THE CONVERSATION: A whistleblower blows

Hummel Properties headquarters, in St. Davids. VOICE PHOTO

In extended interview covering a range of East Fonthill issues, Rainer Hummel drops the gloves and comes out swinging

BY DAVE BURKET
VOICE Publisher

 

On the day before the start of the Canada Day long weekend, Rainer Hummel greets me in his headquarters’ reception area with an offer of coffee, then goes off to punch buttons on a sophisticated machine to make it happen. The building is empty—staff sent home for an early start to the holiday. And what a building it is. Originally a century-old canning factory, Hummel bought out his partner’s share in the St. David’s structure to save it, to prove that there was unique beauty hidden under the everyday ugly.

Hummel’s aircraft-hangar-like office is separated from a corridor by a glass wall that extends several meters to an open ceiling. Exposed wood beams discreetly suggest that

winter heating bills are no object. On Hummel’s desk, four monitors are arrayed in an arc, Mission Control-style. Tasteful art hangs on the walls. Retro toys shine under halogen lighting in a glass display case. We sit at a conference table cluttered with reports and charts—many of them related to East Fonthill. Out in the corridor a regal animal the size of a small mountain lion keeps a wary eye on me through the glass wall. Later I learn he’s an F2

Rainer Hummel. SUPPLIED PHOTO

Savannah cat, a cross between a wild African serval and a domestic cat, and his name is Mallee. Mallee knows a commoner when he sees one. Worse, media.

The 55-year-old Hummel’s wealth, accumulated over decades of business ventures, is evident both in his office furnishings and his personality. His casual style and an open-necked shirt don’t disguise someone accustomed to seeing orders followed, fools shown the door. If the line between confidence and arrogance is fuzzy, in Hummel both traits are woven together like 600 thread count linen. He holds nothing back on the problems he perceives in the East Fonthill project, and inside Pelham Town Hall.

The following has been edited for clarity and brevity, with some answers condensed or merged.

All right, so starting from the ground up here, you’re not a resident of Pelham. You’re not a councillor. You’re not an elected official of any kind. What prompted you to want to appear before Regional Council to make your presentation?

Well, it’s a combination of things going back a little over a year. And it originally started with my being approached by a representative of Fonthill Gardens [a subsidiary of the Allen Group, a GTA commercial developer] quite enthusiastically selling development charges and all the various benefits that go with it. And I know the Act reasonably well, mainly because I fought against development charges escalating as quickly as they have.

This is the Municipal Act?

The Municipal Act, yeah. And I just said, “You can’t do that.” “Sure. We have them. We got development charges in exchange for property. And we have way, way more development charges than we can ever use, so we’re selling them. And you get a five percent discount, and you get free security fees and free park fees.” Again, I said, “You can’t do that.” And that got me to thinking, so the conversation just ended at that point, and then I asked a few friends in the building community, “You ever heard of this?” And they said, “Yeah, we bought some.” “You did?” I said, “Do you not think there’s something wrong with that?” “No, not really. I don’t know. I saved myself a pile of money.” But all right, so— and that’s what led into other conversations, and I just kept asking questions. And then, a number of other things happened that really concerned me. One was the construction of Summersides Boulevard. The Town did a really good job buying two parcels, or expropriating, two parcels of land on Station Street. Now they maybe overpaid a little bit for them, but it was a very, very smart move. I have to give credit, they did a good job with that. But the rest I don’t understand. The rest of the road, the development community would have to build and give to the Town, give them the land and give them the road [anyway].

That’s mandated under the Municipal Act.

Yeah, absolutely. On the site of a development, the developer must build the road, give the Town the land, construct it to a specification that’s dictated by documents from the province. It’s called an “urban section”—a standard section of hollow road is built with sewers and water and all the rest. If the Town wants something different, we still have to build it but they have to pay the difference between urban section and whatever they want. All of a sudden, the Town has all this land for this massive road, which is one thing I started questioning, but then they started building the road. And that’s when the developer in me came up and said, “Hold on a second. First, how can you build this multi-million dollar road that you don’t have to build, the developer has to build? Second, how do you know what connects to it? I own the property that abuts it. Other developers own property that abuts it. You have no idea what our plan is going to be. You have no idea how many houses we’re putting in, how big the sewer has to be, how big the water line has to be.” At the end of the day, this bus is driven by town council on behalf of the taxpayer and if they want to drive that bus into a wall, is it anybody else’s problem to tell them to stop? Summersides Boulevard is a train wreck. No one in their right mind, no one in their right mind would build something like that.

And this is important because the road will— if those connections aren’t made when the road is first built—the road will have to be basically ripped up—

Completely torn up.

—to add the connections later.

Completely torn up. From my way of thinking, unless they magically invented a new way of land development, that entire road will have to be completely ripped up. So that tells me it’s built only for one reason, a political reason. Because there’s no engineering, no planning reason that you would ever build that road. I think it was built because it was a political promise made at the last election that, “I’m going to have this done. So come hell or high water, this is going to get done regardless of what the cost is to the taxpayer.” The prudent, judicious use of tax dollars is one of the primary responsibilities of our elected officials. You want to build monuments to your ego and build ice pads and community centers that nobody can afford—if people are dumb enough to vote for them, then that’s fine. That’s what the people voted for, that’s what you’re going to get. [Mayor Augustyn] promised that and he’s delivering on what he promised. I don’t have a problem with that. Do I think it makes financial sense? No, but that’s beside the point, that’s what people wanted. But this, I don’t believe the people are prepared to pay two-and-a-half million dollars for something that doesn’t need to be bought or doesn’t need to be paid for.

Let’s back up a little bit. Did you go to the Town after you were approached with the development charge credits, the offer to buy them, did you approach the Town to ask what was happening?

Not directly. I was in a conversation over another matter with the municipality. It was a planning-related issue. It involved the CAO, the director of planning, and some junior planners, and some of my staff, and we were trying to find some solutions. In the course of that conversation, the CAO sat beside me and I asked him, just off-hand during part of the conversation, “I don’t understand this. How does this work? I’ve never heard of that before and I don’t even think you can do that,” and he turned the page. He just changed the subject.

He didn’t respond in any substantive way?

He kind of said, “Well, no. There’s special ways that we sought legal counsel and, apparently, there is ways that you can do this, and our lawyer said that it was fine.” Now I know the Town’s lawyer, and I know him because he’s also Niagara-on-the-Lake’s lawyer and I’ve known him for 25 years. Very conservative.

This is Callum Shedden.

Callum Shedden. I know Callum to be a lawyer, municipal lawyer, who doesn’t care what the staff think and he doesn’t care what the council thinks. He only cares what’s good for the taxpayer, the Callum I know, his concern is what’s right for the taxpayer. So I thought to myself, there’s no way that this is Callum Shedden. It just didn’t add up. And I made a few inquiries and apparently there was a different lawyer used for that, and I don’t— I don’t know who he is. I don’t know anything about him, but apparently the Town used a different lawyer for their background information on that.

That does not necessarily explain why you’ve continued to push with your objections to the point that you wanted to appear at Regional Council. Anyone looking at this has to ask, what are your motivations? Do you have something personal— a personal grudge against the Mayor or Town Council?

I don’t. I don’t know the Mayor at all. I don’t know the guy and don’t care. I don’t know a single councilor. If one walked up to me, I couldn’t tell you if they were one or weren’t. I’ve just basically sat back and let these guys play developer with taxpayer’s money designing this thing. And I’ve said all along this is the stupidest thing I’ve ever seen. But, you know what? It’s not my job to educate these guys. If they want to be dumb with taxpayer’s money, that’s not my problem. But that’s not the issue. What happened was, I was asking questions about this. I was asking questions about this with builders, the business community, the Niagara Home Builders Association. If you talk to any builder, developer, they’ll all give you the same answer, “You don’t rock the boat because, all of the sudden, your projects will get stalled or your files will get lost.”

You’re talking about Pelham specifically?

No, any municipality. It’s not just Pelham. If you, as a builder, you start rocking the boat, your projects aren’t going to move along too quick. And it’s very easy to do because nobody’s paperwork is 100%. A town can find a hundred reasons why not to do something and only two why to do it. So we all know that. But I was asking a lot of questions behind the scenes, and I was certainly having several conversations with the representative of the Allen Group about other related things. But I was getting back to, “I don’t understand a whole lot of the stuff that’s gone on here.” And then what ended up happening was one of my projects was ready to move forward, a smaller one, and all of a sudden it was fraught with problems, problems I would’ve never had otherwise, never had before. And also I’m being turned down for the simplest, simplest things that simply don’t get turned down, approved five times in the last week and all of the sudden my name’s on the application and I’m turned down. So I file an Ontario Municipal Board appeal, then I file another Ontario Municipal Board appeal. Now I’m going to be, in another week or two, or a month, we’ll be filing our third OMB appeal. So I’m stalled, so—

And you think this is because you’ve rocked the boat?

Yeah, I think this is— I mean, this is my assessment. I may be completely wrong, what do I know? But it’s just odd that all of a sudden— this is not our first rodeo. Our company’s been doing this a long time. We’re reasonably good at it.

How long have you been in business?

Telcon Datvox I started when I was 20 years old. I’ve been there for 35 years, and we have just over a hundred, a hundred and five, employees there. There’s 17 companies in our portfolio. So one of our companies, Humboldt Properties, does land development. We’ve been doing that since 1988, and we’ve done projects throughout the Niagara region and Hamilton, and we own a fair bit of land here in St. David’s, in Fonthill, in Pelham. And we’ve owned this for a long time. We’ve been involved probably 10, 12 years ago in acquiring land in Pelham when the new secondary plan came out. And it’s been a very frustrated process, simply because what it’s taken Pelham 12 years to do, every municipality can do in two. They’ve just frittered away time and money, and it’s—

What are the delays?

Micro-management. It is absolute micro-management. Not letting people do their jobs. That’s why you have this massive turnover of staff in this community because there’s constant interference in the process, because people are building monuments to their own egos with other people’s money.

Who’s interfering?

The Mayor interferes and certain councils interfere, but the Mayor— no one can do anything without the nod of the Mayor. So if somebody breaks the tip of their pencil, they sit there and wait for the Mayor to come in. It’s absurd. [So] all of a sudden, we couldn’t get anything done. And the director of planning at the Town of Pelham—the Town’s very, very fortunate to have Barb Wiens as the Director of Planning. You’re very lucky to have her. She was a huge loss to us in Niagara-On-The-Lake. She’s a very, very solid, very honest, honest planner. I don’t think she’ll last there. We’ve always had a working relationship to come up with great solutions. She came up with a brilliant one on my project that solved everything and wrote a report, a planning impact analysis, that was, frankly, brilliant, and presented to council. It was turned down cold with absolutely no reasoning that made any kind of sense whatsoever. It was a brilliant, brilliant solution that their staff came up with and, I think, this Ms. Hanna, Julie Hanna, who’s now apparently left the Town, she was part of the creativity behind that together with the director, and it got turned down. It makes no sense. That’s when I said, “All right. Now somebody’s playing games with me.” So I let it be known, “Are you picking a fight with me?” And—

How did you let it be known?

I told the planning staff, “Are we going to war here? Is this what this is about? Does somebody want to pick a fight with me? Because ask around, you really don’t want to do that because I don’t back down. I’m not a builder who’s afraid. I’ve been doing this for 30 years. I’m conservative, I’m careful with my money, I—

And what was their answer?

It got turned down. Should it have been turned down? Don’t know, probably not, certainly not from a planning principle it shouldn’t have been.

That’s what planning staff were telling you?

Yeah. It wasn’t the director of planning but I’m not going to say who. But yeah, it shouldn’t have been turned down. And there is an email that said, “The Mayor came down and told us not to do it this way. That’s not what he wants. Change it.” And in professional credentials, when you have an opinion and you believe in something, that’s what you write down. And when a politician walks in and says, “That’s no longer your opinion, this is,” professional people, certainly those with higher levels of integrity, say, “No. Not going to do that.” And in this particular case, this was an individual who probably felt a considerable amount of pressure and correctly sent our staff an email and said, “Sorry, but we’ve been told we’re not allowed to do it this way.” And that’s when I knew.

Is that person still working at the Town?

Recently left. By the way, a brilliant young planner, going places.

So, moving along a little here, your main bone of contention at Regional Council was the valuation placed on property acquired by the Town from the Allen Group, $928,000 an acre. The appraisal that we’ve seen, after getting it through [a Freedom of Information request], was a little over $1 million an acre, and this was bumped back by the peer reviewer who, at this point, has declined to be identified. This raised red flags for you.

Huge, huge red flags. At first, I didn’t believe the number — it was so high — and I think I shared that with a number of people. I think the number is ridiculous. I couldn’t actually believe it until it was actually confirmed. And that was confirmed very recently, like in the last four weeks. And that’s when I said, “That’s enough. I’ve heard enough now. I want to know, who do I see about this?” And my initial reaction was the Ombudsman of Ontario, which I did contact to determine— and it’s really not necessarily their jurisdiction. I know from a debenture that was done for the town of Niagara-on-the-Lake—I think we have a three-and-a-half-million dollar debenture—it was underwritten by the Region. The Region, in a sense, co-signed the loan. And that’s when I thought to myself, “Well, the Region is the one who co-signed this loan.” So I called up the Region and said, “You guys co-signed this loan.” “No, we actually borrowed the money on behalf of Pelham. We borrowed. We borrowed on behalf of Niagara-on-the-Lake, all the other municipalities. So it’s our loan.” And that’s when I’m like, “Okay. You borrowed the money, do you know what it was spent on?” And so I queried several members of Regional Council. “Do you guys even know what this money was spent on?” “Yeah, it was spent on the community center.” “No, it wasn’t. Part of it was, but part of it wasn’t.” I said, “I’m telling you that they had to pay this money back somehow.” I looked at [Pelham’s] statements. My accounting staff did, and said they didn’t have any money. They had half a million dollars.

When you say, “Pay it back somehow,” you’re referring to the buyback of development charges credits that had been traded for the land valued at $928,000 an acre.

Yeah, when the [development] community was out buying these development charges, people started raising the red flag. And I’m not the only one frankly. The Niagara Home Builders Association, “Wait a minute. You can’t do this.” So it wasn’t just me. There were other people in the building community and development community. So it wasn’t just me, but it was me who had a bee in his bonnet because all of a sudden I’m the so-called whistleblower, and all of a sudden everything I’m doing is being turned down. So yeah. Was I motivated by something? No question. Absolutely I’m motivated by something. You attack me. You drop the gloves. We’re going toe-to-toe. It’s that simple. It’s that simple.

So the actual valuation— you’ve seen the appraisal. There is something called an “extraordinary assumption” that is an integral part of the number. Have you seen something like this before?

I have actually. Extraordinary assumptions can be put into appraisals, and the reason is an appraiser is a professional. So they have professional liability errors and omissions insurance. If they’re going to make a statement about something, and it is outside of what they normally would see, and they’re not certain what their appraisal is being used for, they will include the clause “extraordinary assumptions.” And in this case, the extraordinary assumption was that the entire property is completely developed, serviced, individual lots. That’s what it’s worth. And—

So just to be clear, the assumption here is that, instead of empty land—

In the middle of nowhere.

—in the middle of nowhere, these are now individual lots that have already been supplied hydro, water—

Sewer, roads, streetlights.

Sewer, everything, cable TV, whatever.

They’re construction-permit-ready.

Ready to be handed over to a developer to build houses.

And actually the way the appraisal’s written, it says the day before the building permit is issued. That’s how it’s written. So—

Why is that important?

So the appraisal in this case appears to me to be more an appraisal being done for the purposes of a builder paying his park dedication fee to the Town, not what the land is worth. I’ve seen this before, but not used for this purpose.

“This purpose” being?

Park land. Park dedications are actually done completely differently. A park dedication appraisal is done the day before the development is approved, so it’s still raw land. There’s nothing on it, and then you have to deduct the cost of the development to that point, the paperwork. That gets deducted. So lets say a piece of park land is worth— the day before the development’s approved, it’s worth $200,000 an acre. Now you deduct the cost of bringing it to that stage, which is about $30,000 an acre. And then, believe it or not, you deduct the developer’s profit. The developer’s profit on a project like this is about 15%. So then you take another $30,000 off. So now you come to $140,000. That’s the value of the land for the park dedication purposes, and that’s what we pay on. They’ve reversed this.

So this appraisal completely throws that out the window?

It’s total and utter nonsense.

From a layman’s perspective— and that’s very much what I am. For our readers who look at this and say, “Wait a minute. This is an appraisal based on a situation that doesn’t exist. It’s as if we said, ‘Come in and appraise our house, but assume that we’ve added a story. We’ve added a pool. We’ve added a tennis court, and we have a helicopter landing pad in the back. Now tell us what our house is worth.'” Isn’t that what’s happened here?

Actually, yes, in one way, you could us that analogy. The accurate analogy is: I have a pile of glass. I have a pile of plastic, and I have a pile of steel. These things, all manufactured, are a new Mercedes. What’s the value of a new Mercedes? $140,000. But I have a pile of $300 worth of glass, $500 worth of plastic, and $900 worth of steel. That’s what I have. They’re not a Mercedes. All those components could be made into one, but they’re not. It’s just a pile of junk, and until you make the Mercedes, there’s no value to it. The Town paid for a complete, ready-to-drive-down-the-street Mercedes, and all they got was a pile of junk. A pile of plastic, steel and glass. That’s the analogy.

In front of Regional Council, you theorized that the only reason you could come up with that the deal was done this way was as, I think you phrased it, as a “backdoor bonus” to the developer. Could you clarify that, expand on that a little bit?

Well, bonusing is where a municipality wants to entice a particular individual, a company, to come to their community. It’s called bonusing. It’s illegal. Bonusing is, “I want GM to come to Niagara-on-the-Lake. I don’t want them to build in Niagara Falls. I’m going to offer them free property taxes for 10 years.” That’s bonusing. “I’m going to offer to build them a road. I’m going to give them $100,000 towards their first foundation.” That’s bonusing. Ontario doesn’t allow that so communities don’t pit against one another, and it’s a good law. Its been around the books for decades. It’s not legal. And the reason I speculate bonusing, is because of who the developer is. It’s the Allen Group. They’re great people. They’re a great development company. David Allen is a man of— I don’t know him personally, but his reputation has no blemishes. He has a tremendous amount of integrity. A very close friend of mine is a close friend of his, and when he tells me this is an absolute gentleman, I believe it. David Allen would never do something like that untoward. He just wouldn’t. He doesn’t need to.

Then how do you explain what’s transpired here?

If, politically, somebody is motivated to have something happen and a businessman says, “It doesn’t make sense to me at this point in time,” and then somebody makes it make sense—

In other words, you’re talking about an offer too good to refuse.

An offer too good to refuse. And every business person, developer, does nothing illegal for cutting the best deal you can. If you can out-negotiate the idiot on the other side, you win. They lose. There’s nothing illegal, there’s nothing wrong with that. If it was me in David Allen’s shoes, I’d have done the same thing. I would have cut that deal in two seconds flat. My job is to get as much as I can for myself and my shareholders. If you’ve got a council that’s too stupid or too blind to understand what they’re doing, and you take advantage of them, there’s nothing wrong with that. There’s absolutely nothing wrong with that—

From a business perspective, you’re saying. Morally, maybe it’s not so hot.

Even morally. Their responsibility is to take care of business on behalf of the taxpayer. If they want to build a monument to their ego and want to use the taxpayer’s money to do it, and you could take advantage of that, it’s not your problem. It is not your problem to be the moral compass of the elected officials. It isn’t.

Even at the risk of being the recipient of a bonus that’s not permitted under provincial law?

It is not illegal for me to take it. It’s illegal to offer it. That’s what the law says. If somebody wants to build me a road to my new factory, I’m not going to say no. A municipality wants to upgrade its infrastructure—which is what’s happened here. The municipality decided to upgrade its infrastructure.

I think a lot of people will be shocked to learn that it’s illegal to offer but not illegal to accept.

Yep, it’s true. The laws are funny in that respect. Because the businessman is simply cutting the best deal he can for his company. And a municipality has to operate in the best interest of the taxpayer. And that means they have rules and regulations that they have to follow. That rule and regulation doesn’t apply to the developer. We can cut the best— we’re private enterprise, we can cut the best deal we can. And if the municipality is, I’m going to use a word, unfortunately, that doesn’t maybe necessarily apply, but stupid enough to make a deal like that, I have a 100% right to take advantage of it.

In front of council, you said this was either the most corrupted process you’d ever seen, or the stupidest.

Yeah, one of the two. And that the question actually I’d like to ask the Mayor, which is it? Because there’s no other explanation. This is either the stupidest process I’ve ever seen someone go through or the most corrupted process I’ve ever seen someone through.

Have you attempted to contact the Mayor directly? Or has he reached out to you?

No.

How about David Allen, from the Allen Group?

I did receive a telephone call from a representative from the Allen Group about a month ago, asking me what the hell I thought I was doing, and would I please back down? And I said no.

Any other contact since then?

No, I expect to hear from their lawyers, but I haven’t said— I’ve vetted this through my attorneys, and I haven’t said anything, in my opinion, that constitutes anything other than the facts, so bring it on. Third point was the math. So when the Town went to borrow the money or asked the Region to borrow the money on their behalf, the Region obviously want to know, “Well, what’s your budget? And in that, the Town chose $12 million coming from the development charges, and when I saw that— it didn’t hit me at first, until I thought, $12 million? I recall Pelham’s development charges being like, thirteen or fourteen hundred dollars for recreation. How the hell can they get to $12 million?

That’s a fixed fee, it doesn’t depend on the value of the house or the property?

It’s a fixed amount, and so that’s when I looked it up, and I realized I was actually wrong. That the amount was—. The amount was originally— let’s just go to their own bylaw. Where did I have that? Sorry, here it is. So you can see here, the Parks and Recreation in 2004 was $1,250 per home being built. In 2008 it went to $1,600. And then, recently, they changed how they deal with it and they call it something different. So when they changed the schedule in 2014—

We’re looking at bylaw 3527, 2014 schedule of Town-wide development charges.

Right. So when they changed in 2014, they separated out outdoor recreation from indoor recreation. Before, the two were combined and it was $1,400. It went from $1,400 to $2,609 plus $1,011. So it went to $3,600 from $1,400. So the Town already doubled the amount that they charge for recreational services and they — you’ve got to give them credit how they did it — they split it out. But indoor recreational services, they can collect $1,011 per house. That’s it. That’s to build arenas and community centers and washrooms and structures that have indoor facilities.

Can’t be used to buy land?

Can’t use it to buy land. That’s park dedication. That’s something entirely different. It’s not on this. It’s not part of the development charges. Development charges, by law, cannot be used to buy park land. The Act is very clear. So the Town showed in its budget $12 million to build their recreational facility. At $1,000 per unit you have to build twelve thousand homes in Pelham in order to get to $12 million. You can’t get there. If you built on every square inch, every square inch of Pelham, you can build 3,300 homes. By their own numbers.

That’s the projected— what’s the term, maximum build-out? In 2030, something like that?

2041. In 2041, the maximum build-out is 3,300 [more] homes. That’s $3 million. They said they have $12 million. Where? You’re $9 million short. So either they have to take this number and multiply it exponentially, which has never been approved, which has never been part of a public process. Never has the building community seen that. So you’re budgeting for something that doesn’t exist. Then the other thing that I question, they show $15 million in land that they can sell. I’d love to know where this is, because their own audited statements say they have $12 million-worth of real estate to sell. And then this mythical budget or this budget they presented to Regional Council, it showed $15 million. And I guess my question there is simply, why would you not tell the Regional Councillors making a decision to borrow money on your behalf, the truth?

Why do you doubt that the $15 million figure is correct? Or are you doubting that both figures may not be accurate?

I just bought land for $160,000 an acre six months ago. It closed in November of 2016, seven months ago. And I paid $160,000 an acre. So I would like to know where this piece of land is. I’d like to know how big it is. And I’ll give you a rough idea of what I think it’s worth. I could ask my appraisers what they think it’s worth. I’ve got a funny feeling it isn’t $12 million, although that’s what the audit statements say. And if that’s what they say, fine. But they listed it as $15 million, $3 million higher. So between the $9 million missing in the development charges, and the $3 million overvalue in the land, you’re $12 million behind the eight ball on a $36 million build. Can’t get there. Somewhere, they have to go back, and they’ve now borrowed $33 million as of last night. In my opinion, you’re $12 million short. You already have the highest per-capita debt in the Region, higher than the top two municipalities combined. And now you pretty much know you have to add more debt because you can’t finish building the thing you’ve got under construction, because you spent part of the money and you overestimated your budget.

The loan was also a factor in your coming forward?

It’s one of the reasons I wanted to be on the agenda last night. One thing was because of the Audit Committee meeting that happened a month ago, where the Mayor of Pelham presented certain things that I found somewhat questionable. I hope I answered some of those last night. And then, I had also heard that Pelham was going in to borrow another $12 million last night. Second draw. They borrow $21 million and their second draw was $12 million. And that needed Council approval last night. And so I thought, “Well, if you’re going to go borrow another $12 million, are you telling the truth this time?” So I don’t know. We’ll see once the paperwork on that comes out.

The vote to approve that passed. Did you hope that your presentation would make a difference?

They have to approve it. The Regional Council doesn’t have a choice because the Town’s already spending the money. They owe contractors. I’m pretty sure Pelham could sue the Region if they didn’t approve it because the first draw was approved. You were given an overall budget. So if I’m Mr. Pelham, I’m saying, “Mr. Region, you approved $36 million. We drew down $21 million of that. We’re under construction. We’re spending and, all of a sudden, we need the next draw, the next $12 million, and you say, ‘No.’ What do we do? Leave this hulk of a building half-built?” So I’m not disappointed because I expected it to be approved. What I think you have to look at is the vote. Not everybody voted to approve it because I think some flags were raised. I think, because some of the questions that were asked of me afterwards, like, “We didn’t know this. We didn’t know this. And we’re concerned now.” A particular councilor came out to talk to me right after I walked out of the Council chambers and he said, “Wow, we just kind of automatically assume everyone’s telling the truth and we just vote yes. We don’t even question these things.” He said, “We have to start questioning these things. We just can’t automatically approve it. We’re going to do a better job.” And I’ve heard from others, a couple that I really never had any contact with or even know, and they said they had absolutely no idea how this worked or how this was done. They said, even parts of what I presented, they said, it’s still confusing to them. They don’t completely understand the printing of development charges and then how that actually works. So they were quite shocked by this. And I guess my comment back is, “Well, if you, the people that we entrust for your stewardship over these things, don’t understand it, how does the public understand it?” I had text messages sent to me like, “What the heck? Why didn’t you say something earlier?” I said, “Well, I’ve kind of been saying stuff for awhile.”

Where do you hope that this goes?

Well, the problem is, I think the Town’s spending money the taxpayer doesn’t have. My serious concern is in the next five, eight years, the Town is going to be facing a significant tax increase. What I would hope comes out of this is that the entire East Fonthill secondary plan gets another look because this is not the only thing that’s wrong. I’m telling you there’s a lot of things wrong here. I’m not talking from a community perspective because communities don’t necessarily look at bottom-line dollars and cents — they probably shouldn’t — but when I look at this strictly from a business model perspective, this model’s broken. This is not sustainable. What Pelham is building in East Pelham, in East Fonthill, is an absolutely unsustainable, financially unsustainable community. The taxpayer cannot cover the cost of this thing. Even though the developers are going to build it and we’re going to hand it over to them— if they stop building it on their own, that is. But the maintenance of this, what they’re creating, is not sustainable.

Well, I think that’s a topic for a future conversation. I appreciate your time.

Thank you.

For how the appraisers reached their valuation for the East Fonthill land discussed above, see Anatomy of a land deal: Appraisal alchemy: http://www.thevoiceofpelham.ca/anatomy

For Hummel’s appearance before Regional Council, see Developer: East Fonthill process “corrupted”:  http://www.thevoiceofpelham.ca/developer

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The Voice of Pelham
Pelham's independent news source from the heart of Niagara.