Some history: The Saga of White Star

The saga of White Star

Originally published on Tue., Feb. 15, 2011

Full Op-Ed - The Hamilton Spectator https://www.thespec.com/opinion/2011/02/15/the-saga-of-white-star.html

Perched atop the west harbour, near the northern terminus of Bay Street, is White Star Auto Wreckers, operated for 42 years by Jack Rothstein. The property is managed by his wife, Rose, daughter of the original owner.

In the 1980s, the Rothsteins decided they wanted to retire and sell the property for redevelopment. Rose, already embroiled in a property tax dispute with the city, began working with a Hamilton developer, the Cupido Group. Rose's plan was to develop their property along with the lands south and north of theirs, at that time owned by members of her extended family.

To that end, the Cupido Group submitted an application for an official plan amendment to rezone the lands from commercial-industrial to medium-density apartments.

On Dec. 20, 1989, Hamilton council passed the zoning amendment subject to an environmental study and a noise and vibration study on the land. CN Rail and Rheem Canada were the only objectors. Then-mayor Bob Morrow also requested that city staff meet with Rheem and CN Rail to ensure their concerns about the development would be resolved and the environmental noise and vibration guidelines could be met. There is no record that city staff actually met with the parties.

The delays around resolving the issues with Rheem Canada and CN Rail, and the tightening of environmental laws in the early '90s led the Cupido Group not to renew their offer to purchase the property.

Rose continued her fight with city hall over the property taxes and over their inaction on the Rheem and CN issues. The Rothsteins, and the Mandel family members who owned the adjacent properties, were getting increasingly concerned about the environmental liabilities they might be facing, not fully understanding the new and changing regulations. No resolution seemed to be in sight, only more years of uncertainty and financial hardship.

On June 27, 1995, Hamilton's department of public works presented the West Harbourfront Development Study to council. The vision statement was to establish the west harbourfront as a place for public use and enjoyment; a place for protection of the natural environment; a place to live, work and play; a place to expand our tourism industry; and a place in which all Hamiltonians can be proud.

The public was informed about the draft plan through The Spectator. The preliminary cost estimates came in at just under$1 b illion, including about $100 million for the relocation of the CN Rail yards that lie virtually against the water along much of the Hamilton's west harbour.

The initial excitement quickly dissipated. The project created a huge rift between the city's public works and planning departments; since planning had not been the lead on the project, it did not support the West Harbourfront Study.

A project that had cost millions of dollars of taxpayers' money was shelved. Copies were no longer available through city hall. Hope quickly faded as well that the study would make any difference to Rose's and Jack's situation.

The years marched by. Nothing more happened until 1997, when there was a chance meeting between Alan Mandel, Rose's cousin, and Hamilton entrepreneur and developer Marino Rakovac. Tax arrears and penalties on the White Star site and adjacent properties had now skyrocketed to more than $600,000. That, combined with the still-looming potential environmental liability on the property, made the Rothsteins' situation even more desperate. Marino arranged to meet with them, and offered to take over the project by paying the tax arrears and assuming the environmental liability. Rose, Jack and the rest of the family were relieved their nightmare was coming to an end and agreed to the plan. Rose's parting words to Marino were: "I hope you'll have better luck dealing with the city than I did!"

Before closing the deal, Marino confirmed the city still supported the council resolution of 1989 for a medium-density residential development on the White Star lands. He reiterated his sole purpose for closing the deal was to develop the lands according to the council resolution. Marino fulfilled his end of the deal; he paid the tax arrears, wound down the auto wrecking business and began his preparations for the project within the agreed-upon time frame.

On Feb. 11, 1998, Marino and his lawyer, Anthony Powell, met with the following city officials of the day: city manager Joe Pavelka, building commissioner Len King and Paul Mallard and Bill Janssen of the city's planning department. All of them reiterated the city's support for the project. They said an official plan amendment would, however, be required for the rezoning and the city would do all that it could to provide the necessary procedural help.

Marino was eager to get the project going. He had already received the results of the environmental study that pegged the cleanup at $500,000, much less than everybody's worst fears. Maybe Lady Luck was beginning to smile on Marino as Rose had wished?

Then, on Nov. 19, 1999, out of the blue, Marino's group was blindsided. He received a letter from Paul Mallard, then manager of development planning, rejecting the medium-density residential highrise proposal as approved by council in 1989 and now insisting on a low-density townhouse complex as the preferred development. The medium-density zoning was also supported in the 1995 West Harbourfront Development Study. It turns out Mallard didn't support it because it wasn't his plan. In a meeting, he told Marino and Powell that the city's public works department produced the study. He had nothing to do with it and disagreed with its recommendations.

Marino agreed to Mallard's plan for his land, albeit reluctantly. He submitted his rezoning application in 2000 for the low-density townhouses, posted the appropriate notices for public meetings on the property and geared up for the town house development. There was no specific date given for the public meeting posted on the sign. Marino received no response to his inquiries as to that absence of a date.

CN Rail was the only objector. Aercoustics Engineering Ltd. undertook a noise and vibration study based on the townhouse development plans; it demonstrated the Ministry of Environment standard could be met. In fact, the study shows the design could come in at five decibels lower than the ministry standard.

Shortly after the applications were submitted and the sign posted, it became obvious why there was no public meeting scheduled. Guy Paparella, then director of the city's development division, advised Marino that, before they could deal with his application, let alone support his project, the city would have to reconcile the conflicting visions of its waterfront plan and its local neighbourhood plan. Paparella informed Marino the reconciliation would likely be completed in early 2001. The reality was it would take another 4 years.

In February 2003, council (for reasons now unknown to me) passed an interim control bylaw that prohibited Marino from operating White Star Auto Wreckers even though he had already agreed to cease operations in 1997.

In 2005, the divergent waterfront and local neighbourhood plans were reconciled under the Setting Sails secondary plan. Of course, CN Rail filed another objection to the Ontario Municipal Board in opposition to included residential zoning. Art Zuidema, the city's legal counsel, still had not resolved the CN issue.

Marino and Powell met with Zuidema and Bill Janssen, manager of planning and development, at which the city officials recommended Marino resubmit his application as it might put pressure on CN to settle. He was also advised to upgrade the project to medium-density as detailed in the 1989 council resolution and disregard the low-density design that was insisted on by Paul Mallard.

The city would support the rezoning as the project conformed to the city's vision set out in the Setting Sails plan.

At this point in the story, one might be asking oneself, what does the word "support" mean?

So, in February 2006 Marino geared up again and was informed by city staff his complete file had been lost. Surprised, maybe aghast, but undeterred, he submitted the revised application as city staff had advised. A sign was posted on the site announcing the project. Once again, there was no date given for the public meeting, only that it would be announced.

October 2006: Zuidema again put the brakes on the project. He informed Marino's lawyer the planning department had no intention of organizing a public meeting to deal with his project. They were concerned any support directed to Marino might compromise the city's position with respect to the balance of the West Harbour lands. Why did Zuidema and staff, only a matter of weeks earlier, urge Marino to resubmit his application? City planners denied Marino's request for a meeting. City staff would not be moving forward on his application for approval to council until more progress had been made on the Setting Sail plan, which was on a very slow track.

March 29, 2007: A meeting was finally arranged by Marino and Powell with junior staff from the planning department. Their lack of knowledge concerning the project was not surprising as the file had been lost a year earlier. A followup meeting was scheduled by Marino and Powell with Paul Mallard, by then director of planning. Mallard stated he was unaware of the details of the Setting Sails plan with respect to Marino's property and the adjoining lands of the West Harbour. How could this be possible for the director of planning?

July 24, 2007: Lawyer Jack Pelech, who had been part of the original Cupido group, stepped in to help. Pelech and Powell continue to talk with city staff. Pelech attempted to meet with Tim McCabe, the city's general manager of economic planning and development, but that meeting never materialized.

Feb. 20, 2008: Powell connected with city staffer Daniel Barnett to review the status of Marino's application. Barnett advises him Marino's files are in "deep storage." Barnett subsequently advises Powell that Marino's files may have been destroyed.

Now, even people the most skeptical of conspiracy theories may have started to scratch their heads.

Sept. 2, 2008: Then-councillor Bob Bratina drafted a motion, supported by council. He expressed concerns with the unreasonable delays and directed staff to support Marino's application to the OMB and to move forward with OMB issues. At Zuidema's insistence, council agrees to meet in-camera to discuss all of the matters relating to Marino's project.

In 2009, the City of Hamilton began to gear up for the Pan Am Games bid. Marino was contacted by Zuidema. He wanted to delay Marino's appearance at the OMB until the Pan Am decision. If Marino agrees, Zuidema says, the city will not object to his request for party status at the OMB. He also states a decision is expected in late November 2009. (As we know, the decision on Pan Am facilities was not made until this month - February 2011.) The request seems contrary to council's motion of Sept. 2, 2008. When Powell and Marino objected to another delay and reminded Zuidema of the council motion, Zuidema said: "Things change. If you have a problem with it take it up with council."

On Feb. 24, 2010, Hamilton council approved the west harbour as the site for Pan Am Games venues including a new stadium, warm-up track and velodrome.

The city began acquiring land. The Rheem plant was purchased; others were expropriated. The city began soil testing on the White Star property with the intention of assembling more land. Marino and the White Star Group, as one of the major private sector landowners in the West Harbour, immediately embraced mayor Fred Eisenberger's vision. All attempts to communicate with the mayor's office were unsuccessful; calls were not returned. Then the Tiger-Cats dropped their bombshell: They would never play a game at a west harbour stadium. As a result, another delay for setting a date for the OMB hearing was imposed.

After repeated delays regarding land acquisition and compensation by city staff, council passed a motion Sept. 15, introduced by Bratina (still Ward 2 councillor), directing staff to review and report to council by Oct. 12, on the resolution of matters related to the lands in the West Harbour stadium precinct owned or controlled by the White Star Group, including possible compensation for losses as a result of city actions related to the Setting Sail plan and the Pan Am Games opportunity. White Star's estimates of expenses and losses of business revenue were now coming in around $5 million.

On Oct. 13, Marino attended the council's committee of the whole, a meeting that went on into the early morning. When it came time to address the White Star issues, the meeting moved in-camera on the advice of legal staff. Nothing was said, nothing was reported and everyone went home.

On Oct. 15, Powell was contacted by Ron Sabo, assistant city solicitor, who said by e-mail: "Please be advised that committee and council did not issue any public decision or direction following your delegation. . You should consider this as meaning the city is taking no action to purchase your client's lands. Whether this position would change would depend upon the new council revisiting the issue and providing further direction but, at the moment, staff have no direction to negotiate for your specific lands or the related claims that you raised to committee."

As of Oct. 25, neither city manager Chris Murray nor city council had been informed that the files for the White Star Project were lost or destroyed. How could staff advise council if they did not have access to the complete file?

According to Murray, it is the duty of city staff to inform council of any potential liability. On Oct. 26, Marino delivered a complete copy of his file to Murray.

In early November, a meeting took place at the Hamilton Chamber of Commerce. Erik Hess, formerly lead landscape architect for the 1995 harbourfront study, now working for the White Star Group, spoke with Murray and Zuidema.

Hess raised the issue of years of delay and inaction on Marino's project. Murray states: "It didn't help that the files have been lost by the city."

The date for the Ontario Municipal Board hearing has finally been set for June 6.

Will Marino, his family and associates be freed from the bureaucratic nightmare?

Will Jack and Rose Rothstein, now living in retirement, ever see the project completed that they brought to city staff in 1988?

Were the 22 years that have passed by a reasonable length of time for city staff to get a deal done with CN Rail?

What's that old saying about the light at the end of the tunnel? Perhaps it's just another train wreck coming right at us?

Written by Gary Santucci