Historic Article

Winnipeg Free Press - PRINT EDITION

Covert meeting cited in judgment

By: Staff Writer

28/05/2007 3:55 AM | Comments: 0

A secret meeting in August 1987 at a cottage in Gimli between senior members of the City of Winnipeg's planning department and developer Jack Levit formed a key component in a $4.7-million judgment against the city.

Evidence at the trial found that after receiving mortgage funding, Lakeview started construction of a large strip mall on Pembina Highway without the necessary building permits. Lakeview officials pressured the city to issue a building permit, but the project didn't have enough room for the required number of parking spaces. Construction should never have started.

Broke zoning rules

Former senior officials from the city's planning department admitted they broke the zoning rules by allowing Lakeview to claim the private roadway as part of the property it controlled, giving it the appearance of having the necessary square footage for the additional parking spaces.

Kennedy said evidence showed the planning staff came up with this plan even though they knew that another company, Banquet Barons, had been given control of the roadway several years earlier, and that Lakeview couldn't legally claim it as its own.

Kennedy said the secret meeting took place at the Gimli cottage owned by Roy Darke, the former head of the planning department and a friend of Lakeview president Jack Levit. In addition to Darke, other people at the meeting included senior planning staff Doug Kalcsics, Christine Knoll and Al Franklin -- all four no longer work for the city -- and Jack Levit and his son Keith.

Knoll testified at the trial that she didn't think the deal worked out with Lakeview at Darke's cottage complied with the city's parking requirements and that the project didn't qualify for a building permit.

Kennedy said he thought it was unusual that the city hadn't called Darke as a witness at the trial, but speculated that Darke didn't want to testify about what he knew.

"The Gimli meeting was at his cottage, he participated in the discussion and by the evidence he was a friend of Mr. Levit of Lakeview," Kennedy wrote of Darke's role in the secret meeting.

"He was clearly the senior person and having called the meeting, I would draw the inference that he may have had to make admissions he did not wish to make."

Ruling upheld

Even though construction of the plaza was completed, it was never leased out because nearby business tenants went to court on the grounds that Lakeview was improperly using their dedicated parking spots for other tenants. A Queen's Bench ruling supported the disgruntled business tenants and that ruling was upheld by the Manitoba Court of Appeal. An appeal was made to the Supreme Court of Canada, which declined to hear the case.

With the courts siding with the disgruntled tenants, the city was unable to issue the necessary occupancy permits that Lakeview needed to lease the property. Evidence at the trial found that without tenants, the Lakeview project was unable to make any mortgage payments and it ultimately defaulted on the mortgage.

The plaza was later demolished and the property sold to another developer who attracted major retailers including Office Depot and Sport Mart. The Southwood Supper Club is still on the site.

aldo.santin@freepress.mb.ca

Republished from the Winnipeg Free Press print edition May 28, 2007 $sourceSection$sourcePage

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