Brampton councillors hit pause button on controversial plan for Municipal Development Corporation
After revelations of a connection between Mayor Patrick Brown and the man hired to design a Municipal Development Corporation to manage hundreds of millions of dollars worth of real estate assets owned by the City, councillors are demanding answers.
“Anything you heard about, let’s bring that forward and let’s have that open discussion,” Councillor Michael Palleschi said at Wednesday’s council meeting, following The Pointer’s reporting which raised numerous questions about how CAO David Barrick, hired under Brown’s recommendation, has handled the plan to hand over management of the City’s vast real estate portfolio. “Let’s make this the opportunity to have it as transparent and accountable to the public as possible.”
Council decided it will conduct a workshop open to the public so elected members and the residents they are supposed to protect can ask questions about how the development corporation plan has been handled.
No questions will be off limits, said Palleschi, who pushed for the workshop. A lot of work on the project has already been done since the previous council initiated the idea and Palleschi said it shouldn’t be thrown away.
The consultant hired by the previous council to devise a strategy for an arms-length private development corporation, was not retained after Barrick became CAO.
When the plan was moved from the corporate services department to his office immediately after Barrick was hired following his fraudulent behaviour in a Niagara Region hiring scandal he gave the consultant’s role to design a business model for the development corporation to a man named Brett Bell.
He has a direct connection with Brown, but this was never disclosed to council after it approved the hiring of a new consultant in December of 2019.
Brampton CAO David Barrick
After an article had been published in 2018 detailing Brown and Bell’s two-decade relationship through the PC party, he told The Pointer he has known Brown through their involvement in politics. A story in the Toronto Star quotes Bell who said he was a “long-time Conservative activist” and “has known Brown since his days as president of the PC Youth Federation,” a position Brown held in the late 90’s and early 2000’s.
Following a complaint to the Ontario ombudsman about Bell’s hiring that was filed by a former City of Brampton employee and forwarded to The Pointer, he was asked about his selection to do the work.
Bell said his company, MenesCo, was incorporated on January 11, 2020 (a corporate search on the Government of Canada website shows it was incorporated on January 12) one month after staff were given the go ahead to contract the work to a third-party consultant, and two days after Bell said he received an email from the City asking him to provide a quote to do the MDC work.
His company’s corporate address is a UPS store in Mississauga that provides mailboxes which can be listed as a street address. Bell lists his mailbox as “unit #321”.
Bell said he hasn’t spoken to Brown directly in two years and didn’t speak to anyone in the mayor’s office regarding the job.
The City would not explain who contacted Bell and why he was singled out and then chosen for the complex work despite not even having a consulting company and having no experience in real estate management or the setting up of such an enterprise.
It was also not explained why the previous company, N. Barry Lyon Consultants, which has five decades of experience in development feasibility and real estate strategy, was not retained.
Councillors and the public will now be allowed to ask questions about how Barrick has handled the process since he took over as CAO in late 2019, right after he was hired, despite his disturbing conduct in Niagara.
It remains unclear why the project is being handled by the CAO’s office. When it was first brought forward in 2017, the community services department handled the planning for a possible MDC. Numerous questions to the City from The Pointer about the process and Barrick’s role have not been answered.
The idea behind the MDC is to create an external organization, separate from the direct oversight of council, to handle the city’s real estate portfolio, in a similar manner to the MDC the City of Toronto has created.
A report by MenesCo presented two options. The first was for the MDC to control all real estate projects within the city. The second option highlighted six concept-areas to focus on, as outlined in Brampton’s 2040 Vision, a document that sketches the city’s future planning. These projects include Uptown, Downtown, Bramalea, Queen Boulevard, Industrial Corridors, and the five Town Centres. Council did not discuss the report.
One proposal for the MDC would focus on the five "Town Centres" and other areas of future growth in the 2040 Vision.
Bell recommended that Brown have a guaranteed seat on the board of directors for a new MDC and that the chair should be paid $25,000 annually, while a vice chair would receive $15,000.
Council members told The Pointer they were surprised to see these salary proposals in Bell’s report and they questioned why the mayor and other councillors who would sit on the board, could potentially be given such large compensation to attend monthly or quarterly meetings if selected chair and vice chair.
They are now seeking answers about the entire process around Bell’s hiring and the MDC plan itself.
Not everyone sided with Palleschi’s push for a council workshop. Regional Councillor Martin Medeiros was one of the handful of councillors who stated there is no need for a workshop because he “won’t be supporting this initiative during this term of council.”
His reasoning was twofold: there are too many questions on how the report by MenesCo was put together for him to support it; and the timing doesn’t seem right. With the ongoing pandemic, he cited difficulties in the real estate market. “I just don’t see by the time we do a workshop, by the time we get this rolled out…I’m not sure this term of council, I’d be able to support it.”
Regional Councillor Rowena Santos shared Medeiros’s concerns over the proposal and stated it wasn’t the right time to do the project since it isn’t part of the council’s current priorities.
Less than an hour before the discussion on the MDC began, council approved a list presented by staff outlining which projects should be prioritized during the remainder of the term. It has 16 initiatives, including the Active Transportation Master Plan and a second full-service hospital for the city. The MDC is not on this list.
“I’m concerned about the resources that this will take, the time it will take, and whether or not in a new term of council next year, whether or not this will be moot, depending on who’s sitting in the chair,” Santos said.
A majority of council members voted against pushing the MDC plan off to the next term of council. Many said it didn’t matter if council ultimately decides to push the MDC plan to the next term, because they want the opportunity to discuss their concerns over the way it has been handled and to get their questions answered.
“I think that if we ignore the term of council priorities, and set a precedent of continuing to add more and more things like this project, there's no point in having to report council priorities. Any successful organization knows what they're prioritizing and knows exactly what they're focusing on,” Santos said.
Barrick confirmed the project was not listed in the term of council priorities.
Putting together a workshop will take approximately three weeks, and while he wasn’t able to name the specific resources needed to pull the information session together, he did say it would be a “pivot”, taking some staff away from working on other projects listed as priorities.
This logic is unclear, as Barrick has pushed for the MDC plan through his hiring of Bell, and this would involve significant staff resources to execute whatever proposal from the consultant gets approved. Of course, now that Barrick’s mismanagement has been revealed, the MDC plan might not even go forward.
Between $200,000 and $400,000 has been spent looking at the project and hiring a consultant during this term of council, Barrick said Wednesday. The Pointer asked the City to confirm if all of this went toward one consultant, MenesCo, but no response has been provided. An update will be published if the City responds.
It’s unclear if a proper tendering process was used to hire Bell and why council was not involved in a process to approve the hiring, even if the cost was under the threshold for council approval. It’s also unclear if council approved a budget for Bell’s contract.
N. Barry Lyon Consultants, in a report it provided, prior to Barrick taking over the plan, said considerable work has to be done before moving forward with an MDC for Brampton.
Medeiros and others on council have questioned if the City even needs a semi-private company to manage the real estate assets, and have raised concern over transparency and oversight, while pointing out the City already has staff and management functions to continue doing this work in-house under the direct oversight of council.
Councillor Charmaine Williams agreed the MDC could be put off to the next term but said the public needed to be involved. She was concerned about whether or not residents were informed about the decision making process and how much money on this project was spent.
“I truly believe in an inclusive model of governance. It was the residents that elected us and once given all information, I believe that the residents will guide us on how to deliver the best initiatives for our city,” she told The Pointer.
Under Ontario’s Municipal Act, the public has to be consulted with the proposal before a final decision can be made. The consultant engaged with the public between November 4 and December 2, but the small engagement has raised concern about the timing of this public outreach, as the pandemic makes it incredibly difficult for the involvement of many residents in what should be a process driven by the public.
The public feedback so far has been largely opposed to the plan. Many pointed out the City formed a similar corporation previously, which ultimately failed.
The Brampton Downtown Development Corporation (BDDC) was formed in 2006, as a partnership between downtown businesses and the City, aimed at attracting businesses and investments to the area. A 2013 review found many problems with the organization, such as a lack of staff with experience in real estate investment. Allegations of political abuse, interference by City Hall, a lack of transparency and mismanagement dogged the group. In 2015 the BDDC was dissolved.
“Waste of time and money, as we already had a development corporation and it failed,” one comment from the public consultation reads.
Councillor Michael Palleschi pushed for a council workshop to openly discuss the future MDC.
Another concern voiced by residents is that an MDC would lead to corruption. The public opinion on this is similar to concerns voiced about the BDCC. “[This project] raises all the flags for potential abuse and mismanagement of assets,” one resident stated.
The public consultation includes residents who said they want to be a part of any corporation and be represented in its oversight, including through membership on the Board of Directors and “steering committees”, sub-groups that would focus on each real estate project the MDC manages. The business plan proposal outlines up to seven members of the public could be part of these committees.
Concerns have been raised over how council members on the MDC would be chosen, how members of the public would be selected and how the hiring and appointment of other roles would be handled.
These sorts of arms-length arrangements in municipalities across Ontario have been riddled with problems, as mayors often exert their authority and use such bodies to hand out favours and control council members looking for lucrative or influential appointments.
The business plan put forward by Bell recommends the BOD for the MDC have four members of the public, the mayor, two other members of council, and the City CAO. Council can change these numbers if they wish and can pick how many City representatives they want in the MDC.
This is one of the many problems with his report, which is now raising red flags. Brown and Barrick could effectively control the entire real estate management process, dictating who sits on the board and who gets hired as the CEO. It’s unclear why Bell did not propose a much more open, and publicly accountable business model, ensuring broad input to manage the public real estate assets on behalf of taxpayers.
Instead, Barrick would have immense sway and the mayor would sit on the board, possibly as chair or vice chair.
The public consultation states participants want to see representation within an MDC from Peel Housing, senior citizens and youth, with broad representation on the board to ensure proper oversight and accountability.
“Residents should have a stronger role in determining what is needed in their neighbourhoods because they actually live there,” one comment read.
It’s not clear when the workshop will take place and how residents will be able to participate.
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