News Update: June 11, 2008 article by
John Barber Globe and Mail.
Re: ‘City Council June 23/08 ‘Kiwanis Club of Casa Loma Management
Agreement’
Torontonians’ are
about to be robbed of over $49.36
Million* in losses for another 20
years when City Council meets on June 23rd of 2008 to approve Kiwanis
Club of Casa Loma Management Agreement.
(*refer
below A to D on City loses $ 49 million)
The City
Manager’s report recommendations for this lease agreement were approved by the
City’s Executive Committee on June 3rd 2008, granting Kiwanis Club
to receive another 20 years ‘sole-sourced’ control of Casa Loma. For the past
70 years since 1936, Kiwanis Club have had
monopolistic control for governance of our city-owned Casa Loma castle.
On Canada Day,
Kiwanis Club (a US republican charity club) agreement will be effective for
another 20 year tenure over Canada’s castle - 2nd largest tourist
attraction. For a total of 90 year’s control of Casa Loma’s operations at
Torontonians expense.
The other City-owned
public institutions such as the Ontario Museum, Art Gallery of Ontario, and
Toronto Zoo, are operated under the City’s Board of Trustee’s control. Why have
Casa Loma’s operations continued to be privately operated for over 70 years (+
20 more years) under a ‘sole- sourced lease, without ever allowing any open
public tender competition process?
*Torontonians (City) losses
in revenues (A-D) below estimated over $-49.360 Million under City’s Mismanagement
Agreement with Kiwanis Club of Casa Loma
Links are to the
City’s Manager’s report (EX21.4) ‘Management Agreement for Kiwanis Club of Casa
Loma’ endorsed at
Executive Committee on June 3rd 2008:
* [Link:
Complete Kiwanis Management Agreement.pdf]
(66 pages)
Highlights of Kiwanis Management Agreement:
A. The City will continue to invest their
budgeted $ 20 million exterior restoration project. City will be paying for
mechanical upgrades including installing Air Conditioning for Casa Loma,
building greenhouses and extensive renovations to abandoned derelict Hunting
Lodge (3,000 sq. ft.) located on estate.
Kiwanis has now been granted management of these buildings to generate
additional revenues. *(-$ 20 M costs to City )
B. (pg. 9) City is capping their lease
revenues to $ 800,000 annually out of the $ 5 to $ 6 million revenues Casa Loma
generates. The City is reinvesting 100%
of these revenues deposited into Casa Loma capital reserve fund for repairs and
restorations of the Casa Loma estate. (-$
16 M in 20 yrs.)
City will waive collection of $ 800,000. Revenues for 2008 *(-$800,000.)
(City has waived Kiwanis former annual lease fees of 1/3 of tourist’s revenues).
The City has waived
Kiwanis former lease fees of 7% of the gross revenues on venues held.
*(-$ 4 M in 20
yrs. $ 200K yr. dif in city’s former fees average $ 1M yr. now capped @ $800K)
C. (Pg. 3) City will now waive collection of Casa
Loma’s annual $ 178,000. Property taxes during their 20 year tenure. Due to the change in contract status to now
pay Kiwanis Management Fees which will
allow property taxes to be exempt under MPAC. * (-$3.560M + tax increases
annually)
D. (Pg. 8 #3) City will be paying Kiwanis
annual Management fees of $ 250,000. For 20 years term. This will pay for the
Kiwanis Club’s Charity status to cover future donations that were previously
paid from the $ 5-6 million annual revenues generated from Casa Loma
operations. *(-$ 5M in 20 yrs.)
“The management Agreement also requires both parties to act
as a prudent and diligent BUILDING OWNER in carrying out their respective
ongoing maintenance responsibilities for Casa Loma”.
E. (Pg. 55 # 16.1) General- Kiwanis status
will be changed from partner to independent contractor.
F. (Pg 8) Acquisition by the city of Casa
Loma’s Art and Artifacts’, equipment and intellectual property ‘including
trademarks acquired by Kiwanis over the years’. Valued at over $ 1.384 million
dollars to buy back all of Casa Loma’s furnishings and artifacts.
The city will be making annual payments to Kiwanis Club of
$ 50,000. + GST and accumulated interest over a 20 year term INORDER TO ASSUME
THAT THE CITY OWNS ALL ASPECTS of the physical aspects of the Casa Loma estate.
G. (Pg. 55 # 16.1) General- Kiwanis status
will be changed from partner to independent contractor.
H. (Pg. 5) Kiwanis Club’s new Casa Loma Board
shall now be equal, consisting of 7 members appointed by the city and 7 Kiwanis
members. (14 members, 3 year term).
The Chair will be
appointed from board members on the advice of the Kiwanis Club’s President and
approved by Mayor. (Therefore Kiwanis
still runs everything and they have written their own contract herewith to bind
the city for 20 years with a clause for renewal.)
(pg. 54 e) “Current CEO of Casa Loma shall be deemed to be
approved by the board” Why?
I.
(pg.
55) *Request for Proposal, already done by Kiwanis to be APPROVED by new
board…no further approval by the city will be required.
*Kiwanis Club has ‘already hired’ the Liberty Grand Group
to take over all catering of venues and entertainment operations at Casa Loma.
This was done as part of Kiwanis strategy to secure City staff and Council’s
approval to give a 20 yr. lease without allowing any competitive open tender
process for Casa Loma’s governance. In opposition to City’s CLAC report for NEW GOVERANCE.
J.
(Pg.
58) # 44- Contract Renewal Clauses. (For Kiwanis to continue their sole source
contracts that will be ending after 90 years since starting 70 years ago in
1936 until 2029.
City Manager’s recommendations (2 pgs.) [Link:
Executive Council Summary.pdf]
Note: Staff Report under Financial Impact: “… no direct cost to the City”
Kiwanis Club operates
as a non-profit organization; they will now also be exempted from paying Casa
Loma’s hugely undervalued property taxes of $178,000 annually. Why has city’s assessment of Casa Loma’s
estate taxes been so undervalued and bias in favour of Kiwanis Club’s during
their 70 years of leasing renewals? For
the next 20+1 years including 2008, Casa Loma’s property taxes will be exempt exclusively
for Kiwanis Club. Why?
Furthermore, Casa
Loma’s property value is more than $100 million. The city is losing massive
amounts of income over the next 20 years by exempting Kiwanis Club from paying
any property taxes. These taxes have always been unjustifiably low for Canada’s
irreplaceable 80,000 sq. ft. Edwardian Castle, especially if it’s located on 6 acres
within Toronto’s premiere Forest-Hill district.
Casa Loma is renowned as Canada’s famous castle generating millions in
profits annually to Kiwanis while costing the city $45 million over the next 20
years.
On top of the
exemption from the past property taxes paid, the city also plans to pay
$250,000 annually for the next 20 years, to Kiwanis as “Management Fee”. Under
their new agreement structure this will entitle Kiwanis to be exempted from
paying City property taxes altogether - for the next 20 years.
During the past 70 years Kiwanis has benefited from further
exemptions to Provincial and Federal business income taxes as they operate Casa
Loma under their ‘not for profit’ charity business status.
For this charity status, Kiwanis donates a meager 2.5% (two and a
half percent) to their ‘self interest’ charities out of over $5 million
annually received from their Casa Loma operations.
History of how the City took over Casa
Loma – 1930’s
Sir Henry Pellatt
builder of Casa Loma was ‘forced into bankruptcy by the City during the Great Depression
(1929). First the city in their political heist expropriated (without payment)
Pellatt’s private Toronto Electrical Company to form Toronto’s ‘Public’
electricity company that latter became Ontario Hydro.
Sir Henry Pellatt
was knighted by King George for building his power plant ‘on Niagara Falls’ to
bring electricity to Toronto. (Creating TTC’s Electric streetcar tracks).
Following the
City’s Public take over of Pellatt’s private hydro company, the city increased Sir
Henry Pellatt’s property taxes on Casa Loma’s by 25 times higher than his
castle’s former assessed value.
Colonel, Sir Henry Pellatt was forced into
bankruptcy by the City, losing his castle and all of his belongings within 10
yrs. of building his Casa Loma.
The City’s and Kiwanis Club’s Partnership
Agreement:
Why is it that
during these past 70 years, the city has been assessing Casa Loma’s taxes at 25
times under the estates property value, exclusively for the benefit of
Kiwanis Club since 1936?
It is a disgraceful
mockery to Sir Henry Pellatt’s legacy, Canadians and Toronto’s taxpayer that the
city has been structuring the past 70 years of ‘sole- sourced’ leases privately
awarded to Kiwanis Club.
With profits from
Casa Loma of $5 to $6 Million annually, why is it costing the city unjustifiably
excessive amounts of over $ 49 Million, hence bankrupting Torontonians? Why is
the city granting Kiwanis Club to be exempt from paying any taxes for both
property and business income in their operations of our very profitable castle?
Not only is the
city losing all potential property tax revenues from Casa Loma’s $ 100 Million estate, they are also in
a sole-source partnership with Kiwanis in monopolizing the control of Torontonians’
lucrative castle operations.
In May 2006,
Mayor David Miller - Chair of the Executive Committee, had recommended to City
Council NOT to renew or extend Kiwanis lease.
Kiwanis then hired Lobbyist Paul Sutherland - the former Deputy Mayor to
Mel Lastman, who successfully derailed city staff’s report to city councilors.
All of a sudden there was a complete change in staff directions, in opposition
to their own CLAC report recommendations to NOT RENEW or extend Kiwanis’ lease
ending September 2007. [Link: City’s
CLAC report]
In May 30th
2008, the ‘City Staff Report’ presented to the City Council that there is no
longer any reference to City Council’s commissioned 2 year report from the Casa
Loma Advisory Committee - CLAC’s report (May 2006) recommendations were to
replace Kiwanis management with new governance.
Kiwanis Club’s
Chair, partner at Weir and Folds law firm and lobbyist Paul Sutherland have
influenced the reversal of City Council’s decision in June 2006 - to disallow
further open tender process and give Kiwanis another 20 years lease on Casa
Loma.
Kiwanis have
taken claim to all of the rights trade name for Casa Loma’s, including
furnishings, Sir Henry Pellatt’s artifacts and everything that has been donated
over the past 70 years. The City’s Solicitor opinion to Kiwanis claims of
ownership is that the City owns the trade names and all property rights to Casa
Loma. Why is the City paying Kiwanis $ 1 Million for Casa Loma’s property owned
by the City? [Link:
Star-Trademarks Article]
For over 70 years,
the public have been convinced that Kiwanis Club owns Casa Loma since that
Kiwanis has been branding their name as: Kiwanis Club of Casa Loma and buying
all trade mark rights to Casa Loma - our 2nd largest tourist
attraction.
The question
remains: Who is willing to stand up
to the City and fight these injustices? Can anything be done at this time before
the city signs this detrimental private partnership agreement?
On June 23rd,
City Council WILL accept the attached Kiwanis Club of Casa Loma Management
Agreement unless something can be done to stop this injustice being made by our
Municipal Government.
For copies of the
City Council’s report, Management Agreement for the June 23rd of
2008’s Council meeting and press archives, please visit www.CasaLomaTrust.ca
Thank you for your thoughtful
consideration to help take back governance of our City’s Castle!
With kindest regards,
Trelawny
Trelawny Howell,
Great-grand Niece of Sir Henry Pellatt (Casa Loma)
T: 416 927-9866 Fax: 416 927-1825
Email: trelawny@sympatico.ca
Website: www.CasaLomaTrust.ca
*Links to city agreements:
Complete
Kiwanis Management Agreement.pdf and Executive
Council Summary.pdf