Why Worry - It's Not Their Money

Council has money to burn
$5 million federal grant could turn overpriced building into homeless shelter in club district
By Sue-Ann Levy

Venture capitalist Jim Somerville bought his Entertainment District building exactly one year ago for $1.6-million or about $213 per square foot.

That three-storey building on Richmond St. W. is directly adjacent to 129 Peter St. -- the one-time nightclub the city wants to purchase for an overpriced $4.7-million to relocate the assessment and referral centre and 40-bed homeless shelter from its original home at 110 Edward St.

The cost of the proposed Peter St. location works out to $360 per square foot -- a price Somerville says doesn't make "any sense" at all.

"The going rate (in the area) is $200 per square foot," he said after trying to convince members of the general government committee last week this is a bad deal and a bad location for a homeless shelter.

To their credit the committee -- which contains a few fiscally responsible members like Doug Holyday, Cliff Jenkins and Cesar Palacio -- would not endorse the purchase. They sent it on to the next council meeting, asking staff to look at alternative locations.

But call me a cynic (or a realist). This is socialist City Hall where good deals really don't much matter, especially when there's a pot of $5 million to spend on the purchase from the federal government. I suspect Mayor David Miller, aided by the local councillor, Adam Vaughan, will have the votes lined up to ram the deal through at council.

Harry Glicksman of Capitol Buildings, which has eight King-Spadina commercial properties in its portfolio, called the Peter St. deal an "outrageous purchase" especially when one considers that city officials have factored in all 13,000 square feet of space, including the 4,000-square-foot basement (with no windows at all ) in the purchase price.

Somerville maintains the basement space is typically not included in the cost calculations.

But the city's chief corporate officer Bruce Bowes insisted the price is the "right amount," the basement is not in "typical basement condition" but a "fabulous" space and they are not paying a "premium" for the building.

Bowes seemed not to know until pressed the cost to renovate the building to turn it into a shelter -- some $560,000. There's also the cost to run the shelter, budgeted at $2.9-million this year.

(Okay, so our Harvard-educated mayor has introduced his own brand of Miller math to City Hall. The figures rarely add up and city officials always seem to forget what they are.)

The costs aside, both Somerville and Glicksman feel -- like me -- that a former nightclub located smack in the midst of a revived Entertainment District is the wrong location for a homeless shelter .

The homeless assessment centre is needed. I certainly don't question that. But it seems a contradiction, in my view, that Vaughan would push for a sidewalk tax for clubgoers and want to shut down crime-ridden nightclubs while fully supporting a homeless venue I suspect will only encourage an influx of panhandlers and homeless into the area to loiter.

'Financial disaster'

I saw the same thing happen outside 110 Edward St. -- people sleeping in the grass beside the building at all times of the day and night.

Somerville feels the city is heading towards "unmitigated financial disaster" by pushing these dual agendas.

"His (Vaughan's) solution is to put in a homeless shelter here and drive out the clubs," he said, adding that the city has the tough tools (the police and drug enforcement rules) to clean up the bad nightclubs.

Glicksman has no argument with the idea of a shelter in the ward. But he said the site is front and centre in a tourist area. "We're not putting our best foot forward," he said.

But Vaughan contends that the nightclubs and the shelters are "two different land uses.

"The issue is balance," he said. "It's a question of striking an appropriate balance in the neighbourhood."

That's debatable. In fact, the only balance that appears to matter to Miller, Vaughan and Co. is the $5-million they need to use ... and fast. As Glicksman put it so eloquently: "Council appears compelled to spend $5-million ... they just want to ensure they grab the money."

sue-ann.levy@sunmedia.ca