Therme released images of its redesigned plan for a spa at Ontario Place on Aug. 22, 2023. It said the smaller building and more parkland in the redesign was in response to community and city input.
Construction preparation for the Therme spa at Ontario Place in December 2024 includes the removal of trees to make way for the resort. Steve Russell/ɫɫ Star
Therme released images of its redesigned plan for a spa at Ontario Place on Aug. 22, 2023. It said the smaller building and more parkland in the redesign was in response to community and city input.
Angelique Moss is a ɫɫ-based lawyer and an occasional contributor to the ɫɫ Star and Canadian Affairs Magazine.
On Wednesday, Doug Ford once again faced reporters’ questions about the redevelopment of Ontario Place’s west island. These were sparked by a New York Times , the Austrian company slated to build a luxury spa on the island.
In its investigation, the Times reviewed various corporate filings and interviewed a dozen people involved in the company’s operations and the bidding process for the Ontario Place contract. The investigation concluded that Therme had “misrepresented itself, misleading the Ontario government and exaggerating its experience in its bid to secure the ɫɫ deal.” The investigation found that Therme “falsely presented itself as an industry player that operated as many as half a dozen spas in Europe.” In fact, Therme had only ever built and run one spa, located in Romania.
Though it seems unlikely the Ontario government will try to back out of the lease with Therme, let’s imagine for a second that it wanted to do just that. Would it be possible? The lease Therme signed to develop the west island doesn’t say that it has expertise operating spas or anything of the sort. But sometimes a court can look beyond the terms of a lease to determine a party’s rights. This was the case in a recent Ontario Court of Appeal decision, “Spot Coffee Park Place Inc. v. Concord Adex Investments Limited,” where the tenant, a coffee shop, succeeded in a lawsuit against its landlord for business losses. The landlord was found to have negligently misrepresented the availability of customer parking, and though customer parking wasn’t provided for in the lease, the landlord was found liable for the tenant’s losses.
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The situation with Therme is a very different scenario, though. Even if a court were prepared to look beyond the lease, the government would likely have to prove, among other things, not only that there was misrepresentation but that the misrepresentation was on a material issue which induced the government to sign the lease.
Whether or not there’s a legal remedy available, something stinks about this situation. To start with, it’s just straight up embarrassing to think that our government may have been bamboozled by a foreign wellness company with scant experience and shaky finances, to hand over, not only waterfront land, but hundreds of millions of taxpayers’ dollars. Yet this may well be what happened.
Գٲ’s about the Ontario Place redevelopment released late last year and referenced in the Times’ investigation, found that the due diligence process in place for the bids was severely lacking: “there was no significant documented analysis or research on the information in Therme’s submission … such as for revenue projections, costs, qualifications or experience.” Furthermore, the auditor’s report found that Infrastructure Ontario “did not conduct due diligence to ensure that spas cited by Therme in its submission were in fact owned and operated by Theme Group.”
It’s a stunning finding. But in retrospect, perhaps not that surprising. I say this because the process that resulted in Therme obtaining the Ontario Place contract was flawed from the get-go. As both the auditor and the Times investigation note, it proceeded as a real estate transaction, which is unusual. Normally, in large scale projects such as with Ontario Place, public procurement principles are utilized. The auditor’s report cites several examples of other publicly funded waterfront projects, both in Ontario and the United States, that followed a procurement process. This process included milestones such as early public engagement, requests for qualifications and proposals, a fairness monitor, and criteria and scoring that is disclosed to participants. There is rigour to the process which would be understood by the participants, both those who are bidding and those who are reviewing the bids.
Having a procurement process in place isn’t “red tape.” Rather, it’s meant to ensure that there is transparency, accountability, and fairness when awarding large contracts. Public procurement best practices were not followed with the Ontario Place redevelopment. This was by design, and one which Ontarians may end up paying dearly for.
Angelique Moss is a ɫɫ-based lawyer and an occasional contributor to the ɫɫ Star and Canadian Affairs Magazine.
Opinion articles are based on the author’s interpretations and judgments of facts, data and events. More details
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