Builder sues city of Brampton
Dominus seeks $20M in damages over changes to development deal
A lawsuit has been launched against the City of Brampton by the company that was awarded a halfbillion dollar downtown redevelopment deal, one that’s already the subject of a $28.5-million lawsuit against the city by a local developer disqualified from the bidding.
The notice of action filed by Dominus Capital Corp. seeks damages of $20 million, alleging the city breached its contractual obligations to move past the first phase of a proposed three-phase downtown redevelopment that would have been worth more than $500 million.
The claim states: “The Defendant’s denial of its obligation to proceed with Phase 2 has deprived the Plaintiffs of the profits they would have earned as the preferred proponent of Phase 2 and has damaged the Plaintiffs’ reputations.”
The notice of action initiating the lawsuit was filed with Ontario Superior Court Sept. 14, and the plaintiff now has 30 days to file a more detailed statement of claim outlining its allegations.
The City of Brampton told the Star in a statement that its response will be made in the courts.
The downtown redevelopment deal has been the focus of controversy in Brampton since 2011, when Dominus was selected for the project after the city used a procurement process that had never been used in Canada. Called “competitive dialogue,” it involved a higher level of non-disclosure, even to members of council, than typical procurements, in exchange for assurances from bidders that they were submitting their actual costs and would bear the risk of any overruns.
After an almost two-year delay in construction, the new city hall was completed late last year.
In its bid, partially revealed in a public report in March 2011, Dominus proposed to meet the requirements for the development under the Request For Proposal (RFP) in three phases, which included a city hall expansion, a new downtown library, new parking spaces, retail and other amenities.
But when council, led by former mayor Susan Fennell, approved Dominus for the job in a contentious 6-5 vote, it was only for the first phase, a $205-million city hall expansion, with the other two phases to follow if council approved them.
Under the deal, Dominus maintained ownership of the building for 25 years and the city paid an annual lease of $8.2 million for its use. Concerns continued to mount about the secrecy surrounding the deal after it was signed in 2011.
Councillors and residents questioned the cost for the first phase, saying it was far too high for a ninestorey city hall expansion, but city officials resisted releasing the exact square-foot costs of the project or details of how it was being financed, citing the secrecy provisions of the procurement method.
Councillors publicly expressed their frustration with then city manager Deborah Dubenofsky, who had championed the procurement process, unusual in Canada.
Council did not renew her contract in 2012 and voted against moving forward with the next phases of the downtown redevelopment project.
Dominus alleges the city signalled its intention to move forward with the next phase of the project in 2014 when it purchased a parcel of land needed for phase two that had earlier been secured with Dominus’s help.
“However, after acquiring the Phase 2 Additional Lands the Defendant denied its obligation to proceed” with the project, the notice of action states.
The contract with Dominus was for a 25-year partnership with the City of Brampton, and Fennell had advocated for the company when she tried to convince council to support senior staff’s selection of Dominus for the deal ahead of key votes in 2011.
In a surprise move, Dominus sold the building to Fengate LP in 2014, and it is being leased by the City of Brampton.
Local developer Inzola Group, which was disqualified from the bidding process in 2010, filed a $28.5-million lawsuit against the city, alleging staff misconduct in the original awarding of the deal.