The leadership of the Toronto Police Association (TPA) has taken the unusual step of reaching out to its members to defend itself amid allegations it mishandled the sale of its multi-million-dollar headquarters — after the developer the union sold the property to flipped it for over $4 million more than the purchase price.
CBC News has obtained a message the TPA’s board of directors sent out two weeks ago to its members, calling rumours of financial issues at the union “misinformation.”
The TPA, which represents 8,000 uniformed and civilian members of the Toronto Police Service, was responding to increasing concerns among the rank-and-file, according to a half dozen officers who spoke to CBC News on condition that they aren’t named in this story. They say some officers are even calling for a forensic audit of the union’s finances.
“Over the past few days your Board of Directors has been fielding phone calls and inquiries regarding misinformation being communicated amongst the general membership,” the message to TPA members reads.
“In particular the Board has been contacted about the financial state of the Toronto Police Association including the sale of the old building. There is no truth to this misinformation.”
Here’s a short timeline of the sale and the fallout:
- 2011 — TPA starts considering selling the North York properties.
- May 2013 — TPA President Mike McCormack says an estimated $5 million needed to bring properties up to standard.
- June 2014 — TPA sells property to Toronto developer for $7.4 million.
- August 2015 — Developer sells property to B.C.-based charity for $11.5 million.
- 2019 — Toronto police officers questioning the sale begin calling for a forensic audit.
- December 2019 — TPA issues memo to members calling rumours of financial issues within the association “misinformation.”
TPA members now questioning sale
CBC News has learned some TPA members, including union stewards, have been raising concerns regarding the sale of the union’s headquarters. Some, who spoke with CBC Toronto, say they’ve only recently been learning about key details of the sale.
“They’re even talking about it at parades,” one officer told CBC News. Parades are the meetings officers hold with their superiors before heading out on patrol.
The headquarters — located at 130 and 180 Yorkland Blvd, in the Highway 401 and Highway 404 area — had been owned by the association since 1968.
The properties were a popular meeting spot for police employees. Inside, there was a bar, a restaurant and banquet facility. They also housed offices for the TPA’s leadership and support staff.
Property bought by Toronto developer
Provincial land registry records reviewed by CBC News show the properties were sold on June 30, 2014 for $7.4 million. The buyer was a Toronto developer.
The records also show the TPA provided the developer a $4.8 million mortgage with an interest rate of 4.5 per cent.
The developer agreed to make monthly payments to the TPA of about $18,000.
But by early August 2015, the developer flipped the property — selling it to a charity based in British Columbia for $11.5 million.
It was a $4.1 million — or 55 per cent — profit in 13 months.
CBC News reviewed City of Toronto building records. They suggest the developer made no significant improvements to the property and did not apply for any permits to repair or restore it before selling to the charity.
The charity now uses it as a wellness and meditation centre.
Sale saved TPA ‘millions of dollars,’ president says
Since the initial sale, the TPA has been renting office space on the second floor of a building on Kennedy Road in Scarborough.
“The sale of the real estate was fully transparent. While no one can predict what direction the real estate market will go the decision to sell the building has saved the membership millions of dollars in cost savings,” TPA president Mike McCormack wrote in an emailed response to questions from CBC News.
McCormack also called the TPA decision to offer the developer the $4.8-million mortgage a good one.
“This mortgage was fully secured by the property and posed no risk to the membership. In fact, this investment provided a strong rate of return to the membership. Again, this information was disclosed to the membership and provided in the audited financial statements,” he added.
Why some officers question sale
The sale closed in 2014, but some police officers now tell CBC News they weren’t aware of specific details surrounding the transaction until recently, when some union stewards at local police divisions began circulating information about it.
They claim they didn’t know the property was sold for $4.1 million more than the TPA received, and that the TPA helped finance the sale.
It appears some of that information was only contained in provincial land registry records.
McCormack says the TPA has been open with its members and suggests calls for a forensic audit are unnecessary.
“We have contacted our members and re-sent the information on the sale of the building to our membership as it was included in the audited financial statements from 2014 and 2015,” he said in his email to CBC News.
Those statements suggest operating the headquarters drained more than $230,000 from the TPA’s budget in 2014.
By the end of 2015, the sale had boosted revenues by more than $6 million,” the statements suggest.
As the internal finger pointing within the police service continues, the TPA says it will respond to any concerns from its members at a board meeting later this month.
Why the TPA’s HQ was sold
According to information provided by McCormack and other documentation obtained by CBC News, the idea to sell the headquarters first came up in 2011.
By 2012, the TPA board had hired a “property consultant to provide expert advice and analysis on options available to the TPA,” according to McCormack.
In 2013, the union decided to forge ahead with the sale.
CBC News obtained the minutes of a TPA board meeting held in May of that year where McCormack raised the issue.
He cited upgrades the properties required that the union could seemingly not afford.
“It was estimated that approximately five million dollars would be required to bring the properties up to proper standards,” McCormack said at the meeting.
“After all options were evaluated and a comprehensive due diligence process was followed, it was determined that selling both 180 and 130 Yorkland properties and leasing was the best option for financial sustainability and maintaining core functions.”
McCormack also stated the proceeds of the sale would make it possible to temporarily reduce union dues by about 13 per cent.
Sale ‘not taken lightly’
The sale didn’t appear to raise many concerns at the meeting, according to the minutes.
Only one officer present questioned the TPA board about it, suggesting the entire membership should be allowed to vote on the sale.
“Mike stated that this process was not taken lightly, and that it was a team of experts in the business community that assisted in determining the best option to maintain the sustainability of the organization and its services to the membership,” the officer was told at the meeting.
A month later, the TPA board sent out a four-page document essentially saying it had determined operating their headquarters was expensive and the properties would be sold.