Group Of Fort Erie, Ontario Taxpayers Sues Town, Developer Over Condo-Tower Plan

By Doug Draper

Just when we may have thought that the war between the Town of Fort Erie and some of its Crystal Beach area residents over plans for a controversial condomium tower is done,  another battle has begun.

A depiction of what the condo tower might look like on Fort Erie's Bay Beach.

Papers were filed on behalf of a group of Fort Erie taxpayers in the Ontario Superior court of Justice in Toronto this April 20, launching a lawsuit against the town and Hamilton-based Molinaro Group of developers. The six individual taxpaypers and a property firm – Dr. Norma Nowak, Patricia Murrett, Derek Crain, Orma Bleeks, Linda Campbell, Robert Lund and D & L Land Property Ltd. – and all named as plaintiffs in the suit, are hoping to have the 12-storey condo project “declared illegal,” according to a media release circulated this April 21 by other residents in the community.
The lawsuit argues, in part, that “the town whent beyond its statutory authority in attemption to convey town lands (at the front of publicly owned Bay Beach in Crystal Beach) to a developer (Molinaro) in return for facilities or services,” says the media release. Under a section of the province’s Planning Act, “the municipality is only permitted to trade increases in the height and density of a development (and not land) in return for facilities and other community benefits.”

“Because the town is only allowed to trade community benefits for an increase in the height and density of a development,” continues the media release, “the Town will actually receive nothing in exchange for the Bay Beach property.  The Molinaro Group will get this prime waterfront land for free!”

Fort Erie Mayor Doug Martin, contacted about the suit by  Niagara At Large, returned the following note this April 21; “Sorry, I have no comment. It (the matter is now) at the town’s legal department.”

The suit is the latest chapter in a more than a year-and-a-half battle between residents and the town over an agreement it signed with Molinaro to build a multi-storey condominium in front of Bay Beach, one of the last open, publicly owned beaches along Niagara’s Lake Erie shores. The development project was approved by the last town council and approved again following a hearing by the Ontario Municipal Board before being rejected by the new town council and narrowly approved again following warnings by town staff that there could be a costly legal battle with the Molinaro Group if the agreement was torn up.

For more information on the lawsuit filed this April 20 see the media release below, followed by the ‘statement of claim’ filed in the Ontario court. Then share your comment on this issue in the space provided at the bottom of the material.

Media Release –  A group of Fort Erie taxpayers have filed a lawsuit to have the Bay Beach condo project declared illegal.  A Statement of Claim was filed yesterday afternoon with the Ontario Superior Court of Justice in Toronto against the Town of Fort Erie and the Molinaro Group.  The plaintiffs are represented by Ontario barrister and solicitor John Keenan.  The group is asking the Court to rule on the following legal issues:

1.  The Purchase & Sale Agreement is null and void because the Town went beyond its statutory authority in attempting to convey Town lands to a developer in return for facilities or services under Section 37 of the Ontario Planning Act.  Under Section 37, a municipality is only permitted to trade increases in the height and density of a development (not land) in return for facilities and other community benefits.

2.  Because the Town is only allowed to trade community benefits for an increase in the height and density of a development (an exchange that was authorized by By-law 26-10), the Town will actually receive nothing in exchange for the Bay Beach property.  The Molinaro Group will get this prime waterfront land for free!  Under Section 106 of the Municipal Act, Ontario municipalities are prohibited from bonusing, which includes giving, lending or selling public property to a business at below fair market value.  The actions of the Town of Fort Erie constitute bonusing because they are in clear violation of Section 106.

3.  The Purchase & Sale Agreement states that the purchase price for the Bay Beach property is $2.7 million but the Molinaro Group will pay nothing in cash.  In addition, the $2.7 purchase price may be substantially less than the property is currently worth because it was based on an appraisal performed in January 2010, before the land was rezoned to increase the maximum height from 2.5 storeys to 12 storeys.  Because the Molinaro Group will receive Town lands worth millions of dollars and will pay nothing in consideration, the P&S Agreement is null and void.

4.  The Town also exceeded its statutory authority when it formed a public-private partnership with the Molinaro Group.  All the profits from the sale of the condo units resulting from the partnership will belong to Molinaro, not the Town.  There is no Ontario statute permitting a municipality to enter into a partnership to enrich a commercial enterprise through the use of public property and funds.  The public-private partnership is therefore not legal.

5.  Because of all the reasons listed above, the plaintiffs are asking the Court to grant a permanent injunction to prevent the Town from conveying the deed to the Molinaro Group.  If at the time of judgment the deed has already been transferred, the plaintiffs are asking the Court to require the Molinaro Group to reconvey all rights, title and interest in the property back to the Town of Fort Erie.

This lawsuit focuses on the crux of the issue … what we always knew in our hearts.  It’s simply not right for the Town to be giving away Crystal Beach’s most valuable asset to a private developer … this prime waterfront property belongs to the public!

Statement of Claim

Court File No.
ONTARIO
SUPERIOR COURT OF JUSTICE
B E T W E E N:
DR. NORMA NOWAK, PATRICIA MURRETT, DEREK CRANE, ORMA BLEEKS,
LINDA CAMPBELL, ROBERT LUND, D&L LAND PROPERTY LTD.
Plaintiffs
AND
THE CORPORATION OF THE TOWN OF FORT ERIE
MOLINARO GROUP CRYSTAL BEACH WATERFRONT INC.
Defendants
STATEMENT OF CLAIM
TO THE DEFENDANT(S)
A LEGAL PROCEEDING HAS BEEN COMMENCED AGAINST YOU by the plaintiff(s).
The claim made against you is set out in the following pages.
IF YOU WISH TO DEFEND THIS PROCEEDING, you or an Ontario lawyer acting for
you must prepare a statement of defence in Form 18A prescribed by the Rules of Civil
Procedure, serve it on the plaintiff’s lawyer or, where the plaintiff does not have a lawyer, serve
it on the plaintiff, and file it, with proof of service in this court office, WITHIN TWENTY
DAYS after this statement of claim is served on you, if you are served in Ontario.
If you are served in another province or territory of Canada or in the United States of
America, the period for serving and filing your statement of defence is forty days. If you are
served outside Canada and the United States of America, the period is sixty days.
Instead of serving and filing a statement of defence, you may serve and file a notice of intent
to defend in Form 18B prescribed by the Rules of Civil Procedure. This will entitle you to ten
more days within which to serve and file your statement of defence.
IF YOU FAIL TO DEFEND THIS PROCEEDING, JUDGMENT MAY BE GIVEN
AGAINST YOU IN YOUR ABSENCE AND WITHOUT FURTHER NOTICE TO YOU. IF
YOU WISH TO DEFEND THIS PROCEEDING BUT ARE UNABLE TO PAY LEGAL
FEES, LEGAL AID MAY BE AVAILABLE TO YOU BY CONTACTING A LOCAL
LEGAL AID OFFICE.
Date April 20, 2011 Issued by
…………………………………………………………………
Local Registrar
Address of
Court
393 University Ave., 10th Floor
Toronto, Ontario M5G 1E6
2
TO: The Corporation of the Town of Fort Erie
1 Municipal Centre Drive
Fort Erie, ON L2A 2S6
Molinaro Group Crystal Beach Waterfront Inc.
155 Market Street
Hamilton, ON L8R 3H5

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