Details

Background: Southlake Regional Health Centre Chief Executive, Arden Krystal, met landowner and developer, Michael Rice, at King’s Municipal Centre on 1 November 2022. At this hugely consequential meeting Rice offered Krystal a site for a new acute hospital on Greenbelt land in King which he had purchased six weeks earlier on 15 September 2022.

In fact, Rice had been talking to Southlake about the new hospital since January 2022.

Southlake insists it has no records of what happened at that 1 November 2022 meeting which took place three days before the Government announced that it would be opening-up certain areas of the Greenbelt to development.

When King’s Mayor, Steve Pellegrini, moved a motion at Council on 7 November 2022 celebrating Michael Rice’s decision to make land available for a nominal fee, Arden Krystal asked him to make minor changes to the motion to make it “less controversial”.

For its own reasons Southlake is not telling the whole story about how it came to be offered Greenbelt land for a new hospital campus, essentially free-of-charge. 

Despite this, Southlake boasts of its pride in being transparent.

Southlake's Strategy: Don’t Explain. Don’t Complain.

I have filed a series of Freedom of Information appeals with the Information and Privacy Commissioner of Ontario to find out what really happened. But it is not easy. We only have part of the picture because Southlake's top management steadfastly refuses to tell us what they know.

Months ago, following a Freedom of Information request, I was told that Southlake had indeed received an invitation from the Chief Administrative Officer of King, Daniel Kostopolous, to the key meeting on 1 November 2022 with Michael Rice and Steve Pellegrini. But, ludicrously, Southlake is unwilling to tell me who received the invitation and when. I have filed an appeal.

Transparency: Conflicts of Interest

I also asked Southlake for sight of any declarations of conflict of interest disclosed by Board Members from 1 June 2018 – 30 September 2022 but I am told this is confidential and that it happened in a closed meeting. For that reason it will not be disclosed. There was a conflict of interest declared at the Board meeting in September 2022 but we don't know who made it nor its nature. Was it pecuniary or non-pecuniary? It is all a complete mystery. And the fact that a Conflict of Interest declaration was made is not mentioned in the meeting summary.

Hospital Board members are treated differently from elected members of municipalities. The difference is striking.

Municipalites must keep a Declaration of Interest Registry which is open to the public. Southlake, as a hospital, does not. 

With municipal closed meetings the declaration of interest (but not its general nature) must be recorded in the minutes of the next meeting that is open to the public. But Southlake does not produce Minutes of Board meetings – only summaries of meetings. When Southlake Board members declare conflicts of interest these are never reported publicly.

Transparency: Minutes of Board Meetings

I have also appealed against Southlake’s refusal to let me see the minutes of Board meetings on 22 September 2022, 24 November 2022 and 26 January 2023 even when I said these should be redacted by them as they see fit.

I am told the minutes are confidential and cannot be released. Period.

Surely the offer of land for a new hospital in King for a nominal fee would have been reported back to the Board? We have no way of knowing.

All we have to go on are the skeletal Board summaries which make no reference to the offer of land. The meeting summaries do not even tell us which Board members were present.

Other hospitals in Ontario publish Board minutes, redacted where necessary. 

Transparency: Land Acquisition 

I also asked for sight of the background materials submitted to the Board in relation to a new Land Acquisition Sub Committee – again redacted as Southlake sees fit. The formation of the sub-committee is mentioned in the Board summary for 22 September 2022 but no other details are given.Dunlap

John Dunlap, the realtor acting for Bob Schickedanz, the former President of the Ontario Home Builders Association who sold the 2.78 sq km of Greenbelt land to Michael Rice, came off the Southlake Board in September 2022.

Re-writing key planning policies

Elsewhere…  Doug Ford is abandoning all pretense that he is interested in preserving the Greenbelt. His proposed Provincial Planning Statement 2023 (PPS)

“will form a single Province-wide land use planning policy document to support the achievement of Provincial housing objectives.”

A trenchant commentary from York Region says the proposed PPS will no longer restrict expansion of Greenbelt and Oak Ridges Moraine settlement areas 

“potentially permitting uncontrolled expansion of these areas”. 

Ford has no mandate for these changes which were never flagged up in the last election.

Back in 2018 Ford was caught on camera promising a group of developers he would open up a “big chunk” of the Greenbelt. There was a furious reaction and he did a rapid U-turn. Now he clearly believes he doesn't need to dance around the issue any more. The Greenbelt is open for business.

Natural Heritage Policies to be unveiled later

A report to Newmarket’s Committee of the Whole yesterday tells councillors the Province is reviewing natural heritage policies but these are not included in the proposed Provincial Planning Statement. There will be a separate posting on the Environmental Registry of Ontario.

This is very relevant to us in Newmarket given the Rice lands are immediately adjacent to the Town.

York Region’s Chief Planner, Paul Freeman, told me on 7 February 2023:

“Now that the (Rice) lands have been removed from the Greenbelt, presumably natural heritage features will still be protected and the official plan and zoning by-law will be amended to reflect the Province’s direction. This is necessary to enable development applications and building permits. I would anticipate the Province will be issuing a Minister’s Zoning Order to further define how development on these lands will proceed.”

Paul Freeman presumes natural heritage features will still be protected.

Personally, I think that's a big assumption to make.

Natural Heritage issues - protected lands, wildlife corridors and all the rest have been put on the back burner for the moment to allow the process to be better managed. But, at some stage, Ford will have to tell us which natural heritage features he plans to throw overboard to make more land available for sprawl.

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The map below shows the Rice lands which were removed from the Greenbelt on 21 December 2022. The grey area shows land within the Oak Ridges Moraine which has now been designated a settlement area. The Rice lands still include natural heritage features which may or may not be protected. The Dunlap lands, as can be seen, contain land designated as countryside. There are other natural heritage features. 

 

Details

I see the developer who is planning to build “an elite collection of urban Townhomes” at Gorham and Muriel here in Newmarket has been accused of a $37M “cheque kiting” fraud scheme.

I feel like an innocent abroad. Cheque kiting? What on earth is that all about?

The CBC reports the home developer is facing allegations that it orchestrated a “highly sophisticated” year-long fraud" totalling over $37M.

State View Homes deny they are bankrupt.

Hmmm.

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Details

 On 14 December 2021 the Town gave a Donation (or Tax) Receipt for $14,290,000 to the developers, Marianneville, in exchange for a 15.92 acre parcel of land at Glenway West.

The land was gifted to the Town by the developer who didn't want it.  The background is here. 

As I pointed out at the time, a tax receipt issued in exchange for a charitable donation can be used to offset taxes owing to the Canada Revenue Agency. It is as good as real money.

Marianneville told the Town it wants permanent signs posted along the trails on the donated land, reminding people of its gift to the Town of Newmarket and how terrifically generous they are. This will soon become an entrenched part of the Town’s history, a beneficent developer donating land for the public good.

Bogus

I thought the whole valuation was completely bogus and I said so. The gifted land contained two large stormwater ponds that would have to be filled in to accommodate any new development. I was not even remotely convinced a Townhouse development on that site (which was used by the Valuer to justify the valuation) would get planning approval. (Right: one of the two stormwater ponds on the gifted land at Glenway West)

Indeed, the Town’s planners and engineers were never consulted on the valuer’s assumptions. There was no requirement for them to take a view on, say, whether it was realistic to fill-in stormwater ponds in this location.

The Town wasn’t even involved in choosing the Valuer.

No New Valuation

On 14 April 2022 I asked the newly appointed Chief Executive, Ian McDougall, to commission a new valuation. But he told me the Town would rely on the Valuer’s Report and would not commission a new one unless directed to do so by the Canada Revenue Agency. 

“You are correct that the Canada Revenue Agency requires the Town to ensure that the fair market value reflected in the Tax (or Donation) Receipt is accurate. It is for this reason that the Town retained an independent third party professional appraiser to prepare a valuation report in accordance with the standards and practices adopted by the Appraisal Institute of Canada. Relying upon that professional advice, and in accordance with the requirements of Canada Revenue Agency, the Town issued a tax receipt in exchange for the donation of 16 acres of public, open and green space. As you know, this land will be enjoyed by the community in the future through the use of trails that will be constructed on site.
 
The Town would not alter the amount on a Tax (or Donation) Receipt that has already been issued without direction from Canada Revenue Agency. Therefore, commissioning a new valuation report would have no practical purpose and would not be an appropriate expenditure of public funds. 
 
I will be asking staff to look into other municipalities' experiences in these sorts of donated land situations in order to positively evolve our approach from any best practices identified.”

So I wrote to the CRA and there it remains, no doubt forgotten, at the back of a filing cabinet somewhere in Ottawa.

Best Practices

On 26 January 2023 I asked Mr McDougall for an update on the best practices he spoke about and how other municipalities do these valuations. 

“Would it be possible for you to let me know if your staff have identified any best practices that Newmarket could adopt?”

And on 30 January 2023 he replied:

“I have established the internal expectation that the most timely industry best practices be looked into by staff prior to completing any similar transaction in the future. This is especially important as things can change over time. I would suggest this will be rare occurrence so I don't expect another one for some time. So in waiting we will have the most up to date info and will also then only expend staff time when it is most warranted.”

Stonehaven

It looks as if Marianneville will not be asking for a Tax Receipt for land it doesn't want at Stonehaven. Anything they consider surplus and can't use - such as stormwater ponds - will be gifted to the Town with great fanfare. The gesture will be hailed by Town and developer alike as another win-win. That's the way it works. 

I got sight of the Glenway West Valuation Report through a Freedom of Information request but it was never posted on the Town’s website. I was told it had to be re-formatted.

Mr McDougall promised to arrange this and he has followed through. I am grateful.

The Valuation Report (appraisal document) is now on-line and is available here.

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Details

This is from this morning's Globe and Mail page A7: Records show talks with developer began before he bought property in protected lands, shortly before Ford Government reversed its promise. 

The Globe and Mail's Jill Mahoney writes:

A proposal to donate part of a sprawling property in Ontario’s protected Greenbelt for a new hospital followed talks that spanned nine months and involved a developer, local mayor and hospital executives, documents show.

Internal records obtained by The Globe and Mail through freedom-of-information requests shed light on the timeline of developer Michael Rice’s interest in Southlake Regional Health Centre’s expansion, revealing he began discussions with hospital officials before buying a property largely located in the Greenbelt, an arc of protected farmland, forests and wetlands encircling the Greater Toronto Area. The documents also show Mr. Rice’s company purchased $15,000 in event sponsorships at the request of a local mayor.

Mr. Rice’s $80-million purchase of the property, a portion of which is being considered for the new hospital, closed less than two months before Premier Doug Ford’s Progressive Conservative government reversed its long-standing promise not to touch the Greenbelt by unveiling plans in November to allow the construction of at least 50,000 homes on 15 areas of protected land. Mr. Rice’s property in the township of King is among the land freed up for development.

King Township’s Mayor had previously confirmed that he, Mr. Rice and officials from Southlake met to discuss the property three days before the government’s Greenbelt announcement, but the records reveal that Mr. Rice began talks with the hospital about its expansion plans in January, 2022.

The documents do not detail what land was discussed at the January meeting. It is not clear when Mr. Rice, who owns other property in the area, became interested in purchasing the land in King, an affluent area north of Toronto known for its horse stables.

The Globe and other media outlets reported that Mr. Rice and several of the other landowners whose properties were removed from the Greenbelt have ties to the PC Party. A donor named Michael Rice has contributed more than $13,000 to the PC Party since 2018, provincial records show, and Mr. Rice’s development company hired a former Ontario PC cabinet minister to lobby the government between 2019 and 2020.

Both the province’s Integrity Commissioner and Auditor-General are investigating the Greenbelt decision amid accusations from opposition parties and environmental advocates that the government tipped developers off about its plans, which Mr. Ford and Municipal Affairs and Housing Minister Steve Clark have denied.

Mr. Rice, president and CEO of the Rice Group, a retail, industrial and infrastructure development company, did not respond to e-mails seeking comment.

The terms of Mr. Rice’s proposed land donation for Southlake’s expansion have not been made public and were not detailed in dozens of documents disclosed by Southlake and King Township.

At a meeting with Southlake and King Township officials on Nov. 1 – three days before the government’s Greenbelt announcement – Mr. Rice committed to providing a portion of his land for the new hospital for “a nominal fee – $2, $5, whatever,” King Mayor Steve Pellegrini said in an interview with The Globe.

Mr. Pellegrini said he had no advance knowledge of the government’s plans and said there were “never any deals” to support removing Mr. Rice’s land from the Greenbelt if he agreed to donate part of the property for a hospital. (Mr. Pellegrini says the government could have located a hospital in the Greenbelt through a legislative amendment or ministerial zoning order.)

Southlake requires a second hospital on up to 40 hectares of land to relieve overcrowding at its current Newmarket facility. The province provided $5-million for expansion planning a year ago.

Officials are “evaluating all opportunities as part of our site selection process,” including Mr. Rice’s land, Southlake spokeswoman Lindsey Furlanic said in a statement. Potential locations are being assessed based on several criteria, including proximity and “financial considerations,” she said.

Mr. Rice’s property is a total of 278 hectares, or 2.78 square kilometres, and borders Newmarket.

The documents from the FOI requests indicate that Mr. Rice’s company approached Southlake and King Township for meetings last year.

Jordan Holt, the Rice Group’s manager of acquisitions and finance, asked for a meeting about the hospital’s expansion plans in early 2022, telling John Marshman, Southlake’s vice-president of capital, facilities and business development, in an e-mail that he would “prepare a preliminary overview of our company/land holdings that may be of interest to you.”

After the Jan. 26, 2022, meeting, which Mr. Rice attended, Mr. Holt thanked Mr. Marshman, writing: “We look forward to staying close to this project and I’d like to reiterate Michael’s statement that we’re here to help in any capacity.”

In April, a real estate firm promoted the large Greenbelt property in King on Facebook as “a prime land banking opportunity,” the practice of holding undeveloped land for future development.

Realtor John Dunlap declined to say when he began representing the former owners, who were members of the Schickedanz family, prominent developers with ties to the racehorse industry, but said he was the second agent they worked with. The family did not respond to a request for comment.

In June, John McGovern, the Rice Group’s senior vice-president of policy and planning, contacted King Township’s chief administrative officer, Daniel Kostopoulos, to ask for a meeting. He noted that Mr. Rice had recently run into Mr. Kostopoulos and discussed “the lands we have under contract in King.”

Over lunch on Aug. 10, Mr. Pellegrini met Mr. Rice for the first time and asked if he would consider donating part of his property for Southlake’s expansion.

“He said, ‘Absolutely,’” the Mayor recalled, adding that a hospital would make the rest of Mr. Rice’s land “very appealing” for other developments.

A few weeks later, Mr. Pellegrini’s executive assistant Teresa Barresi e-mailed Mr. Rice to invite him to the Mayor’s cultural gala in September, attaching sponsorship information. The company purchased a $5,000 “gold” sponsorship, which included four tickets and an ad in the program.

Mr. Pellegrini said his staff routinely asks business people to sponsor events that support local initiatives.

“I’m very transparent and very clear. I do not touch money. I do not ask. It goes through the township,” he said.

King Township staff later organized a meeting for Mr. Rice with Southlake officials on Nov. 1.

A draft six-slide presentation the Rice Group prepared ahead of the meeting described the company’s services – including planning, construction and project management – and featured a draft concept site plan. (The Township of King withheld two slides about the site plan from disclosure on the grounds they contain third-party information.)

The Rice Group subsequently sent Mr. Kostopoulos a revised presentation that did not include the draft concept site plan, asking him to delete the previous e-mail.

The Nov. 1 meeting with Southlake was attended by Mr. Rice, Mr. Pellegrini and Arden Krystal, Southlake’s president and CEO, along with other officials. Neither Southlake nor King Township provided any records detailing what took place at the meeting.

On Nov. 4, the Ford government revealed it was opening up the Greenbelt, which protects more than 800,000 hectares of countryside, by removing 3,000 hectares of land for housing development. The province also added 3,800 hectares to the Greenbelt elsewhere.

Two days later, on the following Sunday, Mr. Pellegrini’s executive assistant, Ms. Barresi, e-mailed Mr. Rice, saying Mr. Pellegrini had asked her “to reach out to you regarding your purchase” of a $10,000 “diamond” sponsorship of the Mayor’s Nov. 29 business development breakfast. (King Township spokeswoman Donna Kell said Ms. Barresi contacted seven potential sponsors that day.)

A Rice Group official paid for the sponsorship the next morning. Later that day, Mr. Pellegrini introduced a motion at a King Township council meeting calling on the provincial government to fast-track approval of the new Southlake site on Mr. Rice’s land.

Mr. Pellegrini, who says he opposes the decision to open up the Greenbelt, said he worked on the resolution after hearing about the government’s announcement.

“It’s like, if you’re going to serve me up lemons, I’m gonna make lemonade out of this,” he said. “I want my hospital.”

Before introducing his motion at the Nov. 7 council meeting, Mr. Pellegrini sent the text of the resolution to Ms. Krystal, Southlake’s CEO.

In her response, Ms. Krystal thanked Mr. Pellegrini for his support and asked him to make minor changes to make the motion “less controversial,” e-mails show. Mr. Pellegrini made the edits, which included adding that the lands satisfy King’s “understanding” of the criteria for the new hospital site.

Ms. Krystal said in a statement she requested the tweaks because the Greenbelt plans “were still subject to provincial consultation and would need to be reviewed as part of our site selection process.” (The land removals became official in December.)

In the hours before the council meeting, Mr. Rice sent maps of his property to Mr. Kostopoulos, King’s chief administrative officer, and asked for a phone call so he could “pass some comments on.” That same day, Southlake’s Mr. Marshman e-mailed Mr. Rice to arrange a follow-up meeting. Mr. Rice agreed, writing: “We are ready to review concepts.”

In late January of this year, Mr. Marshman sent the Rice Group’s Mr. Holt a list of information required by the hospital’s architects, including “current concept plans for the broader development illustrating streets and blocks” – the first hint of a larger vision for the land in the records disclosed to The Globe.

Mr. Marshman also asked if the Rice Group had contacted officials in King Township and Newmarket about sewer and water main connections.

Municipalities are wrestling with providing sewage and other services for lands freed from the Greenbelt, though the province has said it chose areas that were “on or near readily serviceable land.”

Mr. Pellegrini said figuring out how the land will be serviced is an open question. “I can barely service the lands I have now, so who’s servicing this land?”

(Click read more for my initial comments on Jill Mahoney's article.

Details

A presentation at King Municipal Centre on 1 November 2022 involving landowner and developer Michael Rice and Southlake CEO, Arden Krystal, shows the proposed location of Southlake's new acute hospital. It was planned to straddle Greenbelt land owned by Rice and John Dunlap. The format of the meeting was agreed beforehand by King CAO Daniel Kostopolous and John McGovern, the Senior Vice President (Policy and Planning) of the Rice Group.

Dunlap was a member of the Southlake Board until September 2022 and was the agent who facilitated the sale of the 2.8 sq km block of land from Bob Schickedanz, the former President of the Ontario Home Builders Association, to Michael Rice, the developer.

The 1 November 2022 meeting was three days before the Government announced that certain areas of the Greenbelt would be opened up for development. The following month, on 21 December 2022, the Rice lands were removed from the Greenbelt.

The Township of King originally said they had no records of the meeting on 1 November. That was incorrect.

Southlake have also said they have no records of the 1 November 2022 meeting when Michael Rice made the hugely consequential offer of land to them for a nominal fee. 

I suspect Southlake's "no records" position is now unsustainable.

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Update on 31 May 2023: Selling the Greenbelt: Southlake and Transparency

Below: The plan posted on the Environmental Registry showing the Rice Lands to be removed from the Greenbelt:

 

 

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