A vital shelter for homeless families in Toronto’s east end may be forced to close due to a ugly legal battle over commercial real estate investments involving Toronto diet doctor Stanley Bernstein and his wealthy Bridle Path-area neighbours Norma and Ronauld Walton.
The Red Door Family Shelter is one of 31 properties Bernstein co-owned with the Waltons, co-founders of asset management company Rose and Thistle Group.
A court order last November placed the properties into receivership after an investigation found that about $2.4 million in mortgage proceeds was diverted from the business partners’ joint investments, including $268,000 that was used to pay for renovations on the Waltons’ home.
Norma Walton admits she shouldn’t have diverted the funds without Bernstein’s knowledge, Justice Frank Newbould says in his Nov. 1 endorsement of the receivership.
“What happened here, not to put too fine a point on it, was theft,” he adds.
There is no evidence Bernstein was aware of what was happening, and his lawyer, Peter Griffen, said he is unable to comment because of ongoing litigation in the case.
The Waltons are appealing the decision. But in the meantime, the receiver is proceeding with the court-ordered sale of the properties, including the 106-bed shelter, which is located in the former Woodgreen United Church on Queen St. E., near Logan Ave.
“The Red Door has been providing shelter beds for vulnerable families at this location for over 30 years,” said the shelter’s executive director, Bernnitta Hawkins.
“We are an integral part of the South Riverdale community. We do not want to leave and we certainly do not want to reduce the number of beds we offer homeless families in need,” she said.
The shelter is holding a public meeting Tuesday evening to rally support to save the well-loved community service.
What is particularly troubling for Hawkins is that Red Door helped the Waltons buy the property at a bargain-basement price from the United Church of Canada, believing the Waltons’ promise to build a new shelter on the site as part of a larger condo project.
For her part, Norma Walton says she is “heartbroken” that the shelter has been put at risk as a result of her legal troubles with Bernstein.
“The moment the litigation began, we said to Dr. Bernstein and we said to (the receiver) and we said to the court: You have to protect the shelter because we would not own the Queen St. property without the shelter,” Walton said Monday.
“All three of them said … ‘We do not care what you say, we will make our decisions based on the facts as we find them on the ground and we’re not going to promise you anything,’” she said.
In his Jan. 16 report to the court, Receiver Harlan Schonfeld of Schonfeld Associates Inc. said he is “sympathetic to Red Door’s situation” and has required prospective purchasers of the site to agree to extend its lease from June this year to March 31, 2015.
But in an email, Schonfeld said his role as receiver doesn’t permit him to comment publicly about what efforts, if any, he is making to ensure Red Door can remain on the site indefinitely.
Prospective purchaser Chris Harhay, of Harhay Develoments, said his company has not yet examined the site and could not comment on whether he would be prepared to include Red Door in any future development there.
Olay Omodara, 39, who lived at the shelter with her young son for six months in 2011 after fleeing a violent spouse in Nigeria, tears up at the thought Red Door might close.
“When I came to Canada I had no one. But the Red Door Shelter took me in. They are my family, like my mother to me,” she said. “They made me believe that anything I could dream, I could achieve.”
Thanks to the shelter, Omodara and her son Isaiah, 5, are now living in their own apartment and she is about to complete a college degree in business accounting.
“I would not be here today without them. It pains me, like a death in the family, the death of my mother, to think Red Door might not be here on Queen St. to help others,” she said.
In 2010, the United Church of Canada agreed to sell the property to Red Door for $4.25 million. The shelter made a deposit of $50,000, but couldn’t secure government funding to close the deal.
In June 2011, Red Door entered into an agreement with the Waltons to assign its purchase agreement with the church to them, with the understanding that the Waltons would build them a $6 million shelter as part of a new condominium development on the site.
Under the agreement, proceeds from the sale of condos and Queen St. retail space would offset the cost of building the shelter. Red Door would have 10 years to pay the Waltons the remaining $4.2 million mortgage the shelter had originally negotiated with the church.
In October that year, award-winning architects Hariri Pontarini drafted plans for an attractive six-storey building with retail space and condos along Queen St. E., with a four-storey shelter facing onto a back laneway.
The sale closed in July 2012. By early 2013, however, the Waltons had negotiated with Red Door to move the shelter to a former Salvation Army home for teen mothers on Pape Ave., which they also owned. It meant Red Door could stay put on Queen St. while its new facilities were built and would only have to move once.
“We were happy to move there,” Red Door’s Hawkins acknowledged. “But now we realize that’s not possible, either.” That site is also caught up in Bernstein’s legal dispute with the Waltons and subject to the receivership.
Last October, Walton said she hired a real estate broker to sell Red Door’s Queen St. property to finance construction of the new shelter on Pape Ave., which was “within two months of obtaining a building permit.”
That was before the November receivership order that now threatens the shelter’s future.
“It certainly seems (Norma Walton’s) financial dealings were built on a house of cards,” said area Councillor Paula Fletcher (Ward 30, Toronto-Danforth). “And now the only one without a house is the Red Door.”
Fletcher, who never supported the shelter’s move to Pape Ave., is determined to ensure Red Door remains at its current site.
The South Riverdale Community Health Centre is two blocks away, children have access to a city park and free recreation right across the street at the Jimmy Simpson Community Centre, the Ralph Thornton Centre and local library are nearby and the local public school has been working with children from the shelter for years, Fletcher said.
“The shelter is already perfectly located on Queen St., where it is well supported by local businesses and area residents,” she said. “The families have everything they need right at their doorstep. We simply can’t afford to lose this valuable community service.”
Original article here.