
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. 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. 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.
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.
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.