Another Sweetheart Deal for Developers

A $13m giveaway buried in the Ford-Sutcliffe "New Deal for Ottawa"

(Correction: in last week’s the 613, there was an incorrect link. Here is the correct link to my mobile-friendly Ottawa Bike Map.)

Site of a future long-term care facility at The Ottawa Hospital Riverside campus.

Not as advertised

Mayor Sutcliffe likes to talk about the $543m “New Deal for Ottawa” that the City negotiated with the Ford government.

As I have previously noted, it is a weak deal compared to the New Deal for Toronto. If you remove the already-promised money for housing, Ottawa’s deal drops to $425m. If you count the savings on highway uploads in the same way as the province did with the New Deal for Toronto, our deal drops to $369m.

Last weekend in the Ottawa Citizen, we learned that our New Deal is another $13m poorer, taking us down to $356m.

And that $13m looks like it will go straight to the bottom line of Schlegel Villages — one of the largest private providers of long-term health care in Ontario.

The back story

1. In 2005, the City sold some surplus land next to the Riverside Campus of The Ottawa Hospital for a dollar. But that sale included a condition that if the land was used for anything other than non-profit healthcare, the City could buy it back.

2. The Hospital decided to allow a private developer, Schlegel Villages, to build a for-profit long-term care facility at the north end of the Riverside campus, near Smythe Rd. It would be built on a parking lot with, I understand, the parking spots replaced on land right next to the new facility.

3. Given that the land would no longer be used for non-profit health care, City Council last summer approved a report recommending that the Hospital be charged $13m.

4. Fast forward to this past weekend, and we now learn, according to City Manager Wendy Stephenson, that a “non-negotiable” part of Ford’s New Deal was that Ottawa transfer to the Ontario government the right to receive that $13m compensation.

$13m loss for Ottawa

In other words, part of the New Deal for Ottawa was that the city gave up the right to collect the $13m that Council had approved collecting from the hospital.

This is an unambiguous $13m loss for the taxpayers of Ottawa. $13m that could have been spent on any City priorities.

Why would the Ford government make this “non-negotiable”?

If the City of Ottawa had charged The Ottawa Hospital $13m, the hospital would have passed these costs on to Schlegel Villages, impacting their bottom line.

But if the provincial government took over the right to compensation, they would not have to enforce the $13m penalty. The province could, and almost certainly will, retire that $13m claim.

That sounds like another Ford Government sweetheart deal for a developer.

City letting us down

I don’t believe the City is complicit in engineering this developer sweetheart deal. I take the City Manager at her word, that this was all at the insistence of the province.

But I do have questions.

• Why are we only hearing about this now? Why wasn’t this $13m loss included in the New Deal total?

• Did the Mayor know about this $13m giveaway when the deal was announced? If so, why did he misrepresent the true value of the deal?

• How does City staff, presumably in consultation with the Mayor, decide that it’s okay to reach an agreement in direct conflict with a recent Council decision?

Ottawa may not have been complicit in helping out Schlegel Villages, however, the City certainly didn’t stand up to the province on a point of principle. The City didn’t demand matching compensation, as one would expect.

Furthermore, the City was complicit in hiding this unattractive deal term from the public.

But wait … there’s more

I thought that was the end of the story.

But something else is suddenly happening at the Riverside campus.

The Hospital is now planning to pave over the last remaining green space at the Riverside, at the far south of the campus, to build a new parking lot. Construction staff have begun marking out the property.

Is this related to the construction of the LTC facility? The south-end parking is not covered in the development application. But perhaps the Hospital is taking advantage of the upcoming construction to slip through a new parking lot that it knows will be unpopular with many.

Expect to see a follow-up piece from me in the next few days on this concerning proposed loss of green space.