Developer Andrew Marquess was slapped with a $70,000 penalty and forfeited a $100,000 deposit after altering a park design inside a new condominium project west of McPhillips Street.
City council's property and development committee was told Marquess erected two buildings without permits on a part of his site he had agreed to set aside for a community park.
"Without coming for a rezoning, (Marquess) built residential units on space that was not zoned appropriately and without permits," committee chairman Coun. Jeff Browaty said.
In addition to losing the $100,000 deposit, the penalty for the loss of parkland was originally set at $250,000 by councillors on the local community committee.
The penalty was lowered to $70,000 on the recommendation of ward councillor Mike Pagtakhan, without objection from the city administration.
The $170,000 will be directed to the Point Douglas ward land-dedication reserve fund, which finances recreational facilities and new park sites.
Marquess said he's being improperly cast as the bad guy in this scenario.
He said he still plans to build a park the same size as the original, only its shape has changed because of the building locations.
Marquess said the park remains 20,400 square feet but will now be T-shaped instead of a rectangle.
He said two buildings encroached on the opposite ends of the original park site, but he provided additional parkland to compensate for land lost to the buildings and all the original park amenities and equipment.
"The administration didn't feel the new design was as usable as it once was," Marquess said, adding he did not dispute losing the $100,000 deposit or the additional $70,000 penalty.
"Whether it's a rectangle or a T-shape, it's still the same size and we're still putting all the playground equipment as before," Marquess said. "I'm moving forward with the park for the community's benefit."
He had bought the townhouse project, known as McPhillips Commons, in 2007. There were already 12 townhouse buildings on the site and Marquess planned to renovate them and construct seven additional buildings for a total of 340 units.
The project, near Mountain Avenue and McPhillips Street west of the Lincoln Hotel, is now known as Terra Commons.
Marquess also bought a city park adjacent to the townhouse project and committed to setting aside the same amount of land as park space in the middle of the development.
The city issued a stop-work order in late May 2013 when staff became aware part of the two buildings had been constructed on portions of the park site.
Browaty said the city can't be faulted for the actions of a developer.
"We don't have an inspector on every corner," Browaty said. "We're doing the best we can to rectify the situation."
As part of the settlement with the city, Marquess will be allowed to finish work on those two buildings.
Browaty said city staff will be closely monitoring how he builds the altered park site, adding the designs must be approved by city staff.
In addition to the Terra Commons project, Marquess is behind the residential redevelopment of the Fort Rouge rail yards and converted the former downtown Sheraton Hotel on Smith Street into apartment units.