Developer Katasa Group is withdrawing a controversial $300,000 donation to the city of Ottawa, saying the debate around it “appears to be more political than community-oriented.”
The donation, which was negotiated by Capital Ward Coun. Shawn Menard, was the first to be used for traffic calming measures and affordable housing in the district to offset the impact of a 22-story skyscraper Katasa is building at the corner of Carling and Bronson avenues. But the council voted to amend the unsigned agreement so that the money would be shared among the 24 districts.
In a statement issued Monday, Katasa Group said it will find another way to spend the money that will directly benefit the community, possibly by building a new play structure on its property on Cambridge Street.
“The draft agreement was proposed by Councilor Shawn Menard on behalf of the City of Ottawa and was intended to help ensure that neighborhood residents benefit from the improvements they have requested, as our project was a big change for the neighborhood,” Katasa’s statement reads. .
“We agreed to this donation because a city official presented it as a program that is normally requested from developers and that this donation was intended to help the community around the project. Unfortunately, last week we learned that this donation will not go to the surrounding community and these requests have not been a typical program offered by the city. We believe this was part of the process and now we know it is not,” he said.
Several councilors objected when the Katasa MoU was presented to the city council last week, leading to a bitter debate.
“This doesn’t pass the smell test,” Orleans East-Cumberland County said. Matthew Luloff said at the time. “I have it on good authority that this developer felt pressured by this councilor to make this contribution and he understood that this is simply the way we do things in Ottawa.”
At one point, Luloff compared Katasa’s donation to a “slush fund.”
That accusation drew a sharp rebuke from Menard.
“Feel free to provide evidence of that, Councilman,” Menard said in response to Luloff. “But don’t say those things unless you have some evidence to back it up. Because he is atrocious.”
Menard said Monday that he respects Katasa’s decision to withdraw from the unsigned memorandum of understanding (MOU), but called it a loss for the city. MOUs or similar community benefit agreements have been used in Ottawa in the past and are common in other municipalities, he said. Katasa’s deal had been approved by the city’s legal department and integrity commissioner.
“That’s exactly how it’s supposed to work,” Menard said.
“The community raised issues, the developer works with the community and the representatives of that community, which is me, and finds a solution so that development issues like road safety are mitigated. “That is our job as councilors,” he stated.
“It’s definitely a loss because of the policy that was introduced.”
During its debate last week, the council voted to establish a formal policy to handle such donation agreements in the future.
Mayor Mark Sutcliffe, who last week supported a council motion to establish a formal policy for such agreements, said Monday that he now favors rejecting them altogether.
“This raises too many questions and we have to maintain the highest possible standards,” Sutcliffe said. “So instead of having a policy in the future, I think we should just say that from now on we will not accept these voluntary contributions.”
Instead of deals with the city, Sutcliffe said he would like to see developers make contributions to third-party groups like Ottawa Community Housing or the Ottawa Boys and Girls Club. If things like traffic calming measures are needed, Sutcliffe said they should be paid for out of the city budget, not out of developers’ pockets.
Katasa highlighted the council’s division in his statement on Monday.
“The debate over this donation appears to be more political than community, we have decided to withdraw our donation while we consider other options, such as investing it in a playground located at the rear of our property on Cambridge Street. In the current situation, we believe this is the best way to ensure that the community directly benefits from this donation. Katasa decided it was the best outcome for the community.”
“I warned that this could happen,” Menard said Monday. “I’m disappointed in this, obviously, particularly with some council members, but ultimately I respect the decision the developer is making.”
As Randall Denley wrote in a column for this newspaper following the donation debate, Katasa was founded by Gatineau businessman Samir Chowieri, who has a documented criminal record for Radio-Canada’s Enquête research program. “Chowieri was convicted of conspiracy to traffic drugs in 1981 and sentenced in Hull court to two years in prison,” Radio-Canada reported.
“A year later, according to records, Chowieri was sentenced to 18 months for conspiracy to commit fraud, for having purchased 12.5 tons of cheese without paying the supplier,” Enquête reported. “Chowieri received a pardon for his past crimes in 2014 from the Parole Board of Canada, a spokesperson for the businessman told Radio-Canada in an email statement.”
Radio-Canada reported then that in 2002, “Mr. Chowieri was also found guilty of tax evasion for passing off personal expenses as business expenses of his company, CHO Brothers. He was fined $125,000.”
Chowieri’s company paid 5.5 million dollars to resolve a class-action lawsuit filed after 47 residents died of COVID-19 at a now-closed Quebec long-term care home owned by Katasa.
The statement issued on Monday said that for the past three years, Katasa Group has been “under the exclusive management of Katherine, Tanya and Samantha Chowieri,” who are the daughters of Samir Chowieri. Samir Chowieri remains registered in the Quebec commercial register as president of the company.
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