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End of the line for local developer

 

End of the line for local developer

John Best

With the release of an adverse LPAT ruling Marino Rakovac’s quarter-century dispute with the city of Hamilton appears to be at an end. At issue was an auto wrecking yard Rakovac purchased in 1995, at Bay and Tiffany Streets, hoping to redevelop the property as medium-density residential. Rakovac had claimed that the city’s negligent actions created multiple delays in his ability to secure the necessary zoning that would allow the project to go forward. When Rakovac sued for compensation, it meant that he no longer qualified for a city ERASE grant that would have provided funding for environmental remediation of the site.

The LPAT ruling dismissed Rakovak’ s $33 Million lawsuit without a hearing on the grounds that the property was never expropriated by the city and therefor no compensation was warranted. The decisions scarcely mentioned the sequence of events that were essentially at the heart of Rakovac’s dispute the with the city—namely whether or not the city’s actions frustrated Rakovac’s ability to develop his property.

In 2016, the Bay Observer published a story on the matter which provides a chronology of the events that took it to that point in time: The story in a slightly redacted form follows:

For Mario Rakovac his dream of building a medium density residential complex on a former autowrecking yard in the West Harbour precinct long ago turned into a legal and bureaucratic nightmare. The developer says his plan was thwarted through city planners and lawyers who took him through a Kafkaesque journey that has devastated him financially.

Marino Rakovac first became interested in a housing project on the site at Bay Street north, in 1995 when the city issued an early West Harbour development plan. Two years later, after meeting with city officials and receiving encouragement for his plan, Rakovac purchased the old White Star Auto Wrecking yard at Bay and Murray Streets with the intention of cleaning up the property and building a residential complex. In 2000 an agreement was struck with the city. As part of the deal with the city, Mario’s company would pay back taxes owed by the previous owner. For its part the city would provide the developers with a grant to remediate the property under the city’s ERASE program, and allow the property to be re-zoned. But in the same year the city asked Mario to put the plans on a temporary hold because the city had decided to  proceed with its own plan to re-zone a number of properties in the area, including Mario’s property, and would pay all of the OMB costs involved. Marino agreed.

But nothing happened for three years and then in 2003 the city put all re-zoning on hold as Hamilton, in pursuit of a Commonwealth Games bid, had developed plans to build a stadium in the West Harbour. The games ultimately were awarded to New Delhi and the city resumed its planning for residential development, culminating with the Setting Sails master plan in 2004. Mario was back in business, or so he thought. Up to this point the property had continued to be operated as an auto wrecking yard, but in 2005 the city asked Mario to cease the wrecking operation which created a further drain on finances. A full three years passed with no apparent action on the city’s promise to re-zone the property. A statement of claim says the city hesitated because they were afraid of offending CN Rail who had filed an objection to residential development that would conflict with its shunting operations in the area. At the time Mario’s lawyer Tony Powell said the city “ran for cover” when CN filed its appeal. By 2008 the city was once again floating plans for a stadium in the area—this time in pursuit of the Pan-Am Games. Once again Mario’s project was on hold.

Marino says that In 2010 as the city started acquiring land in the West Harbour for the stadium, they compensated various property owners not only for their expropriated land, but also for business losses. Staff did not offer compensation to Marino who took the matter to then Ward 2 Councillor Bob Bratina. Bratina authored a motion, seconded by the late Bernie Morelli and unanimously passed by council, to direct staff to consider compensating Marino for his losses due to the delays. Staff reportedly have said they did consider the matter and the answer is no.

In 2011 a meeting was held between Marino, city staff, former Mayor DiIanni and councillor Terry Whitehead in an attempt to mediate a solution, but no agreement was reached. Finally in 2012 Mario, his  funds depleted after 17 years of inaction and delays in his development application, filed a $5 Million lawsuit.

But Mario’s legal action has created a Catch 22. The city of Hamilton has a policy that blocks anyone engaged in legal action against the city to participate in any of the funding programs available to developers—the ERASE program that supports environmental remediation, nor the fund that supports downtown residential development. Staff told Mario he must drop his lawsuit in order to proceed, something Marino says he cannot do because he will be unable to proceed without some financial compensation from the city. The remediation alone cost $1.5 Million

At the end of next month, a full quarter of a century after Mario Rakovak first dreamed of developing the West Harbour lands, he will face off against the City at a Local Planning Appeal Tribunal (LPAT) hearing. Ironically the city is apparently asking that the matter be dismissed because the Statute of Limitations has expired. “This is crazy, “says Mario, “It’s the city that has created all the delays, and now will try to use them as grounds for dismissal.” To get ready for the LPAT hearing, at which Mario will represent himself, he has tried to access some city reports to help buttress his case, but he has been cut off from accessing any heretofore public documents that touch on the lawsuit. A City attorney, recently instructed his colleagues in an email, “please direct Mr. Rakovac to cease contacting staff on this. There are questions here that are clearly related to our active litigation, and (Rakovac) is not permitted to contact City staff with these kinds of questions without first checking with me and getting my consent.”

Asked to comment, Ward 14 Councillor Terry Whitehead who tried to broker a deal a few years back said, “On ethics, he has a case. We bankrupt somebody because he can’t afford his legal case. Big government shouldn’t be doing this. We shouldn’t be creating losers.” Adding, “We could pay him out of the ERASE program without prejudice.”

Larry DiIanni who also tried to find a resolution to the impasse said, “I don’t know if it was deliberate or not but there seems to have been a level of unfairness, he got squeezed out. Legal staff didn’t think he had a case and suggested he try to get councillors to help, but they didn’t want to go forward because he had no legal support.”  DiIanni said that Mario believed that a former senior city staffer “never properly presented the full picture to council and Mario was disadvantaged, adding, “the city could fix this. They could work out a deal. There’s always a political decision.”

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