John Barber on Front Street Millionaires

[tooker gomberg]

Astute councillor won't apologize for land purchases

By JOHN BARBER

Saturday, Jul. 5, 2003

New city councillor Fred Dominelli made a big impression on his 
colleagues with his maiden speech at last month's council meeting. 
The well-known businessman and community activist, appointed 
temporarily to fill a seat vacated by retired veteran Betty Disero, 
raised eyebrows by declaring a conflict of interest in no fewer than 
10 separate items on the meeting's agenda, including four of the 
first six items from the key policy and finance committee.

Some of the conflicts concerned a deal Mr. Dominelli's son, Joe, had 
made to operate a restaurant on the Canadian National Exhibition 
grounds. But the most interesting concerned upcoming land deals that 
could see the City of Toronto turn its newest councillor into an 
instant millionaire.

The deals under discussion are expropriations necessary to construct 
the recently approved, $245-million extension of Front Street from 
Bathurst to Dufferin.

Mr. Dominelli can't vote on the deals because he, in partnership with 
former city politician and senior provincial bureaucrat Dale Martin, 
owns slightly more than two blocks of the proposed right-of-way -- a 
narrow strip of land sandwiched between rail tracks and the rear 
walls of factory buildings just north of the CNE.

Despite the existence of official plans that clearly mapped out the 
new road's route along the northern edge of the Lakeshore rail 
corridor, the partners were able to buy 1.4 hectares of it from 
Canadian National in 1997. They paid $280,000.

Six years later, city officials estimate that it will cost 
$60-million to acquire property needed to build the new road, with 
half of that amount needed to obtain 6.1 hectares of privately held 
land between Strachan Avenue and Dufferin. By that measure, the 1.4 
hectares Mr. Dominelli and Mr. Martin own in the middle of 
Strachan-Dufferin section will cost $6.8-million to acquire.

"It was a smart investment," Mr. Dominelli said yesterday, piloting 
his Jeep through the empty lots and scrublands at the bottom of the 
Liberty District. As for its current value, he added, "I can't tell 
you. I never put a price on it."

The popular owner of Fred's Gas Bar on Queen Street West, Mr. 
Dominelli has spent decades steadily accumulating land in the area. 
He owns one local property in partnership with Tony O'Donohue, 
another former city politician. Several years before he and Mr. 
Martin bought the former Jefferson Yard from CN, Mr. Dominelli bought 
another railway property on Dufferin Street that will also be 
expropriated for the Front Street extension.

The temporary politician, whose appointment ends with the November 
election, will not vote on his upcoming expropriations. But neither 
will he apologize for his foresight in snatching up an unprotected 
strip of the new roadway. "The city should have jumped on this," he 
said, gesturing over the dusty chief asset of 1289777 Ontario Ltd. 
"Why do they criticize me now?"

Despite one politician's attempt to make the deal an election issue 
in 2000, nobody is criticizing Mr. Dominelli, in fact.

"Nothing can be done," said Helen Noehammer, the city engineer in 
charge of the Front Street extension.

"We did have the right-of-way identified [in 1997], but we were not 
notified that the property was for sale."

CN first offered the land to the individual owners of the factories 
that backed onto it, according to Mr. Dominelli. When most of them 
declined, the railway turned to him -- a previous customer. "They 
gave it to me after everybody else refused it," he said, adding that 
he enjoyed no privileged access on the deal. "I bought it on the open 
market."

Mr. Dominelli disputed the claim that the city received no 
notification that CN intended to buy the land.

"The city had a letter before anyone else to buy and they turned it 
down," he said. "That's what bothers me."

The ones at fault here are not those who bought the property, he 
insisted, but those who didn't.

"If this was a major right-of-way, why don't these people jump at 
it?" he asked, adding that upcoming public investments in the area 
are well known. "I don't think I'm the only guy speculating there. I 
think the whole block is speculating."

Meanwhile, the estimated price of the Front Street extension soars 
like an untethered kite. Once estimated at $120-million, the price 
grew to $170-million as the project took shape and now, with the 
final approvals in hand, stands at $245-million.

"One of the items that went up was property," the city's Ms. 
Noehammer confirmed.

The current $60-million estimate to acquire necessary properties is 
already almost $20-million higher than it was three years ago.

<mailto:jbarber at globeandmail.ca>jbarber at globeandmail.ca


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