More Scandal At City Hall

Aren’t you just so happy you voted for Tremblay?

City sold land valued at $7M for $2.4M
Bureaucrats, Politicians fumbled chances to sell tract for significantly more than Montreal finally got
Linda Gyulai, Gazette Civic Affairs Reporter

MONTREAL – Two administrations at Montreal city hall – under two mayors and over two decades -contested, ignored or suppressed various appraisals that would have seen the city sell a large tract of land it owned in Terrebonne for a higher price than it finally went for in 2005.
The city sold the 12.44 million square feet of farmland in Terrebonne that once housed its municipal tree nursery for $2.432 million to the firm Cote de Terrebonne SEC in October 2005, just before the November election that returned Mayor Gerald Tremblay for a second term.
The site, about one-quarter the size of Nuns’ Island, faces the Mille Iles River and lies near Highway 25 and the future Train de l’est commuter rail line linking Montreal and the North Shore.
A report by Montreal’s civil service to the city executive committee at the time of the deal described the property as “surplus” municipal land that was selling for about the equivalent of its municipal valuation to Cote de Terrebonne, a company financed and managed at the time by the Fonds Immobilier de Solidarite FTQ Inc., the real-estate investment arm of the Quebec Federation of Labour’s Solidarity Fund.
What it didn’t say was that the Fonds Immobilier was buying the property to develop a residential housing project with a private businessman, Antonio Accurso.
And it didn’t say the land had been valued as high as $7 million a decade earlier.
Accurso made headlines last year when it was revealed that he entertained officials of the Solidarity Fund, a venture capital fund, and the QFL on his luxury yacht. Frank Zampino, who was Montreal city executive committee chairperson from 2002 to 2008, acknowledged vacationing twice on the yacht -including while Accurso’s company, Simard-Beaudry Construction, was part of a consortium bidding on the city’s now-cancelled $355.8-million water-management contract -but he said he paid for his expenses.


It wasn’t the first time the city tried to sell the tract of land in Terrebonne.
In summer 1998, while Pierre Bourque was mayor of Montreal, the city listed the Terrebonne farmland for $4 million on the multi-listing service of the Greater Montreal Real Estate Board.
The city executive committee wound up turning down an offer of $2.5 million for the land. The offer was $60,000 more than the selling price in 2005, even though the real-estate market had become red-hot by that point.
Details of the scuttled deal are in a civil lawsuit filed by a real-estate agency, Immeubles Beaurom Ltd., against the city, seeking payment of a $90,000 commission the agency said it lost when the city halted the sale of the farmland. The Quebec Court of Appeal ruled against the company’s claim in 2007.
Internal city memos written in the 1990s that were entered into evidence in the Immeubles Beaurom suit reveal the city ignored or challenged a slew of municipal and private assessments that had placed the value of the land far above the $2.5 million offered in 1998.
The city also ignored the advice of its own civil service to sell the land in parcels to fetch a higher price.
The city of Terrebonne evaluated the land at $7.397 million on the 1996-98 assessment roll, a March 1998 memo from the then director of Montreal’s parks department, Lise Cormier, to Gerard Divay, city manager at the time, reveals. Montreal contested the evaluation, then negotiated with Terrebonne to bring it down to $2.175 million. The municipal valuation climbed slightly, to $2.441 million, by 2005.
The memo also reveals that a private assessor had pegged the market value of the land at $6 million in 1995.
But that private appraisal “contained errors,” Cormier wrote in the memo. The value was then “corrected” to the range of $2.9 million, she wrote. The city’s real-estate department had sought out the private appraisal to examine a potential land swap at the time.
In an April 1999 memo, a chartered assessor working in the city’s real-estate department described how his department had initially set the market value of the farmland at $1.7 million, or about 13.7 cents a square foot. Assessor Denis Sauve’s memo, however, also said Cormier found the assessment too low, so more research was conducted and opinions sought, including that of Terrebonne’s valuation department.
Three comparable sales of farmland with housing development potential were found in nearby Assomption. The sales were for an average price of 41 cents a square foot, about three times what the city’s real-estate department suggested for the Terrebonne land, the memo said.
Still, Sauve found the 41-cent price high, given that the buyers in each case were foreign investors. He concluded it was impossible to determine the market value because the site was so large.
Instead, Sauve urged the city to sell the land in blocks at the same time to multiple buyers to generate a higher return, the memo reveals.
The city ignored the advice.
Michel Nadeau, the city of Montreal manager responsible for real-estate transactions, was unavailable yesterday and would answer The Gazette’s questions about the land deal today, city spokesperson Gonzalo Nunez said.


Meanwhile, the farmland is in a coveted area for housing development.
The city of Terrebonne says it’s in the final stages of designing a master plan for development of the sector known as Cote de Terrebonne.
The Terrebonne development plan is expected to unleash another spate of residential construction. Terrebonne city councillor Marc Campagna, vice-chairperson of that city’s executive committee, announced this year his city expects 800 residential units to be built in each of the next four years at an average price of $250,000 per unit.
Diane Legault, a spokesperson for Terrebonne Mayor Jean-Marc Robitaille, said there’s a moratorium on rezoning and development in the sector, pending a sustainable development plan that has been in the works for four years. The area, covering 131 million square feet, is southwest of Highway 640 and includes the former Montreal tree nursery. The plan is to be unveiled in 2011, she said.
The former Montreal tree nursery is currently zoned for conservation.
“No doubt we were buying it for a residential development project,” Josee Lagace, a Solidarity Fund spokesperson, said Friday.
“There’s only this land for residential development in Terrebonne.”
It’s unclear if the land’s owner, Cote de Terrebonne, has filed for a zoning change. Legault told The Gazette to file an access to information request to confirm information given to the newspaper that Terrebonne had already changed the zoning of the site a few years ago and was forced to change it back because it didn’t respect the region’s land-use plan.
The Fonds Immobilier created Cote de Terrebonne SEC in June 2005. The investment fund had an agreement in writing with Accurso “from the beginning” to have him develop the land and act as representative of the company -for instance, to seek a zoning change from the city of Terrebonne, Lagace said.
Accurso was to invest financially once a project was developed, she added. The investment fund had partnered with him in other projects since 2000, she noted.
The Solidarity Fund sold its in the company to Accurso in August, Lagace noted. It’s part of a gradual disengagement by the QFL investment fund from its partnerships with Accurso that began two years ago, before the scandals, she said. It’s by mutual agreement, she added; Accurso requested the liquidation because he was preparing to transfer ownership of his companies to his children.
Though the Quebec business registry records still list the Fonds Immobilier as the limited partner financing Cote de Terrebonne, Lagace said it’s an error because the investment fund pulled out in August. Solidarity Fund president and general manager Normand Belanger and Linda Simard, its vice-president of legal affairs, signed a sworn affidavit Friday that was then sent to The Gazette to attest that the investment fund is no longer involved in any way in Cote de Terrebonne.
Accurso did not return The Gazette’s calls.


It’s unclear what prompted the city of Montreal’s decision to suddenly try to sell “surplus” municipal land again in 2005. The 2005 civil service report said the market value of the farmland had been appraised at $1.97 million if sold quickly “as is,” and otherwise at $2.625 million, in contradiction of the previous higher assessments.
The report said the city chose to sell the land without bids to the Solidarity Fund because the two had an agreement calling for the city to buy an office building from the Solidarity Fund in the Cite multimedia, near Old Montreal, to house some municipal departments. The proceeds of the sale of the farmland could be put toward buying the office building, the report said.
The scuttled 1998 sale is also shrouded in questions.
The city executive committee in August 1998 had decided to buy a farm in Assomption from the federal government to move the tree nursery. The resolution made the purchase conditional on selling the Terrebonne land, which launched the city on a quest to find a buyer.
Even though the city halted the sale of the Terrebonne land abruptly in 1999, it nevertheless bought the 8.3-million-square-feet Assomption property for $700,000 in June of that year and moved the nursery to Assomption over the next two years.
Jean Fortier, who served under Mayor Pierre Bourque as city executive committee chairperson from November 1998 to 2001, said publicly last year that shortly after his election to council in 1998, he turned down an offer of $100,000 in cash from a businessman he later learned was tied to the Mafia who wanted him to guarantee the sale of the Terrebonne land to him.
“I said my only interest is to have it sold at fair market value,” Fortier told The Gazette last week.
He added that he blocked the sale when he learned it would be for far less than market value. When told of the evidence in the civil lawsuit of a $2.5-million final offer on the land, however, Fortier said the civil service never brought it to the executive committee for approval.

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