Mondo Condo Makeover p.07
Who Jacked Your Jobs?
The number 7 is supposed to be a special number - lucky number, God's perfect number, google "significance of the number 7" and you'll get all kinds of mind-bending definitions. For that reason, we wanted Mondo 7 to be special, illuminating and mind-bending. A journey towards an answer to the question: Who jacked the hotel workers' jobs? Here we go:
"This is our hotel", UFCW representatives used to boast while swining and dining and getting waited on by their members at the Toronto Travelodge Yorkdale, the west end Toronto hotel that is the subject of our Mondo Condo series. "Our union owns it through its pension plan", the smug slobs would intone. For a lot of years, they got to feel like real estate tycoons while cooling their heels and being waited on by UFCW members.
Now the boasting's over. Only those who need to venture there do so, quietly, through the side doors, for fear of incurring the wrath of the hotel's workers - all of them soon to be laid off UFCW members. The union reps' game of "let's pretend we're big shots" has been replaced by another game, "let's pretend this is just a normal business closure".
The members have reason to be angry. For years now they've stood by and watched while the hotel, once a bustling mid-town spot frequented by business travelers and tourists, fell into disrepair. To some it seemed as though the owners were trying to run it into the ground. Many were unaware that one of the owners was their union's largest pension fund.
The Canadian Commercial Workers Industry Pension Plunge - sorry, we meant Plan - has been pouring money into the place since 1992, when it helped a self-admitted, ten times convicted, pedophile named Ronald Kelly buy the hotel and launch a real estate empire. Apart from loaning him almost twice what he paid to buy the place (he paid $9 million, CCWIPP loaned him $15 million), CCWIPP continued to pour even more millions into Kelly's pockets in relation to this hotel- $5 million here, $10 million there - in the years that followed.
When Kelly sold the hotel in 1998 - half to Royal Host REIT and half to another company that he controlled - CCWIPP loaned him and Royal Hotel even more millions. As at 2001, the pension plan had at least $25 million "invested" in the property - an amount about twice its value.
By that time Kelly had bailed out of his obligations to CCWIPP and run off to Panama, making the pension plan a 50% owner of the business. Instead of chasing Kelly down and wringing what he owed out of him through whatever legal means were at their disposal, the CCWIPP trustees became enmeshed in a scheme to convert the hotel into a condo. That scheme, fronted by a little-known local builder named Joe Ieradi, would result in the loss of jobs for over one hundred UFCW members. Whether that troubled UFCW leaders at all is just one of the mysteries that surround the past, present and future of this property.
In the almost four years since plans to convert the hotel to something that doesn't require hotel workers, UFCW officials have said nothing to the members who work there about what's going on and who's looking after the members' interests. Similarly, the thousands of UFCW members whose pension money seems to have disintegrated right along with the business in which it was invested, have been told diddly-squat about what had happened to their millions, why they were loaned to some molester with no business experience, where their millions went and why fellow UFCW members are now facing layoffs in an apparent exist strategy from their pension trustees' rotten investment decisions.
Zero to Chicken Shit
Two weeks ago staff at the hotel were handed layoff notices. They're out on the street as of April 5, 2005 - provided that the deal to sell the property to the developer (Mr. Ieradi we presume) goes through.
What happens if the deal doesn't "close" on that date? Nobody's saying. Apart from the typical risks associated with large building projects (such as getting the required financing), another thorny complication has reared its head in the Mondo Condo caper: A condition that the City of Toronto has placed on its approval of the conversion scheme. Back in October 2004, the City granted permission for the project to proceed on condition that the owner give the City (at no cost) a right of way through the property which would permit the construction of a City road. The road would bisect the hotel property from north to south, allowing residents from a new townhouse development south of the hotel direct access to the retail plaza and main street (Wilson Avenue) north of the hotel.
This condition presents a problem for the conversion project. The hotel building and its large above-ground parking garage take up most of the property. Running a road through it will be difficult without moving or removing the garage. That's a problem for the conversion project because there really isn't any other place to put a parking garage and condo buyers have been told that the existing parking garage is where the parking spots - which are part of the purchase price - will be. Despite this somewhat significant obstacle, prospective buyers continue to be told that the project is going ahead (in fact, has already started) and the converted condos will be ready for occupancy later this year, which parking in the garage.
Despite all these questions and the possibility that the scheme has hit a snag, the workers are being shown the door without any explanation of what's going on and, in some cases, without a nickel in severance pay.
As if to add insult to insult, it seems that while talk of converting the hotel to something that doesn't require hotel workers has been swirling around for a few years, their union - whose pension plan owns half of the place - neglected to bargain any severance provisions into their collective agreement.
So the workers are stuck with the minimum severance provisions of the Ontario Employment Standards Act which does not require severance pay for anyone with less than 5 years of service. Those lucky enough to have been there 5 years or longer will get 1 week's pay for each completed year of service. As if that's not shabby enough, "a week's pay" is based on a worker's average number of weekly hours in the weeks leading up to the closure. Few will work full time hours during this period, so their employers' obligations to them will be in the zero to chicken shit range.
Anger about the closure and the complete lack of support from their union is growing among the workers. It's bad enough that they've had to watch their workplace run itself into the ground (here are a few raving reviews). It's bad enough that they've had to watch the condo converter chase long time business away. Bad enough that they're getting hosed down and hustled out the door but to add insult to injury, their union has said zero to chicken shit about what's going on.
Who's buying the building? Where's the money for the conversion coming from? What happens if the deal doesn't close on April 5th? Everything's a secret.
To date, neither their Local nor National Office have told them anything. After considerable prodding and hints of embarrassing direct action, UFCW staffers offered up that they are "looking into things" and that some answers will be forthcoming on Monday (February 21, 2005). We're not holding our breath.
Murky Past, Muddy Future
It's doubtful that they will provide answers to the questions like: What the hell happened here? Why was this hotel run into the ground despite enormous investments from the union's pension fund? Why did investments that were supposed to be all about creating jobs - allowed to destroy jobs? And apart from what happened, let's talk about what's happening.
If this hotel's past is murky, the present and future are no less so. Some things about the conversion scheme itself have made us scratch our heads: Like the scale of the renovation that would be required to convert the building into condos and whether it can even be done. But what's going on at the two properties next door is also getting curioser and curioser has got some of us, less than trusting types, wondering whether there isn't a grander plan afoot - one that involves all three properties.
That a bunch of ambitious real estate dudes might want to do something that involves two or even all three of these properties makes a lot of sense. On its own, each property has its limitations - access to vehicular traffic being one of biggest (hence the City's demand for a bi-secting roadway). Combining two or all of them would enable construction of a much larger and potentially more lucrative project - in a neighbourhood that has been identified (a few years ago) by City officials as a prime target for redevelopment.
It sounds far-fetched but no more far-fetched than the odds of finding two developers intent on proceeding with two building projects, located side by side, without the necessary approvals. Check it out.
The property directly to the south of the hotel is the former home of an old Canadian Tire store. The store closed a couple of years ago and the land was purchased by a company called Independence Way Inc. Independence Way is associated with the Norstar Group - a local land developer. Since last summer, Norstar has been building a townhouse complex on the property. Permission for this project was also dependent upon the builder granting the City a right of way to construct the new north-south roadway and the owners did that prior to commencing their project. They did not, however, get other necessary permits. According to reports in the local media, since last summer, the Independence Way guys have brazenly ignored orders from the City to cease work on the project and City officials are considering legal action to put a stop to the project. Work on the project is continuing although slowly - really slowly. So far it's only a hole in the ground.
Neither Norstar Group nor Independence Way Inc. appear to be connected to the owners of the hotel or to Joe Ieradi's company Dacapa Construction. What is really curious though is that the building that houses the head offices of both companies - 2180 Steeles Ave. West in Concord, Ontario, is also home to the Service Employees International Union, Local 1.on. This could be a total fluke but when we look to the property on the north side of the hotel, we find a similar SEIU connection.
To the north of the hotel is a small retail plaza facing Wilson Ave. The property - 1077 Wilson Avenue - is owned by the City. Land registry records establish that, in 1999 it was leased through an unregistered agreement to a company called Rolling Hills Investments Inc. Rolling Hills was controlled by a guy named Joseph Chetti. A few months after Chetti leased the land from the City, Rolling Hills flipped the lease to a company called Cliff Point Estates. Cliff Point is a business controlled by Chetti and a guy by the name of Leo Aggozzino. Cliff Point built some retail space on the land, leasing some of it to Cara Operations which currently operates a Swiss Chalet Restaurant there. The buildings on this property are situated in a way that would allow the construction of the roadway that the City wants.
So what's so darned interesting about all that?
Well, to begin with Joe Chetti is guy who, by the time he leased the land north of the hotel, had been involved in a controversial real estate transaction involving the Ontario Realty Corporation. The ORC (a government real estate management agency) came under heavy criticism in the late 1990's for selling properties owned by Province at cut rate prices to real estate wheeler dealers who made huge profits by flipping them. The whole thing turned into a scandal that drew intense attention from the media and opposition political parties.
Mr. Chetti was one of the wheeler dealers who made a pile. Here's NDP leader Howard Hampton talking about him and others in the legislature in 1997:
Mr Howard Hampton (Kenora-Rainy River): My next question is for the Chair of Management Board. All of the most controversial land deals at the Ontario Realty Corp, where the taxpayers of Ontario have been swindled out of millions of dollars, have happened while you were the minister in charge: the Joseph Chetti case in Brampton, the Frank Gabriele situation in Mississauga, the 145 Eastern Avenue deal. Minister, section 85 of the Ministry of Government Services Act says: "Any disposal by the minister or the Ontario Realty Corp of real property or an interest therein is subject to the approval of the Lieutenant Governor in Council." Minister, tell us, did you go to cabinet and recommend those deals? Because that's the only way they could get past cabinet. Did you go to cabinet and recommend those deals?
... and then...
Mr Hampton: Minister, this is a bit unbelievable. You try to say that you're fixing the problem, but the fact of the matter is that the three biggest swindles happened while you have been the minister. You say you've taken action. The only action I can see is that you got your twin, Mr Miele, who was fresh from selling off federal land in another swindle, to come and help you. It boils down to this: You've presided over this. You've got to go. You can't sit here and claim that you're going to clean it up when you presided over it. As for your refusal to answer the question, it boils down to: Are you corrupt or are you merely incompetent?
So, when you've got a guy who was involved in one of the province's "three biggest (real estate) swindles" landlording next door to a place where some unusual shit's going down, it sort of piques our curiosity that there may be a connection.
As does the fact that Cliff Point Estates' office, at 75 The Donway West, in Don Mills, is located at the same building as SEIU Canada's head office. Maybe just another fluke but we have to wonder.
The Canadian SEIU and the UFCW are kissing cousins. Both unions operate along very similar lines and both are connected through a web of personal and business relationships. A former UFCW International rep named Ralph Ortlieb is part of the Ortlieb dynasty that has ruled the Canadian SEIU for a whole lot of years. Ralphie was a business partner of the late Thomas Corrigan, a shady union leader - whose Textile Processors Union with the UFCW back in 1996 just after "raiding" the hotel and taking its members away from the Hotel Employees and Restaurant Employees Union.
Ralphie and Tommy controlled a real estate holding company that owned the Textile Processors magnificent office building in Toronto's upscale Annex neighbourhood. Following the Textile Processors/UFCW merger, they sold the building to...John Evans, son of Cliff Evans and attorney to both the UFCW and SEIU, for a song - and $400,000. Ralphie and Johnny spent a couple of years flipping the place back and forth to each other before offloading it for a cool $1.2 million.
That gives you an idea of how "webbed up" the SEIU and UFCW are when it comes to real estate and making money thereon. But why stop there.
Shortly after the Textile Processors Union and UFCW merger, Ralphie became the President of UFCW Local 351 (formerly Textile Processors Local 351). He moved the Local's office to Hamilton, Ontario, to a building that was owned by - guess who? - Ron "come hither little boys" Kelly.
Ralphie left the UFCW a couple of years ago and is now running his own "independent" union - the Hotel, Hospitality and Casino Workers Union (sorry no web site, no phone listing) in the Niagara area. Ralph's wife Betty also runs a union - she's a VP of the International Union of Allied, Novelty & Production Workers, Local 905.
In their spare time Ralph and Betty run a venture capital fund called the Algonquin Power Venture Fund. While neither Ralph nor Betty's union has a web site, Algonquin Power has a nice one that tells us a bit about Mr. and Mrs. Ortlieb.
The sponsor of the Fund is the Hotel, Hospitality and Casino Workers Union (the "Sponsor"). The Sponsor represents approximately 485 employees by negotiating collective agreements, monitoring their application and advising and representing individual employees on matters affecting their employment. The Sponsor's members are individuals employed in the hotel, hospitality and casino food and beverage businesses in the Provinces of Ontario and British Columbia. The contact persons for the Sponsor are Ralph Ortlieb, who is the Sponsor's President and Betty Ortlieb, who is the Sponsor's Vice President. Mr. Ortlieb and Mrs. Ortlieb may be reached at the Sponsor's office which is located at 5200 Dorchester Road, Suite 22, Niagara Falls, Ontario, L2E 7M6. The Sponsor's telephone number is (905) 854-4732.
BETTY G. ORTLIEB - Director. Betty Ortlieb is Vice President and Business Representative of the International Union of Allied, Novelty & Production Workers, Local 905, a position she has held since 1997. As Vice President and Business Representative of the local union, Betty is an active voting member of the Executive Board of the Sponsor. Betty arranges membership meetings, handles grievances for the members of the local union and is a signing officer of legal documents and banking documents for the local union. Betty has been involved in the local union since 1997 and held a number of positions in the local union, including Financial Secretary and Recording Secretary. She is a graduate of the Labour College of Canada and has been an instructor in the education department of the Service Employees International Union Canada ("S.E.I.U.").
RALPH E. ORTLIEB - Director, Member of Investment Committee and Member of Audit and Valuation Committee. Ralph Ortlieb is Secretary-Treasurer and Business Manager of the International Union of Allied, Novelty & Production Workers, Local 905, a position he has held since 1999. As Secretary-Treasurer and Business Manager of the local union, Ralph is an active member of the Executive Board of the Sponsor, prepares budgets and oversees all financial transactions, is a signing authority for the local union and administers the day-to-day operations of the local union. Ralph has been involved in the local union since 1997 and has also held the position of President of the local union. He was the Director of Organizing for the Canadian Labour Congress and for S.E.I.U., Representative for UFCW International Union and President of UFCW Local 351.
See the web of connections? And the involvement of the UFCW-SEIU-connected Ortliebs in a fund that pumps money into new ventures?
It's quite amazing that a little independent union with 443 members can be the sponsor for a venture capital fund but hey, maybe the far-fetched isn't so far-fetched when it comes to real estate schemes that involve the UFCW/SEIU/Ron Kelly/CCWIPP and other exciting characters. It's also quite remarkable that the nice Mrs. Ortlieb is an International VP of a union that has been mired in corruption and pension plan scamming.
Solve the Puzzle - Do Your Own Sleuthing
We're not saying that there's anything nefarious going down. It's just very interesting. Members may want to ask their UFCW representatives if there is a long range plan for the three properties (or even two of them) that involves the Ortliebs or the SEIU or the Novelty and Production Workers or CCWIPP or all of them. If there is, it's a damned shame that their jobs are being sacrificed so that a bunch of third rate union representatives can play real estate tycoon. Ask your representatives about that and then ask them who jacked your jobs and why.
If they can't answer, call Cliff Evans. He's the Chairman of the CCWIPP Investment Committee - the group within CCWIPP that is responsible for checking out and approving investments. He was a Director of Ron Kelly's company, Kelloryn, when it first purchased the hotel in 1992 and he was President of all of the Propco Companies that funneled money to the hotel in the years that followed. He must know what's going on. Cliff's a tough guy to get hold of but here's a phone number where you might reach him (905) 854-4592. (You'll actually hear his voice in the recorded greeting! Well worth the long distance charge.)
If Cliff doesn't want to talk to you, try contacting the CCWIPP trustees. Call, fax or email them at the places where they work and ask them "who jacked my job"? Or - if you're a CCWIPP member - "where's my money?" The link to their names on www.ccwipp.org doesn't seem to be working, but here's an archived page with a current list.
You might also want to give SEIU Canadian honcho Sharlene Stewart a shout and ask her if there's any SEIU-related real estate activity planned at the Keele/Wilson intersection. Hey, it doesn't hurt to ask?
And let's not forget about the Ortliebs. Their venture capital fund even puts its phone number online. That's an invitation for phone calls. Give Ralphie a yell and say, "Ralph, do you who jacked me job? Got anything going down in Downsview?"
The City of Toronto Planning Department is also worth a phone call or even a visit. It's here that you can find out what's up in relation to any building and renovation projects, pending zoning and building permit applications, long range plans for neighbourhoods and business districts - you name it, if it involves changes to properties within our town, these guys have it. Best of all, they have to talk to you.
This is your hotel. It's your workplace. If the UFCW is an association of workers (as it's supposed to be) and its pension plan belongs to the members, then UFCW members who 50% of this place. There's no reason in the world that you shouldn't know what's going on - except maybe that it may make some people look like idiots or worse. If some guys have jacked your jobs, you're entitled to know who they are and why they're doing it. If those guys are your union representatives, you may want to do something about it.
It's only a mystery until you figure it out. Happy sleuthing.
Previous Mondo Condo articles: