In 2023 the developer Michael Rice was interviewed under oath by the Integrity Commissioner, David Wake, who was conducting an investigation into the conduct of the former municipal affairs and housing minister Steve Clark in connection with the Greenbelt scandal. 

Witnesses appearing before the Integrity Commissioner promise to tell the truth.

Rice told the Commissioner he was gifting a site for a new hospital. At no point did he say his immediate neighbour to the south, John Dunlap, was also minded to gift land for precisely the same purpose. I would have thought this relevant.

Pellegrini knew 

King Mayor, Steve Pellegrini, who cannot always be relied upon to tell the truth, knew from at least the second week of March 2020 that the wealthy King landowner and Southlake Board member, John Dunlap, was prepared to gift land for a new hospital. It is impossible to believe Pellegrini did not mention this to Michael Rice. (The undated letter from Dunlap to Mayor Pellegrini (right) was received in the Mayor's Office "around the first or second week of March 2020" according to a new disclosure from King Municipality.)

On 3 May 2022 Rice entered into an agreement to purchase the Bathurst lands though the sale was not completed until 15 September 2022.

Pellegrini met Rice face-to-face on at least three occasions in 2022 to discuss the developer’s plans to donate land to Southlake. On 10 August 2022 they met for lunch at the Terra restaurant in Richmond Hill. On 17 October 2022 they met again at King Municipal Centre for a “Southlake Hospital Expansion pre-meeting” to prepare for the one with Southlake’s Arden Krystal and John Marshman on 1 November 2022. This is when Rice made his offer to gift Greenbelt land to Southlake for a peppercorn. 

Inconceivable

It is inconceivable those present at the "Southlake Hospital Expansion" pre-meeting - involving Pellegrini, King's Director of Growth Management and professional planner, Stephen Naylor, Michael Rice and his policy chief, John McGovern - were unaware of Dunlap’s offer of land.

We don't yet know the exact location of the proposed hospital nor its precise footprint. We don’t know where any other ancillary medical buildings were planned to be built. Nor where any Long-Term-Care facility would be located. But we know from Rice’s evidence to the Integrity Commissioner that the hospital would be on his lands. In his report published on 30 August 2023 the Integrity Commissioner writes:

[290] Mr. Rice explained that if he had known in the summer of 2022 that the King Township property would be removed from the Greenbelt, he would not have entered into the discussions about using part of this particular site for the hospital. However, he told me that given his earlier discussions, he is “committed” and “sticking to it” with respect to making land available for the hospital. 

I am left wondering why Rice didn’t mention Dunlap’s offer of land. This is the enduring mystery. Would the proposed hospital straddle the Greenbelt lands owned by Rice and Dunlap as always seemed likely to me? If so, the two men must have discussed this. 

Dunlap preps Pellegrini

In an undated letter – which must have been sent after 20 July 2020 - Dunlap wrote to Pellegrini to prep him in advance of his meeting with Southlake's Chief Executive, Arden Krystal. The letter confirmed Dunlap’s wish to donate land and attached maps showing the location his property and road access to it. (see right) 

So far, this is very straightforward. It was public knowledge from at least April 2021 that Southlake was looking for a second site for a new hospital. What was unknown to those outside the golden circle was Dunlap’s involvement.

Was Dunlap obliged to declare an interest to the Southlake Board? I don’t know. But I expect to hear something next month on this point.

Southlake’s former Chief Executive, Arden Krystal, has never publicly acknowledged Dunlap’s offer.  

Sequence of Events

On 27 November 2023 Arden Krystal explained the sequence of events in a letter to Southlake’s Privacy Office:

"In the spring of 2022, the Ministry of Health announced a $5M grant to Southlake to plan a new redevelopment. This brought attention from local landowners, donors, and our Foundation, as everyone was curious about where this new build would be. During that time, our VP of Capital and Facilities, John Marshman, and I were approached by a range of community members, including local mayors, identifying potential parcels of land. None of this was formal as we had not yet convened our Board Land acquisition Committee. I had a number of conversations with local developers introduced by donors and/or Foundation staff during fundraising and other community events. Notes were not taken as these were solely conversations at an extremely high level. It was in this way that I also approached the November 1, 2022 meeting with Mayor Pellegrini and Michael Rice."

 "Towards the end of September 2022, I received a phone call from Mayor Steve Pellegrini. I believed he called my office line since I have no record of his call on my cell phone. On that call he suggested that he may have a potential land donor that I should speak with. I agreed for his office to contact my assistant to schedule a meeting. That meeting was set up for November 1, 2022 at the King Township Offices. There were no other calls, emails or texts exchanged other than a text to my cell from Mayor Pellegrini on September 26, 2022 at 3:04 pm that stated: "We will co-ordinate. Daniel our CAO will be in contact." Subsequent to that, calendar invites were extended and these have already been shared with your office

“During the November 1, 2022 meeting, discussions remained hypothetical and high-level with no commitment to action. It was merely a discussion of potential opportunities since the land in question was in the Greenbelt and, therefore, unavailable in its current state. Even if the land had been available, we were not in a position to provide meaningful commitment as Southlake had not even convened its formal strategic process for redevelopment.

After that meeting, I had an informal discussion about the potential opportunity with our VP of Capital and Facilities, John Marshman. Notes were not generated from this discussion, given its casual nature. I reserved the opportunity for formal discussion and accurate note-taking to the more appropriate forum, which would be the formal evaluations required for any upcoming Land Acquisition selection process.”

On 15 September 2022 Rice bought the Bathurst lands for $80M. On 27 or 28 September 2022 he met Steve Clark's Chief of Staff, Ryan Amato, at his (Rice's) offices in Markham. He gave Amato a bundle of papers including a rationale for developing the Bathurst lands. But there was no mention of a hospital.

We don’t know when John Dunlap told Arden Krystal that he was prepared to donate his 108 acres of Greenbelt land at Bathurst and Davis Drive West for a new hospital. He told Pellegrini he would continue

“to work with Southlake on a donation process”

... if Pellegrini thought the idea had merit.

Dunlap's 108 acres was enough for Southlake's purposes.

But now it has all turned to dust.

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Blog updated on 2 February 2024 to indicate that Dunlap's letter to Pellegrini - shown above right - was received in March 2020.

From the Integrity Commissioner's 30 August 2023 report on Steve Clark

[288] My staff interviewed the mayor and chief administrative officer of King Township. Both confirmed that in the summer of 2022 the mayor raised with Mr. Rice the possibility of using some of this land for a hospital. The mayor explained that he was of the view that a hospital located within King Township would be very beneficial to his community and it was his understanding that, unlike other types of development, hospitals were permitted to be built on Greenbelt lands and not subject to the sewage treatment allocation rules that could potentially limit residential development in the area. The mayor explained that other lands in the vicinity had already been discussed as a possible hospital site and that if Mr. Rice contributed land from his recently purchased property, he believed it would potentially be a viable option for the hospital and a significant benefit for King Township. 

[289] Both Mr. Rice and Mr. McGovern, who also attended the meeting with the mayor and the chief administrative officer, told me these officials initiated the conversation about using some of this particular piece of land as a new hospital site. They also told me that Mr. Rice had already been discussing using other properties he owned in the region for the new hospital site and provided documentation to support his evidence in this regard with respect to past communications with hospital officials and other sites under consideration. With respect to the King Township site, Mr. Rice and his employee told me they were interested in the hospital option, as they anticipated they would be able to potentially develop medical buildings, a long- term care facility and other long-term assets on land that was in the Greenbelt and not necessarily available for other types of development. 

[290] Mr. Rice explained that if he had known in the summer of 2022 that the King Township property would be removed from the Greenbelt, he would not have entered into the discussions about using part of this particular site for the hospital. However, he told me that given his earlier discussions, he is “committed” and “sticking to it” with respect to making land available for the hospital.