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A real-estate dispute in England resulted in the decision this week to make Toronto, not London, the site of the largest collection of Islamic art in the English-speaking world.

On Tuesday, Aga Khan IV, spiritual leader of the world's 15-million Ismaili Muslims, announced he was abandoning plans to build his planned palatial museum of Islamic art in the British capital. It would have occupied a landmark site on the Thames right beside the official residence of the head of the Church of England, across from the Houses of Parliament.

Now the museum is to be erected alongside a busy road in suburban Don Mills in northeastern Toronto, with "the intention to move forward on its design and construction as quickly as possible," according to the CEO of the Aga Khan Foundation of Canada.

Earlier this year, the Aga Khan, 65, had offered cash-strapped King's College London $60-million (Canadian) for a vacant section of land it owned adjacent to St. Thomas's Hospital. The sum was double the site's apparent market value and more than twice the $25-million that the hospital's foundation was offering for the same 1.8-acre parcel.

However, King's College called the Aga Khan's bid an "unsolicited offer," prompting an outcry by MPs, doctors and others who felt the land should go for medical purposes, not what some called "asset-stripping."

Last month, various staff members at St. Thomas threatened to resign or chain themselves to the perimeter of the disputed property if it were sold to ease King's financial troubles.

Representatives for the Aga Khan, in the meantime, said there would be space for medical facilities on the site even with the planned museum there, noting that the Aga Khan Development Network already runs 325 not-for-profit health centres and hospitals in the developing world.

The Aga Khan became the 49th Imam, or spiritual leader, of the world's Ismailis -- including an estimated 50,000 in Canada -- in 1957 and has a personal fortune reportedly worth billions based on real estate, horse-breeding and horse-racing. His attempt to buy the St. Thomas parcel followed a previous -- and failed -- effort, in 2001, to buy land for his museum in London. The location then was a medical college site near the Tate Britain art gallery.

However, on Tuesday afternoon, King's College voted to accept the much smaller St. Thomas offer and thereby permit construction of new medical facilities, including a nurses' training school, on the Thames site.

Hours later, in a press release, the Aga Khan announced the museum would now be built in Toronto on land currently occupied by Bata Shoe's head office, which has been for sale in recent months with an asking price of $10-million, adjacent to property the Aga Khan Foundation had purchased in 1999 for an Ismaili Centre.

"In situating these two institutions in Canada, we acknowledge both a tradition of tolerance and inclusiveness as well as an environment that has permitted diversity to flourish," the Aga Khan said in his statement.

Speaking yesterday from Ottawa, Nazeer Aziz Ladhani, CEO of the Aga Khan Foundation in Canada, said "Toronto was always in the running" as the location for a museum of Islamic art and manuscripts, and once London declined, "It became an easy decision . . . because Canada is foremost among the pluralistic societies of the world."

Ladhani said the Toronto announcement wasn't a last-ditch attempt to shame England into reconsidering its rejection. "There's no other purpose to that," he said. "This is a sure deal, I would say."

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