Tenants fight ex-landlord for complex
Judge to decide who should own infamous towers in Parkdale
Toronto Star - May 25, 1997
Just when 2,000 tenants thought they were going to take over their rundown Parkdale apartment complex, their old landlord is back to try to regain ownership.
And that has many worrying about the return of cockroaches, crime and other troubles.
But whether landlord Phil Wynn and his sons Paul and Jeffrey return is up to a court to decide this week.
On Tuesday, a judge will be asked to consider who should own the infamous West Lodge Towers: the tenants or the Wynns, who have already walked away from the buildings once.
And while a court-appointed receiver is recommending the Wynns, the City of Toronto is backing the tenants - because city officials remember the time and money they have spent trying to clean up the Wynns' act.
"If the tenants win, it will send a very clear message to landlords who don't maintain their buildings," says area Councillor Chris Korwin-Kuczynski. "The whole city is watching this case."
The two 19-storey apartment buildings at 103 and 105 West Lodge Ave., in the Queen St. W.-Lansdowne Ave. area, opened in the early 1960s as upscale city living for young professionals.
Tenants offering $12 million for complex
But tough economic times, a series of unsuccessful landlords, tenant rent strikes, fires, power failures and crime have run the 720-unit complex into the ground.
Now, almost two years after the city persuaded a judge to put the buildings into receivership, the court will be asked to decide between the two prospective offers.
The Wynns, who owned the twin towers until 1979 and who still hold a second mortgage on the property, are offering $20 million.
And the tenants, who have formed a non-profit co-op with mortgage guarantees from the federal Canada Housing and Mortgage Corp. and the city, are offering $12 million.
Not surprisingly, the court-appointed receiver, John Bassel of The Regional Group (Toronto) Inc. is recommending the court accept the Wynns' offer because it represents more money for the creditors, which include the city and several numbered companies.
But the tenants and the city argue that private landlords - and the Wynns in particular - have had such a bad track record at West Lodge that it's time to give the tenants a chance.
"This is a classic David and Goliath tale," says Mark Goldblatt, a development consultant hired by the co-op. "This is a tenants' association dealing with a large-scale landlord with tons of money."
Goldblatt concedes that the tenants' legal position is shaky.
"We're definitely out there in the gray area of the law," he says. "But we're hoping that the judge realizes that he has a duty to ensure that the buildings go not only to the highest bidder but to the buyer with the best chance of running them properly."
Paul Wynn, who along with his brother Jeffrey will be in court to defend the family's position, agrees that West Lodge has had a terrible past.
"On most points, I'm in total agreement with the tenants about the state of the apartments," he says. "But we have been out of the buildings since the late 1970s."
The Wynns say they have been advised by their lawyers not to speak in detail about the case before the hearing.
But in court affidavits, they argue that the city and the tenants have maliciously maligned them to gain control of the buildings.
Seven other buildings the family manages in Parkdale are in "excellent" condition and have no outstanding city work orders, Jeffrey Wynn says in an affidavit.
And the family's remaining 11 apartment complexes in the Greater Toronto Area are run with little or no complaint, he adds.
Problems at the towers go back almost 30 years according to court documents, the Wynns have offered $7 million in cash and a $13 million vendor-take-back mortgage guaranteed by the family. And the receiver has accepted the Wynns' rehabilitation and management plan for the buildings as set out in the court-ordered condition of sale.
But since the Wynns own the second and third mortgages on the property, they will be basically paying themselves. The only money they'll likely have to fork out to someone else is about $5.7 million in unpaid city taxes and just over $1 million to the first mortgage holder, a numbered company.
Meanwhile, the tenants' offer is straight cash guaranteed by CMHC and the city. Their rehabilitation plan calls for twice the amount of work the Wynns say they are prepared to do, according to court documents. And they say the work they propose to do more closely meets the repairs that were ordered by the court as a condition of sale.
"I know the Wynns have the upper hand," says Korwin-Kuczynski. "But over the years the city has spent thousands of hours of taxpayers' time enforcing building, fire and health regulations at these buildings."
"If the judge gives the buildings back to the Wynns, we'll be right back to square one," he says.
Problems at the semi-circular towers go back almost 30 years.
Over the past 10 years, tenants pleaded with the city for help with broken elevators, faulty fire alarms, inadequate heat, power failures, crumbling balconies and the lack of security.
The city responded by repairing the heating system, paying overdue gas and hydro bills, posting a 24-hour fire watch and hiring security guards to deal with guns, drugs and prostitution in and around the buildings.
And the costs were tacked on to the complex's already overdue property taxes.
City officials also issued more than 600 work orders to try to ensure adequate fire protection, safe balconies and proper repairs.
But as the city bills and court orders mounted, the buildings' last official landlord, Zaidan Realty Corp., sank deeper into debt.
Finally, in June, 1994, in a fit of pique, Zaidan mailed former mayor June Rowlands the keys to West Lodge Towers and abandoned the buildings.
As the second mortgage holder, the Wynns stepped in to protect their investment.
But under the Wynns, conditions in the buildings went from bad to worse, says Anna Thaker, head of the West Lodge Tenants' Association.
"It was horrible. The place was literally falling down around us," she says. "The elevators didn't work, the hallways weren't properly lit and there was filth and garbage everywhere."
During that year, city officials spent 10,000 hours dealing with building and fire code infractions and health and safety issues, according to an affidavit filed by Toronto building inspector Curtis Sealock.
"In the spring of 1995 we finally got sick and tired of running after (the Wynns),"' says city solicitor Sylvia Watson.
The city applied to the court with a list of hundreds of outstanding work orders and began threatening to take over the buildings for unpaid taxes.
In frustration, the Wynns threw up their hands and walked away, too.
Within days, the city had obtained a court-ordered receiver to manage the buildings and prepare them for sale.
And back at city hall, the politicians began helping the tenants buy the buildings by providing an unprecedented $3.5 million second mortgage guarantee.
Arwen Greenwood, 34, who has lived in the complex since 1993 with her husband and two sons, says the difference since the receiver took control in 1995 has been remarkable.
About $3 million in repairs have been done, financed through tenants' rent.
"The symphony of mice and cockroaches at night has ended," Greenwood says. "The hallways are lit and people aren't afraid any more."
The largely immigrant community, estimated at 2,000 with one-third of them children, may not be sophisticated, she says, but it's a community.
But in an affidavit, Jeffrey Wynn says his family was set up by the city as a "convenient scapegoat"' for 18 years of neglect by the city and other landlords.
He notes that there were more than 650 city work orders against the property in 1991, long before his family came back on the scene.
During the year they ran the buildings, the Wynns did the best job they could considering they weren't the owner but just a mortgagee in possession, he adds.
We were "not entitled to manage the property as if (we were) the owner in terms of making capital expenditures," he says.
His family's plan is to buy the buildings, do the necessary repairs and continue to run them as a business, he says.
But the tenants say they don't trust the Wynns.
And even the receiver who supports the Wynns' purchase offer admits to "some reservations" about the family's commitment to fix the buildings properly.
"That's why I have asked the court to give any interested party the power to enforce the Wynns' rehabilitation plan when we no longer control the buildings," John Bassel says.
Visit the West Lodge Tenants Association, Parkdale Toronto web site to find out about the condition in the buildings now.