Direct Dial: (514) 847-4459
rcharlton@ogilvyrenault.com
URGENT
BY BAILIFF
Montréal, July 26, 2005
Ville de Montréal
Hôtel de ville
275, rue Notre-Dame Est
bureau 1.113
Montréal, Qc
H2Y 1C6
Attention: His Worship Gérald Tremblay, Mayor
and
Conseil de l’arrondissement Sud-Ouest
6039, boul. Monk
Montréal, Qc
H4E 3H5
Attention: Mme Jacqueline Montpetit, Mairesse d’arrondissement
Your Worship and Mme la Mairesse:
RE: « Czech Centre Inc. » - lots 1410 & 1411(part) Ste-Anne (arrondissement Sud-Ouest) – proposed resolution authorizing the construction of a hotel in virtue of the “Règlement sur les projets particuliers de construction, de modification ou d’occupation d’un immeuble”
Our client, Cornell Trading, Inc., the owner of the property adjacent to the above-referenced lots, has asked us to communicate with you with three purposes in mind. First, for the reasons more fully described further below, we request that the above-referenced resolution be withdrawn or defeated and that the proposed construction permit not be granted to the applicant, Centre Tchèque Inc. (or its assignee or representative).
Second, our client wishes to emphasize that it seeks to participate in a collaborative process with the City and all other interested parties in order to ensure the best development of this important historical area surrounding the Lachine Canal, and this in conformity with the spirit and letter of the Plan d’urbanisme of the City of Montréal and the Lachine Canal Management Plan of Parks Canada.
Third, should the requests made herein not be granted, we have been reluctantly instructed to institute the appropriate legal proceedings against all those responsible for the adoption of the proposed resolution and the issuance of such proposed permit, the whole without any further notice or delay.
This matter is urgent as we have been led to believe that the subject resolution will be presented for second reading at the next meeting of the Conseil de l’arrondissement Sud-Ouest on August 2, 2005.
Summary
The subject Lot has been the focus of recent media attention arising from both the unusual grant, in August 2002, by the Crown (Minister of Canadian Heritage acting for Parks Canada Agency) of a 99 year emphyteutic lease (“Lease”), for the sum of one dollar, to a previously inexistent and clearly unknown organization, “Centre Tchèque Inc. – Czech Centre Inc.” (“Applicant”), and the subsequent attempt by such Applicant to build thereon what is clearly a substantial “for profit” hotel. Public interest has been heightened by the fact that the Lot is located within the national historic site of the Lachine Canal near the proposed site of the Loto-Québec/Cirque du Soleil development in the Peel Basin.
It is submitted that the present requests should be granted insofar as:
(a) The Applicant is clearly in material breach of its Lease;
(b) The subject application contains serious misrepresentations;
(c) The Applicant gives no guarantees as to community rights;
(d) The proposed resolution (and permit) do not satisfactorily address the environment;
(e) The proposed resolution (and permit) are contrary to the Plan d’urbanisme;
(f) The proposed resolution (and permit) are contrary to the Parks Canada Lachine Canal Management Plan;
(g) The City would be ignoring other and better options;
(h) The timing of the proposed resolution and improper notices are cause for concern;
(i) It would be politically and legally unwise for anyone to support this tainted project which appears to be contrary to the good faith and public interest requirements of the law;
(j) The City has the requisite discretion to refuse the application; and,
(k) The City has the legal obligation to refuse the application.
The Cornells
Our client is the registered owner of that property bearing civic address 108 Gallery Square, Montréal. Its property is located immediately beside the above-referenced lots (the “Lot”). For the reasons described herein, the adoption of the proposed resolution and the issuance of the proposed construction permit would be not only contrary to law but also very prejudicial to the legitimate rights and interests of our client, as well as those of the population of the City of Montréal in general and of the arrondissement Sud-Ouest in particular.
The principals of our client, April and Chris Cornell, are well known, highly respected and successful native Montréalers who, over the last thirty (30) years, have built up from nothing a major international manufacturing, wholesale and retail business (e.g. “La Cache” on Greene and Laurier Streets in Montréal) which now employs more than one thousand (1,000) people.
They also have an irreproachable reputation as substantial and “hands on” philanthropists for the benefit of the underprivileged, including through the establishment, financing and administration of schools in India.
As the immediate neighbour of the Crown, our client had and has every right to expect a cooperative and forthright relationship with it and with the City of Montréal. This is especially the case in circumstances where all three parties share a common interest in the appropriate development of this important area in keeping with the official goals of Parks Canada and the stated vision of the City of Montréal, the whole in the best interest of the public.
1. The Applicant is in default of its Lease
Of incontestable immediate interest is the fact that the Crown has now publicly declared that the Applicant is in default of its obligations under the Lease in at least two very important (and obvious) respects and has now taken the steps required under par. 14.2 of the Lease to seek its resiliation.
(i) Proposed hotel is contrary to the stated purpose of the Lease
First, the proposal by the Applicant (as reflected in the proposed resolution) to build what is clearly a substantial “for profit” hotel contravenes the stated purpose of the Lease: the erection of a “centre for the activities of the Czech Community and other communities” (par. 7.2 of the Lease).
For the moment, if one is to rely on the terms of the Lease, there is every appearance that both the Crown and others have been seriously misled regarding the true purpose of the Applicant which purports to be a “not for profit” entity. It is self-evident that the proposed building does not constitute a community centre even by any rational stretch of the imagination. In fact, on June 29, 2005, during the “assemblée publique de consultation” of the arrondissement Sud-Ouest, it was confirmed that there was not even any space within the proposed building exclusively reserved for the Czech (or any other) cultural community.
Furthermore, during such meeting, Mr. Jean Durcak, a well known and long-standing representative of the Czech community in Montréal, stated that the principal of the Applicant, Mr. George Syrovatka, as well as the Applicant itself, are not and have never been recognized in any way as representatives of the Czech community in Montréal. Mr. Durcak clearly disassociated himself and his community from this project, the very existence of which had been withheld from him until very recently.
(ii) The Applicant has failed to remedy environmental problems prior to August 29, 2004
It is also self-evident that the Applicant has failed to meet its obligation under par. 8.2 of the Lease “to remedy the environmental problems specified in the Environmental Site Report and to carry out the appropriate restoration work to the Immovable at its own cost within a delay of twenty-four (24) months of the date of signing of these presents”. In fact, no “restoration work” of any kind has been carried out on the Lot despite the fact that we are now more than thirty-four (34) months past the date of the Lease (August 28, 2002).
During the meeting of June 29, 2005, it was suggested by an elected representative of the arrondissement that this unusual delay was due to the fact that such environmental restoration work required the very construction permit presently under consideration. With all due respect, such an explanation is both inaccurate and irrelevant.
It is inaccurate because the Applicant could easily have sought and obtained the requisite approval to carry out the restoration work and could have completed same within the stipulated delay of twenty-four (24) months. It is the Applicant that chose not to do so. Indeed, it is the Applicant that chose to tie (if at all) such environmental work to the issuance of the much wider permit now under consideration. In any case, the Applicant has only itself to blame for waiting almost fourteen (14) months before making the present application (October 24, 2003).
In addition, the stated excuse is irrelevant inasmuch as the Applicant knowingly bound himself to such a term and cannot now blame its default on others.
2. The application contains serious misrepresentations
In light of earlier comments, it would appear that the Applicant has made material misrepresentations in its application. This is further demonstrated by a review of the « Système de gestion des décisions des instances - Sommaire décisionnel » dated June 7, 2005 issued by the City of Montréal which indicates that it is precisely on the basis of such misrepresentations that the application has to date received certain favorable internal recommendations and first reading approval. For example, the Applicant is not, as misstated, the « Centre culturel Tchèque » but rather the « Czech Centre Inc. », a legal entity created for the only purpose of building the proposed hotel. The purpose is obviously not to « faciliter les échanges internationaux dans divers domaines tels la culture, les sports, l’éducation, la recherche et développement, (…) » but rather to foster profits for an undisclosed hotel investor.
3. The Applicant gives no guarantees as to community rights
In addition, the proposed resolution (and permit) do not contain any guarantees as to the allegedly community oriented purpose of the project. As noted, no space is exclusively reserved for such purpose. No minimum time is guaranteed for any community activities. In summary, there is nothing that ensures the use of the premises any different than that applicable to any ordinary hotel.
4. The proposed resolution (and permit) do not satisfactorily address the environment
It is also remarkable that the proposed resolution (and permit) do not specifically require that the site be decontaminated prior to the issuance of the proposed permit. During the meeting of June 29, 2005, it was suggested that such a condition was so obvious that no stipulation was required. With respect, this is ill-founded, both in fact and in law.
A careful reading of the proposed conditions described in the « Sommaire décisionnel » reveals numerous conditions of far less importance than decontamination, yet it is notably silent in respect of the environment. Such a serious omission is aggravated by the fact that the proposal requires, prior to the issuance of the proposed permit, a $50,000 guarantee to ensure that the appropriate landscaping be done, and yet requires nothing to ensure decontamination.
In short, under the proposal the priorities required by law are simply not being met.
5. The proposed resolution (and permit) are contrary to the Plan d’urbanisme
It is further submitted that that the project runs afoul of the Plan d’urbanisme, contrary to the legal requirements of the « Règlement sur les projets particuliers de construction, de modification ou d’occupation d’un immeuble ». Examples of this have been given above.
A further example would be the fact that the proposal would create “massing” which would result from the construction of a building covering essentially the entire surface of the Lot. This would completely block off access to two existing parks located behind the subject property.
6. The proposed resolution (and permit) are contrary to the Parks Canada Lachine Canal Management Plan
The May 2004 Parks Canada Lachine Canal Management Plan provides for the coordination between interested parties, including the City and property owners, of “development projects” to “ensure coherence of interventions for the entire Lachine Canal corridor” (p. 67). The Plan d’urbanisme and related documents confirm the importance of such co-ordination.
Please note that we have recently communicated with Parks Canada to seek a meeting to further explore common interests and expect to hear from it shortly. To the extent the City chooses nevertheless to proceed with the project, we would be faced with a series of disconnected and contradictory initiatives. This could only be detrimental to the public interest.
7. The City would be ignoring other and better options
In addition, by proceeding with this project, the City would be missing the opportunity of considering other and far better possibilities. For example, assuming the Lease is resiliated, as it should be, Parks Canada may choose to allow the property to be used as a park, thus permitting public access from the Lachine Canal to the two parks behind the Lot. This would certainly be in conformity with both the Plan d’urbanisme and the Parks Canada Lachine Canal Management Plan and be beneficial to the public.
Another example would be our client’s proposal to build a mixed use commercial and residential building which could include, subject to the approval of both the City and Parks Canada, a swap of portions of the Lot and our client’s property such that:
(a) the public would be given a more direct and aesthetic access from the Lachine Canal to the two other parks, as initially foreseen by planners;
(b) a portion of the proposed building would be designated for the exclusive benefit of the community; and,
(c) the disadvantages of “massing” would be avoided, contrary to present plans which would result in two contiguous buildings (the two envisaged by the Applicant and our client) covering the entire block fronting on the Lachine Canal.
8. The timing of the proposed resolution and improper notices are cause for concern
Generally accepted planning principles include the need to consider the development of the subject Lot in the overall context of the affected area in consultation with all interested parties, including our client. Clearly, this has not occurred in the present case, despite the fact that our client’s property is located immediatley adjacent to the subject Lot and is specifically identified in most, if not all, development maps of this important area.
Even more troubling is the appearance that the proposed resolution is being handled such as to avoid proper analysis and consultation. You will recall that the proposed resolution was first presented for public consultation in January 2005. It was subsequently decided to suspend any further consideration of it inasmuch as Parks Canada had advised the City that it was reviewing the Lease and the Applicant’s apparent failure to respect same.
Despite this, and without any further consultation or advice, our client learned by chance that, on June 7, 2005, the City had changed positions and had given first reading approval to the proposed resolution. Furthermore, it learned that a public consultation had been fixed for June 29, 2005 at a time when many people are on vacation. To aggravate matters, the notice to the public was improper thus leading to a shorter notice period than is usually the case.
No explanation has been given for this new persistence of the City.
• Why pursue the matter when it is now publicly known that Parks Canada has declared that the Lessee is in default of the Lease?
• Why should it be suggested that Parks Canada’s position is not relevant when the City clearly considered it relevant when it chose to suspend matters earlier this year?
• Why bring this matter up for second reading now when, as a result of the facts and arguments raised during the public consultation of June 29, 2005, the City chose not to proceed to second reading as originally planned on July 5, 2005?
• Why proceed when even the identity of the true financial backer of the subject project is unknown?
• In summary, why proceed at all with the proposed resolution when it is so clearly contrary to the public interest, proper planning principles as well as our client’s legal rights?
At best, the City’s position is most perplexing.
9. A tainted project contrary to good faith and the public interest
It is accepted law that in adopting a resolution, a municipality must act in good faith and in the public interest. Therefore, it cannot completely ignore the circumstances that gave rise to this remarkable gift made by the Crown to the Applicant in 2002, at a time when the Crown advised our client that it had no intention of permitting, or even discussing, the development of this Lot. It would be both politically and legally inappropriate to ignore the facts surrounding the proposed project especially in light of the disturbing apparent similarities between such a gift and certain other events disclosed during the hearings of the Gomery Commission.
In that regard, there can be little doubt that the decision to dispose of valuable public property in this way must have been made at the political level. As such, federal officials will no doubt be the subject of numerous pointed questions including in respect of the role played, if any, in the granting of this extraordinary Lease by the former Minister of Public Works Alfonso Gagliano and the former Member of Parliament for Verdun-St. Henri Raymond Lavigne.
At the municipal level, questions will also be asked as to why any elected municipal official would support such a project especially now that many troubling facts have become public. In particular, such officials would have to explain how the adoption of the proposed resolution (and the granting of the permit) would meet the good faith and public interest conditions required by law of any municipal resolution.
10. The City has the requisite discretion to refuse the application
For the reasons given, it should be obvious that the City of Montréal should not want to associate itself in any way with the Applicant’s project. At the very least, one would expect a responsible municipality to defer consideration of the application until such time as all of the above issues have been either clarified or resolved. As noted, to do otherwise would necessarily raise some very serious questions.
From a legal standpoint, we submit two points in that regard. First, the City is well within its rights to refuse the application at this time. Second, it has no legal right to approve the resolution or to issue the proposed permit.
As to the first point, it has been suggested that the City must proceed with the proposed resolution, failing which it might face the risk of legal proceedings instituted by the Applicant. We submit that this is not a valid concern.
Let us recall that the City is being asked by the Applicant to permit a derogation from the « Règlement d’urbanisme 01-280 » of the arrondissement Sud-Ouest. By law, such permission is discretionary. The Applicant has no right to require that such resolution be adopted or that the subject permit be issued. It has no basis in law to complain if, in the proper exercise of its discretion, the City chooses to reject such application.
The least that can be said is that, in the exercise of such discretion, it is quite appropriate, in law, for the City to consider the points raised above and, on the basis of one or more of such points, to reject the subject application.
11. The City has the legal obligation to refuse the application
That having been said, we submit that the City has no legal option other than to withdraw the resolution or to dismiss the application. While the question of permitting a derogation is discretionary, such discretion cannot override the legal requirement that any such derogation be in conformity with the law including, for example, that it be in conformity with the Plan d’urbanisme. Furthermore, any such discretion must be exercised reasonably. For the reasons mentioned above, the granting of the application would constitute an abusive and improper exercise of such discretion.
Conclusion
In light of the above, you are requested to withdraw or reject the above-referenced proposed resolution and refuse the issuance of the construction permit sought by the Applicant, Centre Tchèque Inc. (or its assignee or representative), and to give further consideration to the development of this area in conjunction with all interested parties, failing which our client has regretfully instructed us to institute the appropriate legal proceedings against all those responsible for the adoption of the proposed resolution and the issuance of such proposed permit, the whole without any further notice or delay.
We are confident that such proceedings will not become necessary. In that context, our client and its principals look forward to an open and cooperative relationship with the City of Montréal, the Crown and other interested parties, the whole in the best interests of all concerned.
You are requested to respond in writing to advise of your position prior to 5 p.m., August 1, 2005.
Yours truly,
Robert P. Charlton
Senior Partner
c.c. M. Robert Bousquet, Conseiller de la ville (Émard), Conseil de l’arrondissement Sud-Ouest, 6039, boul. Monk, Montréal, Qc H4E 3H5
Mme Line Hamel, Conseillère de la ville (Louis-Cyr), Conseil de l’arrondissement Sud-Ouest, 6039, boul. Monk, Montréal, Qc H4E 3H5
M. Pierre Bourque, Chef de l’opposition, Hôtel de ville, 275, rue Notre-Dame Est, bureau R.112
Montréal H2Y 1C6, pbourque@ville.montreal.qc.ca
