Bifolchi sounds alarm about beachfront development deal
Letter of Intent between Town and FRAM
Please note: this post is in my opinion only.
LOI – Letter of Intent
RFEOI – Request for expression of interest
RFP – Request for proposal
If elected as your Mayor on October 22, 2018, I will support a review/audit of all actions taken that have arrived at this LOI/Agreement between the Town and FRAM as well as all transactions dealing with the town’s beachfront properties since its purchase in 2015. These are necessities to knowing exactly where things stand.
It is my opinion that this LOI is in the best interest of the developer, not the town or its residents.
Request For Expression of Interest:
-The Request for Expression of Interest advertised by the town stated “Phase One Opportunity: the Town would like to focus on achieving development around both the Town Square and Festival Square in the next 5-7 years…….”
“Future Phases of Development: Following completion of Phase One the town will look to unlock the remainder of its landholdings for redevelopment…….”
Below highlights Festival Square located in the Beach District as well as the Town Square located in Lower Main, both priority projects of Phase 1.
-Fram Building Group Ltd. & Slokker Canada Corp (FS) indicated in their submission to the town that is was FS’s intention to work on both the Lower Main and Beach District simultaneously with no additional developers involved. FS ensured that the vision regarding development around the Town Square and Festival Square would be completed in the next 5-7 years as requested. They also indicated that if chosen as the developer for the project, upon completion of phase One, FS would expect participation in the further development of the surrounding landholdings.
NOTE: FS indicated that they would meet the requirements of Phase 1 that the Town was looking to complete within the next 5-7 years. They indicated that upon completion of these projects in Phase One they would expect participation in further development of lands. The Letter of Intent Council is looking to approve at the July 10, 2018 meeting does not adhere to this and has put Festival Square on hold until a later date and replaces it with beachfront land that was not to be unlocked until later in the process after performance had been met with the Festival Square and Town Square.
NOTE: The submission to the RFEOI was put forward as a team/partnership by Fram Building Group Ltd. & Slokker Canada Corp (FS). Council approved moving forward with a third party audit on Fram Building Group Ltd. & Slokker Canada Corp. to ensure they had the financial strength to carry out the project to the satisfaction of the town. It has now been brought to our attention that the agreement will only be in the name of Fram Building Group. Slokker Canada Corp, the financial arm of this company will not be listed on any agreements with the town dealing with these projects.
When you review the Letter of Intent and mapping and compare it to the RFEOI you will notice that a lot has changed. Such significant changes would suggest to me that a proper Request For Proposal is required to ensure adequate details of this project are laid out clearly and in the best interest of the town and residents. The LOI in its current form is very general in nature with preliminary details only. To make this a binding document at this point is irresponsible.
This LOI is leaving development of our beachfront in the control of one developer and tying the hands of future councils and this community for possibly decades without council having the necessary details.
Special Meetings of Council to deal with the LOI between the Town of Wasaga Beach and FRAM.
On Friday July 6, 2018 at a special Committee of the Whole meeting a deputation was made to council and the public from FRAM President Frank Gianonne as well as town staff member Andrew McNeill. You can view this meeting by clicking this link www.youtube.com/watch?v=xfkXUHV1-lQ.
Council moved into closed session to discuss the LOI. Once moving out of closed session the following motion was passed:
Moved by: R. Ego
Seconded by: B. Stockwell
Resolved that Committee of the Whole recommends that Council authorize the Mayor and Clerk
to execute the proposed non-binding LOI submitted by FRAM;
Further that Committee directs Staff and Legal Counsel to prepare a binding Letter of Intent
for consideration at a future Special Committee of the Whole or Coordinated Committee
meeting that maintains the substantive components of the proposed LOI, taking into account
the comments made in Closed Session;
Further that Committee directs Legal Counsel to consider the authority that Council may wish to
delegate to staff to implement the LOI over the period that Council may be in a lame duck
Deputy Mayor Bifolchi Nay
Councillor Bray Nay
Councillor Ego Yea
Councillor Smith Yea
Councillor Stockwell Yea
Mayor Smith Yea
During the pubic portion of the meeting I shared concerns about how the LOI was shared with Council Members. As promised by staff Council did receive the draft LOI (June 26) a little over a week in advance of the July 6th meeting to allow time to review it. Unfortunately Schedules A and B were not included. Once I realized this I asked for them. Within a day or two I was provided schedules A and B from staff. Unfortunately when reviewing these schedules I realized that Schedule B did not match the written words in the LOI.
I again asked for accurate schedules. Within a day or two new schedules were provided. I find it concerning that considering the town had in its possession a signed LOI from Mr. Gianonne that not only were the Schedules excluded from the first circulation to council but that I had to ask twice to receive accurate ones.
The Agenda for Tuesday July 10, 2018 10am can be found on the town’s website www.wasagabeach.com In the agenda is the LOI discussed in camera at Friday’s meeting. I cannot share what was discussed in camera however, I can share with you my concerns about this LOI below and the direction being taken by Council.
It was also suggested at this meeting that we could compare our project to the City of Hamilton project. I see many significant differences but I encourage you to come to your own conclusion. https://www.hamilton.ca/city-initiatives/priority-projects/waterfront-redevelopment-west-harbour
Mayor Smith’s disrespectful, unprofessional, condescending and out of control rant at the July 6th meeting www.youtube.com/watch?v=xfkXUHV1-lQ basically implied that if council members didn’t get in line and agree to move this LOI forward without further questions or delay we should take an unpaid vacation for the next three or four months until the election. Arrogance at its best. I assure the residents of this community I am working very hard in YOUR best interest to ensure that future generations of this town don’t have their hands tied along with unrealistic debt due to what I believe to be irresponsible decisions of this council.
My comments and opinion about the LOI to be approved by Council on July 10, 2018:
The Downtown Development Master Plan was sold to this community promising that they would get a downtown that includes a festival square and town square among other amenities that would be located in a hub. It was a book of beautiful pictures. Most of these things are going to be paid for by the tax payer, town reserves or development charges in some form or another and these projects in my opinion should all be put out to a proper tender if and when the time is right.
After reading the LOI I have realized that the only real requirement and commitment of FRAM is to build condos. It would appear this project has been reverse engineered with no guarantee to any other amenity or festival square development.
If council wanted condos on the beachfront we should have just voted as to whether we wanted to sell Beach 2 and have condos built. In my opinion the rest is all smoke and mirrors.
I have included a few items below to think about and encourage you to contact town officials if you have questions or concerns. I always suggest doing this in writing.
Town Square Lands
-4a) how much of this property will be required for the residential component that FRAM wants to build? How can we put a dollar value purchase price on it without knowing the size, construction footprint or development scope? Will the library go there?
-4b) There is no risk to FRAM and this clearly states this is “for the benefit of the Developer.” If the two parties can’t agree, council, on behalf of the taxpayers can pay to go to arbitration on land the town owns but no longer seem to hold the full rights to.
-5e) Who are the subsidiaries of FRAM? We need to know who we are dealing with.
-Why does the LOI not speak to and confirm what Mr. Gianonne referenced in that they will not be asking for any CIP contributions or development charge credits and they will be paying fair market value for the land? This should be clarified in this document.
-Please review the fees and expenses the town may be required to pay FRAM moving forward. These will add up.
Beachfront Residential/Resort Lands
-Probably the most valuable piece of town owned beachfront land which was not part of the RFEOI Phase 1 that FRAM responded to but has now been included as part of Phase 1 in the LOI.
-Section 8 wording dealing with the purchase prices are far too vague. Nowhere does it state a guaranteed minimum purchase amount. It says “in a range between X$ and fair market value (FMV).” What happens if FMV is less than the dollar amounts used in item 8 a(i)(ii)(iii)(iv)? Example: 8a(iv): this phase shall be in a range between $9,500,000 and the fair market value. This wording leaves a person to believe that the minimum amount the town would receive for this parcel would be $9,500,000. However, what if the fair market value is less than $9,500,000? There would be a new pricing range and the town would not be receiving the amounts we are led to believe as written in the LOI. Fair market value can only be determined by going through a proper process to find out what the highest bidder is willing to pay.
-8b) Why is the financial arm of this partnership, Slokker Canada Corp. not mentioned here. All clauses are in favour of the developer again.
Beach festival square lands
-This was part of phase 1 of the RFEOI put out by the Town and responded supportively to by FRAM/Slokker.
-There is no commitment by FRAM other than to work together nor is there any penalty for not moving forward with this despite this being a council priority of the RFEOI.
-There is no guaranteed commitment by the Town or FRAM to provide the community their promised festival square.
Future Development of Downtown Lands
-Free reign and control is be given to FRAM over the beachfront amenity land and beach festival square lands. Why would the town commit to this and tie the hands of the town from the opportunity to develop this land with other developers in a shorter time frame than what FRAM could provide.
Other terms and conditions
-12b) The town will not be able to back out of this agreement without financial penalties which are unknown at this time but expected to be significant. However, the developer can back out any time with no penalties paid to the town despite how long they may tie this town owned land up.
-12c) Does the town consider development charge reductions/grants/incentives viable for all other developers or business owners throughout town? Why is this clause still included in the LOI when Mr. Gianonne already made a public comment that he wouldn’t be asking for these?
-12d) Does the term “strategically acquire” allow the developer to utilize the town’s power to expropriate lands currently not owned by the town or developer or will the town expropriate on their behalf?
-12f) Who are their subsidiaries. Any subsidiaries of FRAM should be provided to the town as of the day of the signing of this agreement. The town is giving authority in this clause for unknown or newly created companies to gain control of our town owned lands through FRAM. We need to know who we are dealing with.
-12b) Creation of an economic development corporation will keep dollars and cents, deals with all consultants and trades, subsidiaries etc. confidential from the public and any member of council who is not part of this corporation. Sounds a little bit like the Wasaga Distribution Board of Directors whereby meeting minutes were denied or the Beachfront Management Board Chair not permitting members of council in closed session to hear important information about our town investment that appointed residents could.
-It is important to know what the dispute resolution is prior to signing this agreement especially since Council is looking to make this LOI a binding agreement in the near future.
-Would it be more appropriate for all notices to go through the CAO’s office?
I have included contact information for all Council members below. If you would like a response from each member of council I would suggest you send them to individual council members. If you send one email to all members, protocol is that the Mayor responds on behalf of all. If you have concerns or questions please be sure to contact them prior to a final decision being made on your behalf. I also suggest you copy the CAO and Clerks.
Mayor Brian Smith
705-429-3844 EXT: 2225
Deputy Mayor Nina Bifolchi
My Thoughts for OUR Beachfront:
During this term of council I have spoken to a number of developers both new and established as well as other interested potential investors. There is interest in building things other than condos at our beachfront but they have made it very clear that they would rather wait until after October’s election.
I have always said, competition is a good thing. Putting all of our eggs in one basket and one developer does not create competition nor does it provide the stability our beachfront requires. We need several developers investing in our beachfront by parcelling off sections. If one is unsuccessful, our entire beachfront doesn’t die or become stagnant because it’s under the control of one entity. By working with several developers, with checks and balances in place, the control over development stays with the town and at a pace that could far exceed what one Developer can offer. This LOI puts FRAM in control of our entire beachfront tying the hands of future councils, leaving very little opportunity for any other developer to enhance our beachfront. That is outrageous on land you the taxpayer owns!
I will be sharing more about my thoughts for development of the beachfront in the coming weeks. However, if Council agrees to the terms in the LOI and make that document a binding one, there really won’t be much to talk about as the town will be solely under the control of FRAM with our hands bound tightly for what I believe will be decades.