Muzik – the Exhibition Place nightclub that counts sports stars, music celebrities and Toronto Mayor Rob Ford among its clients – is looking to improve its decades-long deal with the city as part of an expansion that will change the face of entertainment on the lake shore.
Zlatko Starkovski, owner of the bar that operates on Saturdays in the Horticultural Building, has acquired new prominence because of visits by Mr. Ford to his club and the mayor's mention of a late-night phone invitation he received from the club owner. He is also seeking new terms for his lease from the city to solidify his goal of bringing hundreds more day-clubbers to Muzik.
However, there has been little public scrutiny of the man who has been running a business on city property for over 10 years. Members of the Exhibition Place Board told The Globe and Mail that they were not aware of aspects of his business dealings, including a past bankruptcy protection filing.
Mr. Starkovski has been a vocal opponent of the all-ages electronic dance events that were banned last month from the grounds, characterizing them as magnets for drug dealers and pedophiles. Councillors will be asked to overturn that ban Wednesday in a motion before city council, with opponents arguing the ban is about limiting Muzik's competition, not public safety. Later this month, Muzik will make a bid that would limit that competition even further, asking the board of Exhibition Place to beef up the protection in its long-term lease from other events on the grounds. The move would increase Muzik's exclusive rights to larger events – above the 2,999 limit it now has. It comes as Muzik is building three new pools and cabanas in an outdoor area with capacity for 5,654 people.
Given this latest request, area Councillor Mike Layton says it is time the city got some answers about the club and its owner. "Why would we open up the agreement without talking about money or anything else?" he asked. "We need answers first."
Mr. Starkovski has been a major tenant of Exhibition Place since 2003, but both its CEO, Dianne Young, and board chair Councillor Mark Grimes told The Globe and Mail they are not aware of his other business dealings. Those dealings include a stormy relationship with the owner of a Toronto strip club and related bankruptcy protection proceedings, later settled, involving a company owned by Mr. Starkovski and set up to operate Muzik nightclub, The Globe and Mail has learned. Both Mr. Starkovski and his spokeswoman did not respond to requests for comment.
Court documents that include a 2010 affidavit by Mr. Starkovski reveal he has been paying rent to the city that is below market value – a sliding scale that has fixed rent that tops out at $10,000 a month this year, with possible additional payments if sales hit a certain threshold. In the same affidavit, he also said that a 2010 real estate appraisal he commissioned described the location as a "jewel," estimating a "realistic" market rent for the venue, excluding the area outside, was $85,000 a month.
The terms of the lease, Mr. Starkovski said in court documents, were in part because of improvements he made to the property. In his affidavit, he indicated he had spent over $1.6-million on improvements between 2004 and 2010.
Ms. Young, the CEO of Exhibition Place, would not comment on the specifics of the 20-year lease, but said one of the benefits of the agreement is that the Horticultural Building will be kept in good condition. "Our interest is that they have good premises, so they have good businesses and also, to improve and maintain the base building. We cannot do that in our capital budget," she said.
In his drive to expand his business over the years, Mr. Starkovski has enlisted the lobbying help of former councillors and past members of the Exhibition Board, Joe Pantalone and Chris Korwin-Kuczynski (Mr. Korwin-Kuczynski initiated the motion to award Mr. Starkovski the lease). Mr. Starkovski recently hired Sussex Strategy to represent him in the fight to ban electronic dance parties.
While Mr. Ford has talked about his friendship with Mr. Starkovski, the club owner for his part has tried to distance himself from the mayor, issuing a statement last week saying they "are not close" and have not met "outside a professional setting."
Mr. Grimes, chair of the Exhibition Place Board, who supported Mr. Starkovski in his bid to ban the dance parties, said he has been to the club for events but knows Mr. Starkovski only as a tenant of the grounds.
"He's not my best friend," he said in an interview, adding that lease was signed before his time on the board.
Mr. Starkovski's business relationship with the city that has taken him from a 25-year-old aspiring entrepreneur living with his parents in a suburban home just north of Toronto when he signed the deal, to a high-profile nightclub owner who recently purchased a $1-million waterfront condominium.
From 2003, when he first got the Exhibition Place lease, to 2008, he was a director of a numbered company that owned the building that housed Club Paradise, a strip club at Bloor and Lansdowne in Toronto's west end. His father, Mike Starkovski, was also a director of the company until his death in 2006. The Telios family, which still owns Club Paradise, were also early financial backers of Mr. Starkovski, until a bitter court battle in 2010 over a $740,000 debt.
Mr. Pantalone was not on the Exhibition Place Board when the lease was awarded and has not done work for Muzik for at least a year. He noted that it was a near-unanimous decision by council in 2003 to finalize the deal. (He voted for it as a councillor and there were only two votes against, one by then-councillor Rob Ford).
"It was a deteriorating building. It really required a lot of work," Mr. Pantalone said.
Charles Khabouth, head of INK Entertainment and the club owner who began operating dance events at Exhibition Place last year, claims the Muzik expansion is the real reason behind last month's all-ages dance party ban.
Mr. Khabouth, who operates a lakeside pool bar in the Port Lands, said he was "flabbergasted" by the ban on the dance events and is fighting it. "It makes no sense," he said.
With research by Stephanie Chambers. Shannon Kari is a freelance writer.