MORRISBURG, Ontario – An elected member of South Dundas council actively lobbied his fellow council members to support a project in which he is an investor, prompting The Leader to launch an investigation into the extent of that involvement.
Following the rules of the Ontario Municipal Act, Councillor Lloyd Wells declared conflict of interest during South Dundas council meetings regarding rezoning of a commercial property he owns next to the McIntosh Inn in Morrisburg.
However, after unsuccessful attempts at rezoning the property, South Dundas council members received a letter from a business-owner asking them to support either of the two proposals put forward by Lloyd Wells.
This implication that Wells’ involvement in the development proposals was as more than just as a landowner looking to sell property, caused The Leader to begin its three month-long investigation into Wells’ role in the development.
Documentation received in response to Municipal Freedom of Information and Protection of Privacy Act inquiries to the Municipality of South Dundas revealed that Wells did in fact reach out to members of council concerning the project after he had declared a pecuniary interest.
Follow-up interviews with members of council revealed further incidents of contact by Wells.
The project for which Wells is lobbying for support is a proposal by developer Stefano Ferrante for a 40 unit apartment building on County Road 2 in August, 2020.
That development requires a piece of commercial property located on the eastern end of Morrisburg to be rezoned residential.
The initial rezoning application was denied by council at a public meeting held on August 17th, 2020 at the Morrisburg Arena.
Now a second rezoning application attempt is set for a public meeting on May 10th.
Documentation received through the MFIPPA request details the communication instigated by Wells to Deputy Mayor Kirsten Gardner via email about the project.
An email dated January 24, 2021 began by Wells saying “To start with, I know I am not supposed to talk about this building with you but I have to tell you the upside to this project.”
He explained in the email that he was not only selling the property, adding: “But I’m a half owner of the purposed project.”
The two-page email details the benefits of the project in which Wells has invested.
When interviewed by The Leader about the situation, Gardner said she received the email but did not read it in its entirety until recently. “After which I contacted the Integrity Commissioner to discuss my responsibilities as the recipient of the email,” she said. “Given the fact that the outcome of any investigation was not clear and would be based solely on the one email, it was concluded that any legal cost and possible disruption was an unfair burden to the residents of South Dundas.”
Gardner said that after the first rezoning meeting held at the Morrisburg Arena, where the initial application for rezoning was turned down, she received additional pressure about the development by the developer Stefano Ferrante.
“I was approached by Mr. Ferrante and verbally attacked regarding my vote,” she said. “I was the only member of council to have had this type of interaction that evening.”
A reporter from The Leader who attended that meeting witnessed that verbal altercation in the west-end Arena parking lot.
Gardner was not the only member of council who was approached about the project.
Mayor Steven Byvelds said in an interview with The Leader that Wells texted him after the end of the first rezoning meeting.
“He berated myself and council on our decision,” said Byvelds. “I did send him an email, cc’ed to all of council informing him that he should not reach out to us because of his conflict. I also told him that if he did have an opportunity to ask me about my thinking on the project, I would have told him no then.”
Byvelds said that the developer also contacted him personally about the development, about two weeks after the first rezoning decision.
“[Ferrante] was told that he could appeal but he was also lobbying to bring a changed scope to the project and he wanted me to approve of it,” he said. “I told him he was welcome to bring another application to council. He did do a preliminary one, which the majority of council rejected again. I did tell him that he could still go ahead and reapply, which they have done now for May 10th.”
Byvelds said that he did not learn of Wells’ larger role in the development as an investor until after the first rezoning meeting.
Councillor Donald Lewis said that he received an email on August 18th, 2020 where Councillor
Wells expressed concerns about why council did not approve the rezoning. (A copy of this email was not returned with The Leader’s MFIPPA inquiries.)
Lewis said that four-to-five weeks after the first rezoning meeting, he received a phone call from Ferrante (developer).
“He asked me what I thought if he put a commercial zone on the bottom floor and three levels of apartments above that,” Lewis said. “I told him that I am one vote, and I wasn’t going to make a decision on the phone. I didn’t support the first application and I probably wouldn’t support the second.”
Lewis said that outside of the property sale, he did not know of any other interest Wells had in the development.
Despite these interactions, Lewis said that at no point had he felt pressured to support the development or the rezoning.
“The night the rezoning came up at the Morrisburg Arena I stated very clearly that I did not feel comfortable with residential mixed with commercial. That is why I made the decision I made. I just don’t feel that commercial and residential belong together.”
Councillor Archie Mellan, the only member of council to support the first two rezoning applications, said that he has not been lobbied by either Councillor Wells or the developer.
He said was not aware of any details of the pecuniary interest involving Wells outside of the land sale. “Nope. It wasn’t my business so it wasn’t relevant to what we were dealing with,” Mellan said. “I didn’t know what arrangement he had, if he was selling it outright, or what the deal was. It wasn’t my business.”
Only Gardner confirmed reaching out to the Integrity Commissioner Tony Fleming about Wells’ actions.
When asked if there are any active complaints with the commissioner, Fleming said “I am precluded from confirming or denying whether there are any active complaints with our office.”
Declaring a pecuniary interest is a requirement under the Municipal Conflict of Interest Act. A pecuniary interest can be direct, such as having a financial interest or a benefit in the outcome of a municipal matter. It can also be indirect, meaning a financial interest or benefit to a family member or close friend. It applies to both elected municipal officials and any employee of a municipality.
Michael Polowin, a partner at the law firm Gowling WLG, a municipal law expert, and co-author of The Manual for Elected Municipal Officials – Ontario, explained that a municipal official does not have to explain what their pecuniary interest is in a matter.
“You don’t have to say what your conflict is, so long as you declare that there is a conflict,” Polowin said.
He explained that any kind of an agreement or contract, written or verbal, is subject to a pecuniary interest declaration.
Asked whether a municipal official who has declared a pecuniary interest should be lobbying members of council, Polowin was adamant: “No,” he stated. “How is that different than speaking on the floor of council? Even if you don’t vote – the remarks that councillors will make on the floor of council or in a committee hearing are intended to influence the votes of others. So if you can’t do one, why should you be able to do the other?”
Polowin explained the conflict of interest rules are in place because, “Public servants are there to serve the interests of the public, not themselves. That’s why these rules are there.”
Commenting on the Ferrante/Wells development with respect to the potential of involving Integrity Commissioner, Polowin said: “If the public in South Dundas care about this, someone should make a complaint.”
He added that: “The Integrity Commissioner is not there to attend to the intramural disputes of council. It is there to attend to the concerns of the public.”
When interviewed by this newspaper, Wells said that he knew that he had to declare a pecuniary interest at council when the first rezoning application occurred because he had received training, along with other elected members of council, at the start of the current term of office in December 2018.
Up until the denial of the first rezoning application, Wells said he was only the seller of the property that Ferrante was going to develop.
However, the relationship changed after that meeting.
Wells then became an investor in the project, and added that the development project is worth “about $3,000,000”.
“I reached out to one councillor and I just voiced my opinion that I was an investor,” Wells said. “Should I have done that, no. But I did it.”
He said that his email to Gardner was to give his view on what was going to go into the development.
“At the end of the day, in that email, I said it was good for the community,” Wells said, adding he did not ask for her to support the development. “I have a lot of money invested and I wanted to just explain the different aspects of the new building.”
Wells said he did not recall other contact with members of council but did not deny that it happened.
“I probably did,” he said.
Asked if he believes he has followed the municipal code of conduct and adhered to the Municipal Conflict of Interest Act, Wells answered: “One-hundred per cent.”
He added: “I probably shouldn’t have talked, shouldn’t have sent that email, even though I know I was just giving some FYI to a councillor.”
Upon reflection Wells explained: “It was just a spur of the moment sitting there that I have this investment. It’s for the community. So at that point I shouldn’t have sent the email but everything else I’ve done, I figured, is on the up-and-up.”
He characterized balancing the role of being an elected official with being a business owner in the same community as “difficult.”
“It’s hard doing business when you’re a councillor, deputy mayor, or mayor,” Wells said. “It’s hard when someone is making business decisions with something one of their colleagues have. Like I’m trying to invest in the community, low-income dwellings, because there’s nothing here for people as far as rentals.”
This is not the first time Wells has had to balance the two roles.
His company built the new Iroquois Campground building in 2019-20. During that bidding process he also declared a pecuniary interest.
“People have to realize, council has to realize, that just because you’re a councillor and you’re trying to help your community, you also gotta live. That’s my living — construction.”
He explained that it is the same with the Morrisburg development.
Wells clarified his role as contractor for the development during his interview with The Leader saying that he is not going to be the contractor, should the project be approved.
His son’s contracting company may work on the project, but that company will not be the main contractor.
“Not only is it bringing rentals, we’re planning on a laundromat, there is storage, a little convenience store, plus you have room for an extra 60 residents,” Wells said, adding there will be more economic spin-offs.
“Maybe they’ll go to the McIntosh for supper or go over and buy gas, or go to Tim Hortons, like it’s a win-win situation.”
Wells already owns four businesses in South Dundas and said that he is investing a lot of money into this development.
“This building, and all my other stuff I do is my retirement,” said Wells. “This will be my last major construction project and investment.”
He added: “In general, this is something our community needs. As a councillor I heard it, all the councillors heard it, the whole time when we were campaigning, we need some affordable housing. And that’s what we’re trying to offer.”
On the development applications, Wells said that after the first rezoning application was denied, he and the developer addressed the concerns that were raised by council.
“This is not the first time this type of rezoning has been done,” he said, citing the pre-amalgamation example of commercial land being rezoned to build the Morris Glen Court beside PetValu in Morrisburg.
“I believe we’ve done our due diligence,” Wells said of the latest application for rezoning, which will be before council on May 10th. “Hopefully the municipal planners will see [the project] is a good thing.”
“Even if I didn’t own the property or wasn’t an investor, it’s still a win-win situation,” he said.
Wells said that if the May 10th rezoning application does not get approved the decision could be appealed to the Local Planning Appeal Tribunal.
“I can’t speak for Stefano on this, but as me, I would have the right to do that,” Wells said. “Then it is totally out of the council’s hands when it comes to that point.”
While the $3,000,000 project may hinge on the rezoning, Wells said that if it does not go through, he will put in a commercial plaza on the property.
“At the end of the day, something will be built there.”
This article was originally written for and appeared in The Morrisburg Leader.