By Bob Bruton, Barrie Examiner
The stakes could be raised in a multi-million-dollar lawsuit against the city by its former development partner on Barrie’s Allandale Station land.
The Correct Group Inc. (CGI) intends to substantially increase its statement of claim by millions of dollars and specifically add Mayor Jeff Lehman, former and current city staff, a real-estate appraisal company and GO Transit’s operator to its lawsuit.
“We are deadly serious about this, we’re very serious about it and we expect that if this matter is not settled that it will absolutely go to court,” said CGI’s Alan Furbacher.
These proposed amendments are part of documents filed with the Ontario Superior Court of Justice on Nov. 15.
A Feb. 4, 2013 court date is scheduled for CGI’s motion to amend its statement of claim, according to city staff, although the City of Barrie has not yet been served with a motion record to amend CGI’s statement of claim.
Furbacher said the claim could be further amended by that date.
Lehman notes the proposed amended statement of claim would expand and enlarge CGI’s lawsuit, but the mayor has not changed his stance on the allegations.
“I stand by my statements and actions on this matter. I believe all city representatives, including myself, have acted in the best interests of our residents,” he said.
“If served, the City of Barrie will challenge these claims in court,” the mayor added. “Our responsibility is to represent the interests of Barrie residents and we will continue to do that.”
CGI filed its original lawsuit a year ago, claiming breach of contract and bad faith bargaining on the city’s part in failed development talks for the old railway land.
None of the allegations have been proven in court.
Furbacher said he couldn’t say when this matter would go to trial.
CGI wants the 9.1 acres known as the Allandale Station property, including the historic train station, from the city. The alternative is a claim worth tens of millions of dollars.
The Brampton-based developer is asking, in its proposed amended statement of claim, for $40 million against the city for breach of contract, of good faith, of trust, negligence, slander, damaging its reputation and fraudulent misrepresentation.
Claims against Metrolinx, which include GO, include negligence and inducement of breach of contract, that it constructed the GO Transit station and stockpiled contaminated fill on the portion of land to be developed by CGI to induce the city to breach its agreement with CGI.
CGI claims current and former city staff have breached the confidentiality agreement and misrepresented facts to city council, inducing it to violate the terms of its agreement with the developer, and interfered with business contracts. The proposed amended statement of claim asks for $10 million in damages
CGI claims $10 million against Lehman for damaging its reputation through his statements, breaching the city’s code of conduct and Ontario’s Municipal Act, again in the proposed amended statement of claim.
CGI claims unspecified damages of $10 million against Indicom Appraisal Associates, wants all confidential information returned and/or destroyed and an order restraining the release of that data.
CGI is asking for $6 million in damages against the city for loss of opportunity, increased carrying and construction costs, and damage to its reputation.
It’s also asking the city for $3 million, again in the proposed amended statement of claim, for breaching its duty of good faith and trust.
That totals $79 million, although some of the claims could overlap.
“Barrie’s own documents, and appraisal documents, which are now public record, I believe, show that they had a cost value, and I don’t know if that included land, of over $60 million if I remember correctly. I mean it’s in the record,” Furbacher said.
“So it was a pretty significant project that we were proposing to build.”
Contacted by the Examiner on Wednesday, Metrolinx officials declined comment.
Indicom did not respond for a request for comment from the Examiner.
City staff named in the statement of claim are Richard Forward, then Barrie’s general manager of infrastructure, development and culture, now its general manager of community operations; Janet Foster, Barrie’s city centre revitalization co-ordinator; general manager of corporate services Ed Archer; director of legal services Ingrid Peters; and finance director Deborah McKinnon.
Jon Babulic, the city’s former CAO, is also named, as is Charles Magwood, the city’s former downtown development facilitator.
City staff say the proposed amended statement of claim was filed in Barrie court as part of the materials used by CGI in its previous application for an urgent interim injunction to stop certain work on the Allandale Station land on Nov. 16.
The court ruled in favour of the city’s position and dismissed the motion brought by CGI for the interim injunction.
In May, CGI released portions of a confidential Nov. 29, 2010 city staff report which it says was filed with the courts in connection with a then-$28-million lawsuit against the city.
That staff report said there is mercury contamination on the property and it would cost more than $405,000 to clean it up and haul it away.
City officials countered that the mercury poses no public safety risk, and has been buried there for as long as a century.
Furbacher said the mercury contamination furthers his company’s legal argument. He also had concerns about how the mercury would potentially affect proposed uses on the property, how removing it would affect the land price and sale and why the contamination was not revealed previously.
Forward said mercury levels on the Allandale property were so low the soil only has to be removed if the land is used for parkland or housing.
Forward has said mercury levels there don’t exceed the former Ministry of the Environment standards and do not exceed the new Ministry of the Environment standards — as of July 1, 2011 — for roads, walkways and industrial/commercial developments.
He said soil samples collected from test pits, located within the berm along the northern property boundary of the site, had reported low levels of metals including mercury.
It was found in boreholes along the old rail bed in front of Allandale Station, in a single borehole in the old lawn bowling area near Essa Road and a single borehole immediately behind the Allandale Station.
Council had been negotiating exclusively with Mark Porter to redevelop 4.1 acres, or almost half, of the Allandale property. Porter has shown interest in a hotel, condominium and commercial space there.
Those talks with Porter about the Allandale land are on hold because of Correct’s legal action.
In 2008, partnering with developer Forecast, Porter proposed Allandale Market Village — a mix of commercial space, a hotel and heritage buildings, on the site.
But in April 2009, the former city council chose a development proposed by the CGI and the local YMCA. The Y dropped out of the development in early 2010.
The following autumn, the city and CGI had a falling out and the land went back on the market, leading to CGI’s filing if the lawsuit in December 2011.
For the full article, click here.