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.
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