Backstory: Should the Town demolish the 43 year old Hollingsworth Arena and sell the land to a developer - San Michael Developments - to bring high rise residential and commercial to Davis Drive, a stone’s throw from Southlake Hospital?
The Town has been looking at two options for replacing the ageing ice rink. The favoured option is to partner with Pickering College. The alternative is to build another ice pad at the Ray Twinney Complex. (See items 7 and 8 in the Committee of the Whole agenda here.)
At Tuesday’s Committee of the Whole (20 October) councillors get a presentation from San Michael’s swashbuckling Sandro Sementilli, his black hair tied back in a little pony tail. He is a big, brash, solidly built guy who is making the Town an offer they can’t refuse. He is cut from a different cloth from your average run-of-the-mill developer. He says in a matter-of-fact way that invites no contradiction: “I am a dreamer and I am a doer!” neatly summing himself up in nine words.
I find myself wondering how the Mayor would describe his very essence in nine words.
Mr Sementilli wants to create a big site, ripe for redevelopment, bringing together three adjoining parcels of land: Hollingsworth Arena owned by the Town, 693 Davis Drive at the corner of Patterson and Davis which he owns and land at 713 Davis Drive owned by a certain Dr Lee. There will be 12 to 15 storey towers on the Davis Drive side of the development with townhouses of two and three storeys shading towards the existing residential. And there will be a park.
Earlier this year, the Town dipped its toe into the water but, before taking the plunge and selling the land, it must first (a) decide on a replacement option for the arena and (b) formally decide that the land it owns is surplus to municipal needs.
The developer’s presentation
I am now watching Sementilli gearing up to make a big sales pitch. He knows which buttons to press and the egos to stroke.
“I want to thank the staff that are here and the staff that are not here, behind the scenes. They’ve shown a high degree of professionalism and I appreciate that.
“I want the support of every single councillor here. It is a kind of a bold statement but that’s what I’d like. I also expect that only because there has been no stone unturned. It’s been more than a couple of years that we’ve been working on this.
I’m gonna make it happen
Sementilli says modestly: “Newmarket is a town waiting to happen and I am here to make it happen.”
Now we are looking at the screen and listening to his syrupy commentary. We see a variety of important looking logos.
“Look at McQuat Partnership. That’s a company that’s a second generation firm. They’ve opened up 2,000 locations. 2,000 sites (similar to) what I am proposing. So they have experience. Leanne McQuat, she is in her forties, she’s never driven a car. She has a chauffeur to drive her around. She does not need my money. But she chooses, she chooses to work with me. It’s a choice. And there’s builders and developers they’ve said no to. Even prominent builders and developers.
“The PMS Realty Group. Second generation. Sold $3 billion of real estate. The same. He doesn’t need to work with me; he chooses to…
He takes us to the logo of his construction partner Brookfield: “They are helping me value engineer the site.”
“I believe in relationships. That’s what makes me successful.
I have eliminated the risk – but not totally
Sementilli goes on: “Not only have I defined and managed the risk, I have eliminated it…. The risk has not been totally eliminated, it has been transferred onto our shoulders – not the Town’s shoulders.
Now he is talking about getting the money from the banks to make it all happen and the conditions the bank will impose. He personally guarantees any cost over-runs. The bank will insist on proper zoning being in place and verified. And the bank will have to be satisfied Sandro Sementilli has the money. We hear the bank will hire a third party to review the budget and costs. He insists the conditions are very stringent.
"Why do I wanna be a developer after looking at this (the conditions to be imposed by the bank) I don't know. The conditions are very very stringent and when I say this is a no risk offer this is what I mean... until the time that I can come to you and satisfy you that I have all the money in place - not to buy the land - that is insignificant relative to the size of the project - but to build a tower and a town square. Until I have that in place I don't own the land. I don't tear down the arena. I don't do anything. I just continue to spend money. And how much money am I gonna spend? Just to get a commitment from the bank is to cost us about $300,000."
This must remind Van Bynen of his old bank manager days, slapping millions of conditions on borrowers.
“We’ve got a limited time period to execute it and if we don’t it’s too bad for us. It requires a lot of money and the risk has been taken on our shoulders and that’s the only way I can make a deal with the Town. And I don’t have a problem with that because I believe in me. And I believe in my team and I am willing to satisfy you by showing you the money.”
The councillors’ response
Now Joe Sponga tells us he is really impressed with Sementilli having seen him in a local coffee shop talking to business owners. Really impressive! Now he is wandering all over the shop before telling us: “I totally understand the development industry.”
Now an increasingly exasperated Mayor is testily asking Sponga for a question.
Sponga sails on regardless:
"I have total faith in you… (I cringe as I wonder what on earth is coming next) and you and your esteemed partners are going to make a healthy profit.”
Sponga tells us the York Region Fire people are having difficult finding a place for a new Fire Station because of the soaring value of land and there isn’t much left that is undeveloped. He says there is no need to incentivize development, “when money is to be made it is going to happen”.
Now he gets to the nub of it all.
"I don’t believe in selling public land used for recreational purposes.”
Oh no! Mr Sementilli is not going to like that one bit. He expects the support of every single councillor. He said so only a few moments ago. We are gonna hear his knuckles crack!
Now it is Tom Hempen’s turn. He wants an assurance that these promised high density towers will actually happen. He gently reminds everyone that the Council has approved high density development in that past and nothing materialised. As he speaks I think of Slessor Square in his own Ward 4, one of many over-hyped developments that were little more than promises. Hempen wants the full details of the conditions of financing handed over to the Council and staff.
“I’m gonna be straight with you” says Sementilli.
One tower or two?
The presentation and the artwork from architect Harry Kohn clearly show two towers not one. Yet Sementilli keeps stressing one tower. I am wondering why no-one picks up on this. (It must be something discussed in the secret session.)
“I want to get confirmed money from a lender. It’s open book. I won’t hide it from you. My offer is based on the fact that only until such time as one tower and the town square – and you don’t really care about the back so that doesn’t matter – the main concern is… my understanding is at least having one tower going and town square and I am willing to provide evidence of that before we close on the land. So if I can’t provide evidence of that I don’t want it. Why would I want it? It doesn’t make sense. But I am willing to spend all the money to get there. So that’s why I say it is no risk. We will spend the time and money necessary to satisfy you. You will get the Tower. You will get the Town Square.
Hempen insists he will be looking for evidence that everything stacks up.
“In the offer in the Letter of Intent, our legal relationship, it is going to be right in there. If I can’t do that then I don’t buy the land. But if I can, I do. If I can do what I propose to do I am gonna do it. And nothing will stop me – not in a bad way. What I mean is this. What I show you also. If, for any reason, I can’t do it the bank will step in and I have provided Bob Webb with evidence of more than one bank, more than one lender. What they do is this. The reason we sign everything over is because, if for any reason my brother and I cannot finish what we started, the bank will finish what we started. So you can rest assured that once a shovel goes in the ground and a bank is engaged there ain’t no turning back. It is gonna happen. So there should be no fear on your part. That’s what is gonna happen and it will be legal. I am not just coming here telling you a story. It will be legal. It will be in our legal agreement.
Predictably, the developer’s friend, Dave Kerwin, says he has no qualms selling off property the Town no longer needs. There are precedents which he cites.
Christina Bisanz gets down to basics. She says the big concern is selling off public land. That's what makes everyone nervous. She doesn’t want to sell four quarters for a dollar. She wants a measurable benefit for the community. But if the deal with the Town goes pear-shaped and doesn’t proceed, would Sementilli develop the land at the corner of Patterson and Davis Drive that he owns? She says it is in a prime location and is valuable.
The theatrical Sementilli is clearly expecting the question:
“We will develop that (land) but it is not in my heart.… I could have developed that a long time ago; I could develop it tomorrow. I am totally in conformity with the Secondary Plan, Official Plan… I could do it with my eyes closed. But that’s not why I am here. You know when we look at this – you mentioned with or without me – there is a big difference. With me it is up here. Without me it is down there. Let me show you why. It is pretty simple. There is the Town land. There is Dr Lee. We have assembled three parcels of land.
Now he trains his gaze on Joe Sponga. With the braggadicio that comes easily to him, Sementilli continues:
“ So I don’t agree with you Cllr Sponga because yes you could always do something with that Town land. But what are you going to do with it? It is my back yard. I know it is Dr Lee’s back yard. And we are here today and we are here now. It is an incredible, perfect opportunity that won’t last forever. And what are we here to do? We are here to do a lot of things. The back land (the land owned by the Town).… Very wisely the new Secondary Plan gives a provision for density transfer so what that means is that even though the back will not have a lot of density we can take that density and put it on the front. Now what does that mean? (Newmarket’s former senior planner Marion Plaunt explains here.)
Developers make a lot of money, so what?
“Does the developer make money. Absolutely. But relative to what we make – we make a 20% return – it is not that much for the risk. Monetarily it is a lot of money. Sure. I you are gonna spend $100m you are gonna make a lot of money. It is just a monetary thing and I am sorry you don’t look positive towards developers because I look positive to them. But anyway, regards the opportunity here, is this. There’s three pieces of land I have assembled and I have assembled them today and that is why I am here.
“I will develop the front. So if I develop the front what is going to happen? I can guarantee Dr Lee, until he dies, will not develop that ugly building and if he was here he would agree. He won’t do it. He’s been there since 1973 and he bought it in 1976. He makes a quarter of a million dollars every year by doing nothing just opening up the doors. So he is not going to change. But when I went to see him and it took three meetings, three hours and I shook his hand. We made a deal and he said, you know, I love what you are doing. Newmarket needs it. I love Davis Drive. I love Newmarket. I became wealthy in Newmarket. It has been good for me and I want to stay on this corner and I am gonna be part of your development. I am going to live and work in your development.
Town owned land not that valuable says Sementilli
“That’s the deal I made with him. That is what we are talking about. That is exactly what we are talking about. So will I develop? Sure. If I have to do it I will (develop just the land he owns). But guess what? I really don’t see why. I can’t see why. You own a piece of land. The Town owns a piece of land. I don’t really think it’s that valuable. What is valuable is what I put together. The Masterplan. You can have other people assess it and look and see what it is worth. I don’t think it is that valuable.
Now the Mayor thanks him for his presentation.
Councillors retreat into closed session
After a long closed session running from 3.30pm – 5.15pm the Council reconvenes in public. This is what we learn.
Taylor for a deal
John Taylor is in favour of the proposed development, but with qualifications. He wants staff to “continue negotiations” with San Michael Homes Developments rather than “finalise” them. This gives the Town more room to consult the public and win over a few doubters such as Kelly Broome-Plumbley.
Taylor says it is important to pursue this opportunity…
“We have a real opportunity here to take a building that is near the end of its life cycle – the Hollingsworth Arena – and to take a piece of Town owned land on the Davis Drive corridor that can help us achieve the kind of growth we want which is not to impact existing neighbourhoods but to direct development to the corridor which we have been saying for a decade now through our Official and Secondary Plans…”
Taylor talks about new housing opportunities for seniors and others. The development could kickstart others and help finance a replacement for the Arena. But he warns they have to do due diligence and hear from residents. He wants to know more about the proposed built form. And the Council must do everything it can to mitigate risk.
Kerwin for a deal
Next up is Dave Kerwin, always ready to sing the developers’ tune. And this time is no different. He believes Canada was built by developers, by people taking chances. He has “no hesitation” in backing the proposal. The Town needs apartments. Houses in his Ward 2 are packing the tenants in and they have no place to park except on the road. He says we need development on the Davis Drive corridor and echoes much of what Taylor said.
Twinney against a deal
Jane Twinney strikes a different position. Surprisingly, after all these years she is breaking free from Taylor’s gravitational pull and is charting her own course. “I won’t be supporting the recommendations. This facility was put in place for this community when it was built… I don’t believe in selling it off.”
She goes on:
“I don’t believe we have explored other possibilities for this land that we can use it for. I am not saying there has to be an arena for ever. I do believe there could be exciting opportunities for the public in that area to be used for the benefit of the community…”
“We are looking at buying green space along the corridor so I am struggling with the fact that we are looking at buying green space for breathing space along the corridor but we are selling this land. Taking down an arena is not an issue and creating a Riverwalk Commoins was wonderful but it is not what we are doing here. We are taking down an arena, selling the lands and developing it. So I won’t be supporting it.”
“I strongly believe we are going down the wrong road with this. If we sell it (the land) its gone. We will never get it back.”
Twinney gives herself an escape clause though.
“Maybe the public will support it (the proposal) and I shall change my mind.”
Sponga against a deal
Joe Sponga, too, is against. He agrees with Taylor that lots of residents are looking for expanded housing options but when the time is right the developers will play their hand. There is no need to incentivize them. “Developers will come when it is profitable to develop regardless of whether there is municipal land or not.” But he wants to engage the public and get a steer from them.
“There is an arena and there is land. The arena needs to be replaced but the land cannot be. So for me it should be the public that gives us the direction in declaring the land surplus.”
Broome-Plumbley for a deal, for the moment
Now it is the turn of ward 6’s Kelly Broome-Plumbley who seldom speaks, preferring to keep her thoughts to herself. A year after the election it is time for her to dive in at the deep end and start making waves.
“Up until now I have been opposed to this simply because I am not comfortable with selling Town land especially Town lands that are so closely intertwined with the residents.”
I am not entirely sure what she means by this but, for the moment, she drops her opposition, persuaded by Taylor’s promise of public consultation on a “detailed concept plan provided by the developer”.
She adds hesitantly:
“I like the way the decision is not final. We can change it at any time.”
Bisanz for a deal, for the moment
Christina Bisanz will also vote in favour. Echoing Broome-Plumbley, she says they are not doing the deal now but looking at a Town asset to see if it could potentially offer greater value to the community. The arena will have to be demolished at some stage and the question is: What can be done with the asset? She, too, wants to engage the public and get their input.
Hempen for a deal
Now it is Ward 4 councillor, Tom Hempen, who like Broome-Plumbley took ages to find his voice. He is in favour.
“We owe it to the public to look at potential redevelopment especially after all the work that has taken place along Davis Drive. The Province has spend hundreds of millions of dollars creating that transit lane.”
Echoing Taylor, he says it is in an excellent location, close to the hospital, and can kickstart development along Davis Drive. He says the detailed concept plan called for by Taylor will engage the community.
Vegh for a deal
Tom Vegh is also on board, for largely the same reasons.
Our retired bank manager Mayor and bean-counter-in-chief, Tony Van Bynen, brands the project “exciting”. He is salivating at the thought of:
"$750,000 a year in tax revenues each and every year and we won’t need to shovel one additional sidewalk or lay one additional pipe.”
Two councillors are opposed. Joe Sponga and Jane Twinney.
What happens next?
The Town’s Council meets on Monday 26 October to ratify the minutes of the Committee of the Whole (scroll to item 5). These include a motion put by John Taylor (seconded by Joe Sponga) which carries calling on staff to investigate the potential for an outdoor arena in Newmarket. "The analysis should include options for the rink, including amenities, costs, location criteria and potential funding sources." He expects the report in 120 days.
If land is in short supply and costs a fortune, as Councillor Sponga asserts, this may be quite the task. So far as I am aware, the Council does not have a huge land bank - unlike speculative developers who hoard land and wait for its value to rise.
On Hollingsworth, it seems to me that if the public is to be invited to express a view, a lot more needs to be put on the table than the detailed concept plan from the developer as envisaged by Taylor.
What are the other options? What are the pros and cons of keeping the land in Town ownership and building a new ice rink on the site of the arena?
How much is the Town going to get for the lands if they are declared surplus? This was discussed in closed session but is it the case, as Sementilli asserts, that the Town owned land is worth little? (He would say that, of course.)
What if the approach to Pickering College falls flat? Is it realistic to put a new pad at Ray Twinney given the huge amount of new development coming on at Glenway? What will be the implications for the road network?
The public, of course, only gets half the story. What else, I wonder, is being kept from us?
Former councillor Chris Emanuel told the Glenway Lessons Learned meeting earlier this year that there was too much secrecy at the Town Hall. The Glenway developer bought the Glenway lands for $10m and is now making hundreds of millions. Council decisions can turn on a dime and deliver millions to developers.
Councillors should ask themselves what precisely needs to be kept secret - and for how long?
For everything else, put it out there and get a conversation going.
Update on 17 November 2015: John Heckbert made a presentation to Council on 16 November 2015 on Hollingsworth Arena. You can watch the video here. It is at agenda item 8.