Transparency and accountability at Ont universities overdue: students
Allegations of financial mismanagement by senior administrators at York and Queens (both stories are below)... university presidents still pushing the government for loopholes and exemptions to any potential Freedom of Information legislation that would apply to universities... Trent's own financial, legal, accountability and transparency problems, not to mention the controversial DNA cluster project. The CFS calls on the province to bring accountability to universities and have them be subject to Freedom of Information legislation.
We at OurTrent want the best for Trent University. We believe that the best can only happen if Trent becomes transparent and accountable.
It is abundantly clear that President Patterson, her administration and board of governors need assistance to achieve the objective of becoming transparent and accountable. Don Tapscott (and his wife, Trent board member Anna Lopes) tell us that transparency is inevitable and that it cannot be avoided. Why is Trent management and its board trying their level best to do excactly what Tapscott and Lopes say cannot be done? Why even try to remain opaque? Who benefits from remaining secretive and beyond public scrutiny? What's the motivation to do so? Why not put that energy to better use towards transparency in the management of the university?
The call from CFS to bring the universities under Freedom of Information legislation is timely, and doubly so in the case of Trent. We applaud them.
Transparency and accountability at Ontario universities long overdue, say students "There is a growing concern over the idea that university administrators are exempt from disclosing details of the deals they are negotiating with corporate brokers," said Jesse Greener, Ontario Chairperson of the Canadian Federation of Students. "Surprisingly, university presidents are still pushing the government for loopholes and exemptions to any potential freedom of information legislation that would apply to universities. The apparent scandals at York and Queen's demonstrate more than ever that universities should be publicly accountable and transparent," said Greener. University presidents have long held that contracts with individuals and private corporations should remain secret and exempt from public scrutiny. Unlike other public institutions in Ontario and universities in almost every other province, Ontario university records are not accessible through Freedom of Information requests. "It is important that Ontarians have confidence in their public institutions," said Greener. "We need effective access to information legislation to ensure that our universities are making decisions that are in the best interests of education and research in Ontario." A recent Toronto Star article reported on allegations of untendered contracts being given to the business associates of officials at York University. The Globe and Mail and New York Times reported on allegations that former President Karen Hitchcock negotiated kickbacks while serving as the head of the State University of New York. Despite an ongoing ethics probe, Hitchcock was hired to the position of Principal of Queen's University. "In the current funding climate that requires Ontario universities to enter into an increasing number of public-private partnerships, the need for transparency and accountability has never been more acute," said Greener. "Students in Ontario are looking to the provincial government to enshrine effective Freedom of Information legislation and bring forward a budget that restores public funding for post-secondary education." The Canadian Federation is comprised of over For further information: |
Did York bungle university land deal?
Cash-strapped school may have lost millions
Board decided against publicly tendering property
By Kevin Donovan - Toronto Star -On-Line - February 26, 2005
York University is land rich but cash strapped. Like most post-secondary schools, it has too few dollars for its academic needs.
Blessed with the largest campus in Canada, York has started selling university land to boost its finances and create a community of homes on the school's barren edges.
But a Toronto Star investigation shows York may have lost millions of dollars in much-needed revenue by selling land to a developer in a $15.8 million deal that was not publicly tendered.
The Star also learned that a top university official who helped negotiate the deal on York's behalf is a close business associate of the chosen developer.
The university official is Joseph Sorbara, chairman of York University's land development agency, which handled the sale.
Howard Sokolowski is the developer. His successful firm, Tribute Communities, is now building 550 homes on former York campus land with hundreds more in the planning stage.
The story boils down to this: Sorbara, a developer in his own right, is in business with Tribute on other major construction projects and has investments in two Tribute companies. Sorbara championed Tribute as the best builder for the job, then was a key member of York's negotiating team when campus land was sold to Tribute. The land appears to have been sold for much less than it was worth.
York University, Sorbara and Sokolowski say everything on the sale was done properly.
Sorbara, in two letters to the Star, said he received no benefit from the deal and "any allegations of impropriety are untrue, offensive and totally without foundation."
York, also in a written statement, said finding the best developer — not the best price — was its goal. The school wanted a homebuilder with a track record for "socially sensitive" developments and Tribute fit the bill. York president Lorna Marsden and chairman Marshall Cohen refused numerous interview requests, as did Sorbara.
As to the appearance of conflict of interest, York said it was aware of Sorbara's business ties to Tribute and found it "helpful" to have him involved in negotiations. York and Sorbara both say Sorbara received no benefit from the deal.
Sokolowski, in an interview, said the project will be "sophisticated and first class." He said it's clear he and Sorbara have a business relationship, but that had no influence on the deal.
At York, some academics are questioning the sale. They've received few answers. They say the deal is shrouded in secrecy. Provincial freedom of information legislation does not apply to universities.
Economics professor Ricardo Grinspun, who sits on the university senate, objects to the sale.
"If the lands were sold at less than their full-market value, this is scandalous. Universities are a public trust. ... We need full disclosure," said Grinspun.
History professor David Noble wants an investigation.
"The university is always begging for money, saying they don't have sufficient funds," said Noble.
"And here, it seems, in their subterranean machinations that they have forfeited much-needed funds."
At the same time as new homes are springing up, Tribute's Sokolowski (a part-owner with businessman David Cynamon of the Toronto Argonauts) is building a $70 million football stadium at York.
Sokolowski's Argos' partnership is contributing $20 million to the stadium, passing the money through as a donation to York's charity, the York Foundation. The partnership will get a tax write-off for the contribution. The federal government will pay $27 million, the province $8 million and York University will contribute land and $15 million. Sokolowski sits on the board of the York Foundation, as does Sorbara, although Sorbara is not part of the Argos deal.
There's a flurry of deals taking place at York involving the same faces — friends and business associates who once studied at York. Critics suggest the university failed to look after its own best interests.
The new housing development is called "The Village at York University."
Tribute's glossy promotional material borrows from Horace and Shakespeare ("Carpe diem-Seize the day," "And a bit of forest to complete it," "My home of love") to inspire potential buyers. Tribute boasts the site is a "particularly beautiful location bordering the Black Creek Parklands."
The starting prices on houses, including townhomes, semis and detached styles, range from $279,990 to $458,990.
Owners will be treated like university alumni, and have free access to the university's fitness centre, indoor pool, gym, squash courts and outdoor tennis courts.
Owners will also have access to university theatrical and musical performances, a "full range of specialty instructional classes in dance, fitness, aquatics and martial arts, plus borrowing privileges at the university library.
About 450 homes are being built now, with 100 more to come. A second phase of similar size is about to be sold by York to Tribute.
Any student who has attended York knows that parts of the vast campus at Keele and Steeles Aves. in the old city of North York are a barren wasteland. In the 1960s, the province gave large tracts of farmland once designated for public housing to York University, a new school looking for a campus. York later added to that land by purchasing another parcel.
York has 47,000 students — the third-largest student body in Canada. Like other Ontario universities, it frequently pleads for more government funding, arguing that the province has the lowest per-capita university funding in Canada.
In 1988, York's board of governors decided to sell off unused land on the south portion of the 524-acre campus. In the high-priced days of the 1980s, York made a tidy profit by selling 22 acres to Bramalea. But Bramalea went bankrupt in 1995 before it could build the six planned condominium towers and York bought back the land.
The York board continued to toss around the idea. With vacant land increasingly scarce in Toronto, the university again saw a chance to make money.
Among the board members was Joseph Sorbara, an alumnus of York's Osgoode Hall law school. Sorbara was also a member of the York University Development Corporation. The YUDC is a York-owned agency assigned with developing land and buildings on the campus.
Sorbara, a lawyer and developer, had the natural experience to be a member of the YUDC. With brothers Greg and Edward, he has a development company called The Sorbara Group.
Eventually, he became chairman of the YUDC, also a voluntary position. As a volunteer member, he earns nothing from his committee and board appointments at York.
"Because my family has always been in the real estate business, I welcomed the opportunity to get involved with the Development Corporation," Sorbara stated in a recent university profile.
One of the strongest business relationships The Sorbara Group has is with Tribute Communities and its president, Howard Sokolowski. "There is clearly a business relationship with Sorbara Group and Tribute," Sokolowski said in an interview.
For example, Sorbara and Tribute worked together on major developments in Whitby and the Beach in Toronto. In Whitby, Sorbara Group is working with Tribute to develop a neighbourhood that will eventually be home to 10,000 people. The Sorbara Group, a major landowner, has sold land to Tribute for at least $75 million and earns 50 per cent of the net profit on each house built and sold by Tribute.
In the Beach, Tribute built 500 homes on the site of the former Greenwood Race Track. The Sorbara family's trust documents show that the Sorbaras have a 20 per cent interest in each of the two Tribute companies — Keywick Developments and Beach Neighbourhood Inc. — that developed the Beach site.
Those trust documents are filed at Queen's Park by Finance Minister Greg Sorbara as part of a biennial disclosure of financial holdings required of all members of provincial parliament. The documents describe holdings by the Sorbara family, but do not break them down among brothers Edward, Joseph and Greg. (Greg, because he is a government minister, has placed his holdings in a blind management trust and resigned as director of family companies).
It's clear from documents viewed by the Star and interviews conducted for this story that the Sorbara family and Tribute have been in business together since 1994.
In 1996, Tribute Homes became aware that York wanted to sell campus land. York had not advertised the land. Sokolowski said it was "public knowledge" due to the Bramalea bankruptcy.
Sokolowski told the Star he could not recall if Sorbara, a volunteer York official, mentioned the land to him.
Keen to start a new development at York, Tribute hired an urban design firm called MBTW and together they created a "concept plan" for a neighbourhood spanning 160 acres of York campus land.
Tribute brought that plan to York's development agency in the fall of 1996 and offered $200,000 per acre, plus $5,000 per home sold, Tribute's Sokolowski explained.
Joseph Sorbara was present when the idea was broached. Minutes of the meeting showed Sorbara, as a board member of YUDC, "declared an interest in Tribute Homes." However, he went on to deal with Tribute on behalf of the university.
In a written statement, York said it was well aware of Sorbara's involvement with Tribute. York said it was satisfied Sorbara was receiving "no benefit from any dealings the university had with any developer" and so decided he should be even more involved. "Mr. Sorbara was not asked to excuse himself from the process of discussion or negotiation; in fact, his participation was encouraged and was seen to be helpful."
The YUDC considered Tribute's proposal. It looked good, but the university decided it needed its own consultants. Following a competitive bidding process it hired MBTW, Tribute's urban design firm, to further flesh out the plans. MBTW, at the time, was working for the Sorbara Group on the Whitby project, and was working alongside Tribute and Sorbara in the Beach project.
A York source said Sorbara promoted Tribute as the best developer for the job. At one point, in 1997, Sorbara arranged for a trip by York officials to visit the Sorbara/Tribute development in Whitby (York officials confirm this). A mini-bus took them around the new neighbourhood and Sorbara and Tribute executives pointed out key features. University officials were treated to dinner at the Granite Club in Toronto afterward.
If the lands were sold at less than their full-market value, this is scandalous'
Ricardo Grinspun, a professor of economics at York
Planning for the York site took several years. MBTW refined the concept initially brought forward by Tribute.
Finally, in August 2001, York decided it was ready to sell some of its land. At the time, the real estate market was rising in Toronto.
Normally, when selling land, owners list the property publicly or send requests for proposals to a long list of developers. The idea is to expose the property to the market and maximize the return to the owner. This is typically done with institutions where a public trust is involved.
One industry expert interviewed by the Star said advertising a property makes sound financial sense.
"In a rising market the only way to be confident about getting the best price is to expose the property for sale through a competent brokerage," said Paul Fish of Altus Group, one of Canada's leading real estate appraisal companies.
York did not do this.
Instead of widely advertising the sale, York wrote a letter to Tribute and two other home developers in October 2001.
The letter the YUDC sent out states that the university wanted builders, "which have demonstrated strong results in the creation of high quality residential communities in the GTA."
York invited Tribute, Monarch and Great Gulf to bid. While all are good builders they represent only a fraction of the quality home-builders in the GTA, according to the Greater Toronto Homebuilders Association.
"The university did not solicit/advertise to every potential builder on the market," York said in a statement. "However the university chose a `middle ground' approach, by contacting builders with necessary expertise, reflecting the conditions it had set. The result was a fair process."
The three companies were given a quick, five-week window to bid (three months is the norm). Tribute, which had prepared the initial concept for the land in 1996, had a leg up in the process.
Great Gulf was not interested. Tribute and Monarch were.
York's development corporation asked its chairman, Joseph Sorbara, and then-president, Ron Hunt, to negotiate a deal with one or both developers.
York's development corporation's minutes state that it authorized "Messrs. Sorbara and Hunt to negotiate a development agreement with one or both of the builders."
However, Monarch ultimately did not bid. Tribute did.
A university official said the two other potential bidders found York's development guidelines too strict.
With Tribute selected, the YUDC had Sorbara and Hunt conduct negotiations, and Sorbara then made a presentation of the Tribute plan to the YUDC.
Sorbara, Hunt, and university lawyers negotiated the deal in late 2001 and early 2002. Minutes of various York meetings show Sorbara was involved in the deal.
In an interview, MBTW planner Stephen Wimmer, whose company worked first for Tribute then for the university, said Sorbara "guided the university's interest" throughout the sale process.
In a letter to the Star, Sorbara downplayed his role.
"I personally took very little part in the negotiations," he wrote. "I think I attended three meetings with Tribute, YUDC's lawyer and Tribute's lawyer for the purpose of resolving matters related to development issues, not price issues." Sorbara wrote that Hunt, the former YUDC president, was in charge of negotiations.
Hunt could not be reached for comment.
The terms of the land sale were hammered out and signed March 8, 2002. Tribute got to work on the site, but did not make a payment to York University until June, 2004, when the sale was formally registered. The parcel of land that sold was 42 acres, according to City of Toronto planning department records.
The University has also kicked in 10 acres for a storm water management facility and land for a city park. It sold to Tribute for $15.8 million, or $374,648 per acre (based on 42 acres).
The original idea that Tribute would also pay $5,000 per home sold was dropped because it would have been "too hard to monitor," a York official said.
According to the land sale documents, Tribute wrote a cheque to York for $4.4 million in June, 2004. Tribute then took a mortgage from York for the balance, with the terms requiring Tribute to pay York a portion of the balance when each home is sold. No interest on the mortgage has to be paid for one year.
The per-acre cost of $374,648 is low compared to other deals, the Star found.
Another deal, negotiated in the fall of 2003, brought a price of $879,817 per acre — more than double what York received.
Like York, the property was sold by a public institution. Unlike York, it was widely offered for sale to multiple bidders. The Worker's Safety and Insurance Board sold a 57-acre property at Wilson Ave. and Highway 400. Real estate experts said the Worker's Safety and Insurance Board property "surprised the market" and showed the importance of exposing a property to the market. A spokesman for the WSIB said the property was advertised in newspapers and identical information packages were distributed to all interested parties. "It was important to the WSIB that the disposition process be absolutely fair offering no special advantage to any prospective purchaser," said spokesman Michael Swart.
And three years before the York deal, a 21-acre property at Highway 401 and Weston Rd. sold for $392,194 per acre, nearly $20,000 more than the per-acre cost of the York land, yet at a time when the market was considerably weaker.
At York, it's unclear how the land price was arrived at.
Sorbara, in his letter to the Star, said the university's "marketing consultants" came up with the price and York advised Tribute that "the price had very little room for negotiation."
Tribute's Sokolowski said he came up with the price and made an offer. "There was significant negotiation," Sokolowski says.
When asked about the possibility Sorbara was in a conflict of interest, Sokolowski noted that Sorbara declared his interest in Tribute Communities back in 1996. "If he declared it, I don't think there was a conflict," said Sokolowski. He said Sorbara was "clearly" part of negotiations but "not the main negotiator."
York has completed the sale of a second parcel of land to Tribute, which also was not tendered. (Tribute had the first right of negotiation as part of its earlier deal.)
This second deal was negotiated by Bud Purves, the new president of the YUDC, and a former real estate executive who once managed the CN Tower for owner Trizec Hahn. Tribute paid $750,000 per acre for a parcel similar in size to the first parcel, according to Sokolowski.
Purves said he got a good deal for York. He said he used the Worker's Safety and Insurance Board property sale ($879,817 per acre) as his "benchmark."
"I think we got very good value on the deal I negotiated," Purves said in an interview. As to the first deal, Purves said York also got good value, but "Howard (Sokolowski) did very well on that sale." However, Purves pointed out that Sokolowski took a risk in building a brand new neighbourhood in an untested area.
The Star presented its findings to both York University president Lorna Marsden and York board of directors chairman Marshall Cohen. York meeting records show both Cohen and Marsden attended meetings where the land sale was discussed and approved.
Neither Cohen nor Marsden responded to five interview requests. However, York sent the Star a three-page statement, unsigned, on plain paper, which, according to a York spokesperson, was written with the help of university lawyers. York said it did not expose the property to the full market because "only a select number of builders specialize in this kind of development."
The York statement said the university wanted a builder with a "track record for socially sensitive or community-focused developments." York said that was more important than maximizing the price.
"To be clear, the university's intention from the outset was not simply to sell the land to the highest bidder," the statement reads.
York said it placed conditions on the sale of the land (the university does not identify the conditions) that may have meant a lower per-acre price.
As to Joseph Sorbara's role, York stresses it was aware of his financial connection to Tribute. While Sorbara was involved in negotiations, York states that the final agreement of purchase and sale was voted on by the university's board of governors.
York said it's a great deal for the university. "The university is satisfied that the land was sold for a competitive price and that the university will continue to benefit, since funds raised from the sale will be used for academic purposes."
with files from Dave Perkins
Kevin Donovan can be reached at (416) 869-4425 or kdonovan@thestar.ca
Queen's stands by embattled principal
News report says academic left last job amid allegations of ethical wrongdoing
By Caroline Alphonso
Globe and Mail - On-line February 26, 2005 page A8
Queen's University, one of Canada's most respected institutions of higher learning, is standing behind its new principal amid published reports that she faced an ethics complaint in her former position as president of the State University of New York at Albany.
A story in yesterday's New York Times said that Karen Hitchcock faced a complaint filed with the New York State Ethics Commission that alleged she tried to direct a construction contract to a developer in exchange for endowing a university chair that she could fill once she left her post as president.
Dr. Hitchcock said the allegations are false. She has also denied the claim that she sped up her departure from the college to avoid a potential ethics inquiry. According to the state law, employees can avoid liability by leaving state service, regardless of their actions while on the job.
Queen's officials said yesterday that Dr. Hitchcock disclosed the ethics complaint to them before her appointment to the university in May.
"Dr. Hitchcock was timely in her disclosure to the search committee and forthright in her answers," Chancellor Charles Baillie and John Rae, the chair of the board of trustees, said in a statement. "She categorically denied the allegations and prepared a full response to the questions posed by the Commission's staff in its confidential investigative process."
Queen's officials say they rechecked Dr. Hitchcock's references and went to new sources for information. "As a result of this due diligence, the committee reconfirmed its unanimous recommendation for her selection to the full board," the statement said.
"We support Dr. Hitchcock in her efforts to secure a satisfactory resolution to these critical issues," Queen's said yesterday.
When Dr. Hitchcock nabbed the top post at Queen's, she became the first female principal at the school.
Her appointment, however, raised a few eyebrows because she was relatively unknown in Canadian circles.
Sources wondered why an American was chosen rather than a Canadian to lead the university in Kingston, Ont.
Dr. Hitchcock wasn't available for comment yesterday, but in a statement she said that there was no substance to the claims that she had used her position as president to advance her personal interests.
The ethics commission had informed her of the complaints in April, six months after she had announced her intention to resign at the end of the academic year, which was in June, she said.
"The date of my resignation was not accelerated," she said in a statement.
"I have been privileged to have been appointed principal at Queen's University and will do everything in my power to honour the confidence that has been conferred on me."
Michael Whiteman, Dr. Hitchcock's lawyer in Albany, said he was surprised to see this issue come up again after his client responded "candidly and completely" to the ethics commission.
"Under state law, when her resignation became effective at the end of the academic year, the commission's jurisdiction ended," Mr. Whiteman said.
"We had supposed with the strong and complete denial of the complaints . . . and the passage of time, this was a matter that was behind her. And then it crept up in the last couple of days."
Dr. Hitchcock, born and raised in Long Island, N.Y., came to Queen's as a distinguished science scholar and experienced fundraiser, one of the key components of any top university position these days.
She had cultivated relationships with government and the private sector to obtain new facilities for research and teaching programs at Albany.
She was appointed president there in 1996.
She previously was a professor of anatomy and cell biology and professor of biological sciences at the University of Illinois in Chicago.
