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Sorbara tenants face big rent hike

Toronto Star - Wednesday, April 4, 1990, p. A32
by Derek Ferguson

Consumer Minister Greg Sorbara {in the David Peterson, Ontario Liberal government,} is part-owner of two North York apartment buildings where 650 tenants face a proposed 52 per cent rent hike.

The Sorbara family is using a loophole in the province's rent review law to jack up rents at 5000 Jane St. and 4001 Steeles Ave. West in North York, New Democrat MPP Dave Cooke says.

Karen Davies, a tenant at 4001 Steeles, said the propsal will mean a rent increase of $301 on her $580-a-month, two bedroom apartment.

One company controlled by the Sorbara family owns the buildings. Another family firm owns the land they're on.

One Sorbara company is hitting the other family firm with astronomical increases in land rental charges, Cooke told the Legislature yesterday.

The landlord has applied to pass on to tenants the cost of those increases, along with the costs of long-overdue repairs, Cooke said.

Sorbara said he doesn't know about the proposed rent hikes because his financial interests are kept in a blind trust to comply with the province's conflict-of-interest law.

"As a matter of protocol I never discuss my family's business," Sorbara told reporters.

His brother Edward, who represents NHD Developments Limited, one of the two family companies involved, said Cooke is off base.

NHD constructed all the buildings on the properties, which is owned by the family's other company, Antica Investments Limited, he said.

Under the terms of that agreement, NHD holds a 99-year lease signed in 1970 that allows it to raise the rent to market value every 20 years.

"On that basis we have applied to rent review for an increase," he said.

The family firms aren't violating rent review legislation becuse the proposal is part of a lease agreement that was signed five years before rent review came into effect, Edward Sorbara said.

Liberal Housing Minister John Sweeney said his ministry is investigating Cooke's allegations.

If the company is trying to pass the land cost from one company to another and on to the tenants, the firm is breaking the law, Sweeney said.

"You can't do that," he said.

If that's the case, the rent review board has the power to demand a decrease rather than an increase, Sweeney said.

Cooke said the company is using the lease deal to pass on increased land costs rather than improvements to the building. "About half or a little better than half of the total increase applied for is a result of land," he said.

The land rental fees at 5000 Jane Street, at Steeles Avenue, are to increase to $720,225 a year from $82,744. The fees for 4001 Steeles Avenue West, at Weston Road, are to rise to $881,100 from $60,207 ayear, Cooke said.

They are going to be able to have that return on the land for the next 20 years," Cooke said.

He stopped short of calling for the consumer minister's resignation, but said Sorbara's development ties should be probed.

"I think we should be lookng at the relationship of the development industry in general and the Liberal party, and obviously one of the specifics would be Mr. Sorbara."

Davies, one of about a dozen tenants in the Steeles Ave. apartment building who was at the Legislature yesterday, told reporters the improvements being done do not justify the rent increase.

She also expressed concern that the consumer minister and his family business are involved.

It's certainly not a good perception to the average citizen," said Davies, an adjudicator with teh Ontario Labour Relations Board.

The government is prepared to amend the rent review law if its probe reveals a loophole, Sweeney said.

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