Before the protests and petitions, the countless public meetings and a bitter planning fight, the remaking of Toronto's John Fisher Public School was supposed to be the type of project politicians and bureaucrats love to call a "win-win."
When a developer bought a plot of land beside the school in 2010 and proposed a condo building that far exceeded the city's guidelines, the cash-strapped Toronto District School Board saw an opportunity to forge a partnership that would give the midtown neighbourhood near Yonge and Eglinton a new school.
The resulting seven-year saga – which has exposed flaws in the planning process – raised questions about public-private agreements and heightened tension between the school board and city about what happens when municipal planning and budgetary pressures clash.
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The high-rise at 18-30 Erskine Ave. is moving ahead with a new developer, but without a new school, after an Ontario Municipal Board settlement that The Globe and Mail has learned included a $30,000 private payout to a neighbourhood association.
And instead of saving money, the TDSB, under legal threat from parents, is paying to retrofit John Fisher to accommodate the private development.
For the developer, the coming construction is routine in a growing city. "It's not an unusual thing at all," says Marvin Katz, co-founder of KG Group, which has successfully developed numerous sites adjacent to school zones.
Toronto's chief planner, Jennifer Keesmaat, believes the project has become emblematic of broader issues that the province is trying to address with sweeping changes to the OMB and a cautionary tale about future school projects.
"This is a poster child for why OMB reform is required," she says. "The public interest was not well served. The system is broken."
'Someone dropped the ball'
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John Fisher Public School is sandwiched between mid-size apartment buildings in one of Toronto's most urbanized neighbourhoods. Though somewhat dilapidated, the red brick school, with about 450 students from senior kindergarten to Grade 6, is revered for its French immersion program that draws students from feeder schools. Ontario Premier Kathleen Wynne lives just down the street; her youngest child attended the school.
In 2010, Pemberton, a residential and commercial developer owned by the Muzzo family, purchased land to the west of the school for $4.8-million and proposed a 35-storey, 300-unit condo tower, not unlike the ones built nearby.
The pocket, however, is zoned for mid-rise development, in the range of eight to 12 stories. The city immediately had concerns about density, height and the impact on adjacent neighbours, Ms. Keesmaat says.
But where the city saw problems, the TDSB saw a solution. The board reached out to Pemberton, hoping to replicate the successful partnership it struck with Tridel to redevelop North Toronto Collegiate in 2010 for a total cost of $52-million. The TDSB's official policy requires projects to be tendered, but staff do look for co-developments to save money, says Ross Parry, executive officer of government, public and community relations at the board.
"If we can get another school out of this – good. Because John Fisher is getting old," Mr. Parry recalls of the thinking. "A seed was planted and a lot of players were involved."
Mario Silva was a land-use planning officer with the TDSB at that time, a post he left in October, 2015. He says that John Fisher could have been redeveloped successfully, but fissures appeared quickly in the process, starting with a change in the TDSB executive. Then, he says, the board felt it was investing too much in a project the city should have run, while Pemberton questioned how much they would have to pay for a new school.
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According to Ms. Keesmaat, the city reached out to the TDSB to ascertain how talks were going and was told to hold off on any reports, that negotiations were in full swing.
In 2015, the TDSB brought in the Toronto Lands Corporation, an arms-length agency in charge of selling surplus land on behalf of the board, to oversee the proposal. Darryl Sage, TLC's chief executive, says it determined selling half an acre of the John Fisher lot would generate enough revenue to build a new school.
"You're looking at how best to maximize value to the benefit of the school board," he says.
But parents revolted at the idea of severing the small, one-acre school plot.
After the plan was axed, talks between Pemberton and the TDSB broke down. The plan was shelved.
"Someone dropped the ball," Mr. Silva says. "This shouldn't have happened."
In April, 2015, Pemberton filed an appeal to the OMB, stating the city had taken too long to respond to its original application. Ms. Keesmaat hastily drafted a report to City Council stating it did not support the development and recommended the city oppose it at the OMB. The report raised concerns about the building's height and setback, but acknowledged the city's chance of winning was slim.
With the city ready to fight the Pemberton proposal, Mary Mowbray, who chairs the school's tower committee, says parents expected the TDSB to join in and began e-mailing school officials. They were shocked when the board didn't show up at the August hearing.
School trustee Gerri Gershon, who also sits as a board member of the TLC, says the agency advised the TDSB not to take part. "We can't be going to the OMB with every concern, especially when we have people telling us we won't win."
If the TDSB had thought it could win, it would have gone, Mr. Parry says. "Our legal advice was your chances are pretty poor. It costs $50,000 each time at the OMB," he says, noting the TDSB recently contested a development next to Church Street Junior Public School in downtown Toronto and lost despite its concerns.
Councillor Jaye Robinson, who has supported the parents' campaign, thinks the TDSB made a "very big mistake" by not attending. "That development is on top of that schoolyard."
The city prepped for the OMB hearing on Aug. 11, 2015, Ms. Keesmaat says, but was worried about its chances, given the board's track record of overruling municipal planning in favour of larger developments. She says Pemberton's lawyer, Adam Brown, shot down the city objections and suggested mediation. Sensing it wasn't going well, the city agreed. The mediation started the next day. (Mr. Brown and Pemberton both declined to comment for this article.)
Peter Howden, a former OMB judge who has written a book about the board, says money rules at the OMB. Against well-funded developers, city officials and residents are at a decided disadvantage. "The cost element in this very much puts a chill on objectors," he says. "Money is the cancer that is eating away at the process."
The board encourages mediation as much as possible, says Bruce Krushelnicki, executive chair of the Environmental Lands Tribunal of Ontario, which oversees the OMB. Mediators are expected to be impartial and help parties "communicate and negotiate in good faith with each other."
Despite coming armed to fight the proposal with a planner, the Keewatin Neighbours Group, a local residents' association that has fought many developments, says it was told by the mediator, James McKenzie, the executive chair of the OMB, that the development was a foregone conclusion, according to Frank Gardiner, a group member. Ms. Keesmaat says she was told the same thing.
Mr. McKenzie declined to comment, saying in a statement that he is bound by the confidentiality rules.
There was a sense of vulnerability among the residents' group members, says Nancy Schmeler, a John Fisher parent who sat in on the proceedings. "These people were pressured," she says. "They were naive."
Members of the neighbourhood association were told that the developer was prepared to offer $30,000. The group's three chairs – Jo-anne Finegan, Keith McLean and Jane Fitzwilliam – detailed the payment in an e-mail to members that was shared with The Globe. The cheque from Erskine Park Holdings, a holding company belonging to Pemberton Group, was deposited in the association's account on Feb. 20, 2017.
The chairs of the Keewatin Neighbours Group declined to comment on the mediation or payment, citing confidentiality rules.
The payment led to an internal battle within the neighbours' group, as some members felt betrayed. "I like a level playing field and full disclosure," Mr. Gardiner says. "I think the community loses with these kinds of tactics."
Months later, with the appeal period past and anger still building, Ms. Robinson said she was so dismayed about what Keewatin group members told her about the mediation that she contacted Mr. Krushelnicki by phone to raise concerns. Ms. Wynne also met with Ms. Robinson and parent groups and followed up with Attorney-General Yasir Naqvi when the parents appealed to the office for help. Mr. Naqvi sent the file on to Mr. Krushelnicki, but did not order a review.
Despite the complaints, Mr. Krushelnicki says he doesn't have details of the 18-30 Erskine mediation and only knows that a settlement was reached. He says he has no knowledge of a payment to a residents' groups. "I'm not aware of that. I can't pass judgment on that."
"We don't supervise the contents of this unless we're called upon to do it."
He says money can change hands at a mediation under Section 37 of the city's Official Plan, which states that money can be paid to the city to improve parks, sidewalks and streets. "It should go to the city," Mr. Krushelnicki says. "The intent of Section 37 is that the municipality should receive the funds and distribute it in a way that it sees fit."
As a former OMB judge, Mr. Howden doesn't believe financial settlements made in meditations are illegal, but thinks they should be transparent. "The terms of these settlements should be made public."
The OMB issued a decision on the 18-30 Erskine application on Jan 6, 2016. At that meeting, it was revealed that Pemberton had sold the property to KG Group for $23.7-million. With the case decided, KG could start building its revised plan for a 35-storey rental property as soon as it obtained the requisite city permits.
At a meeting that fall, John Fisher parents were presented with a plan to lease a portion of John Fisher's playground to KG Group for a construction-staging area. They immediately opposed it.
"We were really shocked," Mr. Katz says, noting that in almost 45 years he's never seen such opposition to a project.
KG Group withdrew the staging proposal.
"We've done developments in very sensitive, high-traffic areas," Mr. Katz says, noting that other developments have taken place immediately next to elementary and high schools.
For parents, the fight is not over. They are worried about objects falling from balconies onto the playground and have hired a lawyer to ensure safety measures identified in an assessment are carried out.
"Parents should not have to do this at all," says parent Ms. Mowbray. "It's mind-boggling to me that the public will be paying for these risk measures."
The TDSB says it has communicated regularly with parents, but its efforts have been criticized for being reactive and disorganized.
The board acknowledges mistakes.
"When I reflect on what happened I sometimes think we didn't communicate as well as we should have," Ms. Gershon says.
Parents are being polled this week on whether students should be moved to another school during construction. The TDSB has also vowed to monitor contamination, noise, dust and student safety. The playgrounds will be relocated to more remote areas of the school property. New windows and air conditioning units will have to be installed, with a total mitigation bill standing at $750,000 according to the TDSB.
KG Group recently agreed to pay $500,000 to the school – a sum it says covers mitigation measures and tiebacks, long, supportive anchors that which will be drilled into TDSB land, potentially reducing its value.
With local schools over capacity, Ms. Gershon says there are no immediate plans to sell John Fisher. "Right now, we are in discussions with the developer and the city – we are assessing what we can accomplish. The discussions have been very positive."
Mr. Silva is disturbed by what he sees as a shaky path the TDSB is on. "The board is securing these kinds of deals with developers," he says. "They're doing it at the expense of the very policies that are used to protect their sites. It's hypocrisy."
But the TDSB warns that as the city grows, change is coming for other schools. There are 15 schools in areas in Toronto where high-rises are allowed by zoning and could soon spring up next door. "People are going to have to get used to 30-storey towers," Mr. Parry says.
New reforms to the OMB, which will limit developers' ability to challenge zoning regulations, mean the John Fisher planning battle is unlikely to be repeated, Ms. Keesmaat says. Still, she warns, the city and the school board are on a collision course. The TDSB has applied to the OMB to change the city's Official Plan that identifies school land as public space. The designation limits the board's ability to sell off land to generate revenue it desperately needs to build new schools.
"If they're selling off parkland to fund an underfunded school system, then the model is problematic," Ms. Keesmaat says. "If this goes to the OMB, the city's policy is that this is park space. It should hold. We will be fighting against the TDSB."