Is Farhi Furious

The City better start being nice to him if we want him to do development work here! And maybe it is, finally. Just keep on reading

Would you blame him for being angry? He wanted to build a first-class condo project downtown and he might have lost the site to the University and still may to St. Clair College. The City may have to expropriate his land if a major Educational complex is still to be built downtown! Does the City think that they could just buy him off with expropriation money to make him feel better?

It is so difficult to find out things in this town because of the disease known as in cameraitis. Just as the City Hall amnesia pandemic has spread, it appears that the City Hall illness of in cameraitis is now affecting the University. Just ask Gord Henderson since he was the practitioner who discovered its spread.

I am sure that a number of people in town would have been interested in knowing which properties downtown might have needed to be expropriated for the University expansion, say for residences for students. Of course, if the Board of the University had an open meeting and if all other relevant materials were open to the public, then we would know and would not have to speculate as I am doing.

The guy who must have been on pins and needles about all of this must have been Shmuel Farhi. He is the gentleman from London who owns the 110 acre Lear plant that he purchased for $8 million in 2005. Remember that he sold 40 acres of it to the City for $4 million along with getting the prime piece of waterfront land west of the Art Gallery of Windsor worth around $2 million. That is what the City paid for the property in 1999 when it bought it from the Art Gallery. I have no idea if it increased in value from 1999 or not.

Nevertheless in a very smart business deal, he got at least $6M for a third of the property. Who says Windsor real estate is dropping with that kind of an escalation in price in such a short period. Rest assured that our Council knows what it is doing with real estate even though

• "Coun. Joanne Gignac, a member of the arena steering committee, said she had no idea what Fahri originally paid for the land. "The ($4 million) was a price council thought was reasonable," she said. "We then included the property on Riverside Drive. Rather than pay (more) cash."

Perhaps she might be interested in buying my house so I can retire to the warm climates with all of this snow we get here. I hope she maintains the same attitude when I tell her how much I want for my place. I want a million dollars so I can live on the beach in Florida. I think my price is reasonable although I paid a small fraction of that amount to buy it originally. Think she will go for it?

It looks to me that the City may be doing to Mr. Farhi what has been done to other business people who want to invest in the City. Are we trying to chase him away too?

In an interview in the Star he said:

• “Farhi said he will use the year to line up potential buyers for a "first-class" condominium development overlooking Windsor's waterfront, with retail on the ground floor.
  
  "The building next to the Art Gallery is going to warrant a first- class facility," he said in a telephone interview Tuesday. "I am not building anything unless it is first class..."
  
  "If we see other opportunities in Windsor, trust me, I have deep pockets and I will spend money in Windsor."

No wonder a Star reporter gushed all over him saying:

• “Windsor city officials are right to be rolling out the red carpet for people like Farhi. Anyone who thinks Farhi will negatively impact anything should think again."

He is obviously pretty smart too. In 2006 he foresaw

• “the Lear plant moving to an industrial area in a few years, which would pave the way for him and other landowners in the area to create a commercial and recreational hub surrounding the new arena. "This place, the way I see it, it is going to be transformed into a new development."

Now that the plant is closing, he can build this new development to the advantage of the City.

Isn't he the kind of go-getter we need in Windsor? Are we making him feel welcome? I just hope we don’t scare him away from the City. Consider these facts and tell me what you think:

• The land that the City gave him downtown as part of the swap was not “clean.” It had an old brewery foundation left on it. What kind of a way is that to do business or to treat a newcomer? Fortunately, the City agreed to spend the $200,000 to clean up the site (Later we learned that “Farhi has agreed to reduce the city's cost in the transaction by $100,000")
• Initially, Farhi wished to build the complex within a year. Unfortunately, the economic position of our City has so messed up that it appears that Farhi could not develop it right away and “will have up to three years to take ownership of the property.” I mean, who would buy a river front condo in this City right now. Just ask a few of the developers who have buildings up now what their sales are like. Did we sell him a lemon of a property?

If the City had paid cash, we would have none of these issues and he would not think badly of City Hall.

• Was his property one of those that was to be expropriated for the University? Who knows?Councillor Halberstadt mentioned the E-word in one of his BLOGs when he referred to “expropriation costs.” I had heard that the University’s architects had suggested that perhaps more land might be needed for the Engineering Complex if it was to locate in the downtown.

The poor man comes into our City and wants to build his magnificent structure on the river that could be a signature development for our City and we almost turned around but for the University deal falling apart and perhaps expropriated his land. What a slap in the face that would be. In all good faith, he does a deal with the City and then the City almost takes away his property for the University before he can even get started.

How can anybody do business with a City that would do that? I guess all that would happen was that there would be a huge fight over the amount of money that he would get because his first-class development was expropriated even before he was able to put a shovel in the ground. Sure he might be able to walk away with millions and millions of dollars above his purchase price but look at what he would be losing. That project would have made his name a household word as a developer in our town. It would not surprise me to see him take his money and leave Windsor. Another unhappy business person who has dealt with us and who would have reason to badmouth us.

I hope the City can make it up to him. I hope he is not mad at us. But the point is moot anyway. The University is not moving downtown. Now poor Mr. Farhi has to be concerned about another Strasser/Francis deal that might result in him losing this gem of a property.

I think but I do not know exactly if the City IS trying to be nice to him finally. I saw this strange entry in the KPMG "Audit findings report to the Audit Committee" for the year ended December, 2007.

• "On January 17, 2007 the City entered into an agreement with a third-party to exchange property relating to the arena project. As part of the agreement, the City was required to grant a credit of $1,375,000 to the third party. Subsequent to year end, the third-party exercised their option to have the credit paid out in cash. It was determined through our procedures over the search for unrecorded liabilities that said amount had not been accrued at year-end. Administration has subsequently recorded an accrual impacting the capital fund and accrued liabilities.

"Was required" was a strange phrase to use.

Now I have no idea what any of this means. I did see this in a Star story:

• "Coun. Dave Brister, chairman of the arena steering committee, also appeared not to know the riverfront land had not been transferred to Fahri and he was not paying taxes.
  
  He deferred following an arena project committee meeting Monday to parks and recreation director Don Sadler, who has been overseeing the project.
  
  Sadler explained the tax free break for Fahri as a credit against building fees for what he might be billed for anything he constructs prior to the end of 2008.
  
  "He will be responsible for fees at any later date," Sadler said.
  
  Even though the valuable riverfront property remains in the city's name today: "It's (Fahri's) property no matter what," Sadler said."

I hope that one of the traditional media journalists could do a follow-up and find out what is going on.

Perhaps we have made Mr. Farhi smile just a little bit. Maybe, just maybe, he will stick around here to wait and see what else can be done in Windsor.