Businessman Lee Lalli made a 900 per cent profit when he sold the site of the future housing project to Magi in January 2005.
Lalli, who organized fundraisers for Montreal Mayor Michael Apple-baum while he was mayor of the west-end borough and a member of Union Montreal, as well as for former city councillor Marcel Tremblay, paid $350,000 for an industrial site at 5757 Upper Lachine through a numbered company in 1999, real estate records show.
Five years later, Lalli's company sold the property for $3.2 million to Magi's Construction F.T.M. Inc. Magi's brother, Ricardo Magi, represented the company in the transaction.
A month later, the city's housing department granted Construction F.T.M.'s project for the site almost that exact value in subsidies - $3.14 million.
As The Gazette reported on Friday, documents obtained by the newspaper contradict statements by Applebaum, who was borough mayor from 2002 until November, that elected officials in the borough were not involved in the controversial housing project and that the project was presented to the borough by the city's housing department as a fait accompli.
Lalli contradicted Applebaum's claim that no elected officials in the borough were involved in the project's approval. Lalli told The Gazette on Friday that it was Applebaum who suggested he cede the property to allow a housing project.
Lalli said his construction company, which operated machinery at 5757 Upper Lachine at the time, generated noise complaints from residents.
"I was asked by the mayor if I would consider moving and they would do a housing project because neighbours didn't like what I was doing there," Lalli said. "And I tried to comply."
The documents obtained by The Gazette show Construction F.T.M. asked the borough for a zoning change for its housing project and requested subsidies from the city's housing department before September 2004, while Lalli's company still owned the site.
Later in the interview, Lalli backtracked about who had suggested he cede the land for the housing development. Lalli then said he couldn't remember if it was Apple-baum, Marcel Tremblay, who was a Côte-des-Neiges-Notre-Dame-de-Grâce councillor for the district that includes Upper Lachine at the time, or someone else.
"It could have been either Michael Applebaum, it could have been (Marcel) Tremblay, it could have been anybody, but I knew that people were complaining to the city."
The documents obtained by The Gazette this week show Marcel Tremblay, the brother of former mayor Gérald Tremblay, met with an official from the electrical commission in April 2004 to inquire whether the city, Hydro-Québec and the provincial government would cover the cost of burying electrical lines along Upper Lachine between Clifton and Girouard Aves. He also asked about the procedure for burying lines.
It's "extremely rare" for a politician to approach the commission alone without a civil servant, commission chairman Serge Boileau said. The commission usually deals directly with civil servants.
The commission responded with the information in writing in May. The borough did not pursue a plan to bury electrical lines on Upper Lachine.
Applebaum's spokesman, Jonathan Abecassis, said Thursday the mayor was not aware Marcel Tremblay had contacted the commission.
Applebaum acknowledged through a spokesperson that he agreed with the residents that Lal-li's business should go, but denied he suggested a housing project.
"He never told Lee (Lalli) to build housing there," Abecassis said.
And while Construction F.T.M. paid Lalli's company $3.2 million for the property in 2005, real estate records show Construction F.T.M. sold the property during the construction phase to a numbered company, 9119-3557 Quebec Inc., operating under the name Habitation Vally, for $1.56 million in November 2006.
Lalli said he had "no idea" why he was able to sell the property for $3.2 million after buying it for $350,000. "Why does land go up everywhere?" he asked, adding that he spent over $1 million in renovations on the building at 5757 Upper Lachine that has now been demolished.
Lalli, who worked on Marcel Tremblay's 2001 election campaign, organized a $1,000-a-head fundraiser for Applebaum and Tremblay in August 2003 at La Cantina restaurant on St-Laurent Blvd. He told The Gazette he organized a second fundraiser for Applebaum's 2009 re-election campaign at La Cantina.
Lalli said he relocated the 2009 event when the restaurant's owner, Federico Del Peschio, was shot and killed in the parking lot behind the restaurant less than a week before the fundraiser.
Lalli said he moved the event to a boardroom in his office building on St-Jacques St. W.
Applebaum's ties to Lalli made headlines in March over a Radio-Canada report that Lalli profited from rezoning by the borough of a site he owned and then sold at Côte St-Luc Rd. and Décarie Blvd.
Lalli, who has insisted he has no ties to the Mafia, acknowledged he met with Mafia boss Vito Rizzuto in 2003 at La Cantina restaurant to discuss the Décarie Blvd. land deal. Rizzuto called the meeting to try to persuade Lalli to partner with Antonio Magi on the deal, Lalli said.
Lalli said Magi had also been interested in buying the site and had made an offer on it before Lalli.
Rizzuto accepted his refusal to let Magi in on the deal, Lalli said.
Six years later, Lalli was savagely beaten by two thugs.
At a city council meeting Friday, Applebaum maintained his position that the project was presented to the borough as fait accompli. But he acknowledged for the first time the borough intervened with the housing department to help secure subsidies for the project. "We had a say for allowing affordable housing. ... This is why this dossier was accepted so we could have affordable housing," Applebaum said.
The documents obtained by The Gazette show the director of the borough's urban planning department, Diane Martin, wrote to the civil servant in charge of subsidies at the city's housing department in December 2004 to say her department "welcomes the project," promising to initiate procedures to change the zoning "immediately."
A month later, Lalli's company sold the property to Construction F.T.M. A month after that, in February 2005, the civil servant in charge of subsidies in the housing department wrote to Construction F.T.M. confirming the subsidies.
The documents also show the borough's manager pressured the city's electrical commission to change its recommendation to bury the project's new power lines - a move that saved Construction F.T.M. about $1 million by allowing the company to install aerial lines instead.
Despite an access-to-information request filed by The Gazette and repeated follow-up requests for information about the project, the borough withheld documents showing exchanges between the borough officials and the electrical commission.
The housing project made headlines in December 2009, when Nick Rizzuto Jr., the son of reputed Mafia boss Vito Rizzuto, was gunned down outside the complex. Rizzuto had been seen frequently at the Upper Lachine building for three years and was said to be developing two housing projects with Magi.
René Bruemmer of The Gazette contributed to this report
Timeline of a borough's behind-the-scenes manoeuvring: A chronology of events detailing how the Côte-des-Neiges–Notre-Dame-de-Grâce borough intervened to get a developer exemptions in a housing project on Upper Lachine Rd.
April 16, 2004
Marcel Tremblay, a councillor in Côte-des-Neiges–Notre Dame-de-Grâce borough, meets with the Commission des Services Électriques de Montréal (CSEM) and asks about the procedure for boroughs to bury electrical lines and cables in Montreal. He asks about burying the lines along a six-block stretch of Upper Lachine Rd., between Clifton and Girouard Aves. He also inquires about different public subsidies available for the province and Hydro-Québec to pay for the work.
Sept. 1, 2004
Letter from the project architect to Olivier Charbonneau, in charge of subsidies in the city's housing department, advising him that Construction F.T.M. Inc. has submitted a rezoning request to the borough and offering to send new plans for the project according to the new zoning after the request is treated.
Dec. 6, 2004
The borough's urban planning director, Diane Martin, writes a memo to Olivier Charbonneau, in charge of subsidies at the city's housing department, to say the borough has studied the request for a zoning change for the project at 5757 Upper Lachine that was made by Ricardo Magi of Construction F.T.M.
"After studying the file, we wish to inform you that the (urban planning department of the borough) welcomes the project," she wrote. "So we will immediately initiate procedures to change the zoning after the documents required for the request are deposited."
Among the recipients copied on the memo: Ricardo Magi, Michael Applebaum, Marcel Tremblay, borough manager Gaëtan Rainville, Robert Rousseau, borough permits division official who in 2013 committed suicide after being interviewed by Quebec's anti-corruption squad, UPAC.
Jan. 24, 2005
Construction F.T.M. Inc. buys the site of 5757 Upper Lachine Rd. from a number company belonging to businessman Lee Lalli, a fundraiser for Applebaum and Marcel Tremblay and their Union Montreal party. Price: $3.2 million.
Feb. 24, 2005
Letter from person in charge of subsidies in the city's social housing division to Construction F.T.M. Inc. saying the city approves financial subsidy for the project under the municipal-provincial Programme logement abordable Québec.
May 2, 2005
Agreement reached between the C.D.N.-N.D.G. borough and Construction F.T.M. for the extension of Wilson Ave. for the project. The agreement says the costs are estimated at $967,000 and city will pay subsidy to Construction F.T.M. to cover 30 per cent ($290,100) of the cost.
June 23, 2005
Robert Rousseau, permits and inspections division chief for borough, approves a demolition permit for 5757 Upper Lachine Rd. Rousseau committed suicide in March 2013 after being interviewed by the province's anti-corruption squad, UPAC.
March 10, 2006
Letter from CSEM official to Gilbert Deschamps, director of public works in C.D.N.-N.D.G. borough (copied to Daniel Lafond, borough urban planning division chief, Mario Patricio Celi, public works engineer in the borough, Alain Isabelle, counsellor with Hydro-Québec, Serge Boileau, chairman of CSEM, Alain Richard, projects manager with CSEM). Subject heading: Jardin Upper Lachine. Letter refers to meeting of all those copied on letter with Deschamps on Feb. 28, 2006. Evaluation of costs for burying electrical lines for the housing project. Letter says CSEM counts on borough to notify the developer and a meeting with the developer should be held shortly. Estimate to bury the lines: $963,959.
March 30, 2006
Letter from borough manager Gaëtan Rainville to CSEM chairman Serge Boileau (copied to borough mayor Michael Applebaum, councillor Marcel Tremblay, Gilbert Deschamps, director of public works for the borough, Daniel Lafond, interim urban planning director for the borough, Robert Rousseau, interim division chief for permits and inspections in the borough, two Hydro-Québec officials and CSEM official).
Letter says the borough's reps and developer Ricardo Magi signed an agreement on April 25, 2005, on infrastructure work for extension of Wilson Ave. north of Upper Lachine. Letter says housing department issued a construction permit for 15 buildings on Harvard and Melrose Sts. (60 new housing units). Given that the construction is underway and moving quickly, it would be important to answer the borough's request to install above-ground electrical wires in the sector of Wilson Ave., Rainville writes.
"We remind you that the Commission does not have the power to impose burial of a network whenever a zoning bylaw does not call for it." Rainville also writes that the borough's zoning bylaw doesn't require burial of lines in this sector.
Consequently, he writes, the borough supports the presence of an aerial public utility in the sector bounded by Harvard, Wilson and Melrose north of Upper Lachine. "It is crucial that this project not suffer an additional delay since the units under construction are to be delivered for July 2006 and this contribution of new affordable housing units is a priority in the sector."
April 5, 2006
Letter from CSEM president Serge Boileau to Rainville acknowledging receipt of Rainville's March 30 letter (copied same as above, Applebaum, Tremblay, Rousseau, Lafond, etc.). Letter says the CSEM objected to above-ground line because of the density of the project and its configuration, which don't allow an above-ground feed in the back lot, an aerial feed would require the construction of poles every 15 to 20 metres when the norm is in fact 30 metres, the quantity of electrical wires in front of the buildings at a height of three storeys would hamper the fire department's ability to respond in case of fire and because the orientations of the city are to have all new residential developments fed by underground networks.
"The borough can, despite the reasons cited by the CSEM, override the (CSEM's) decision with a resolution of the council that would confirm its choice as is customary when it does regulatory changes. The CSEM will ask Hydro-Québec in that case to respect the borough's wishes."
Finally, a warning ... the letter says be advised that if you ever want to bury the network underground at a later date, the borough will have to assume the cost, both for burial and dismantling the above-ground network.
May 1, 2006
Borough resolution tabled by Marcel Tremblay, seconded by Francine Senécal, to inform the Commission that the borough supports installation of above-ground network for the project.
Oct. 4, 2006
City social housing division writes to project architect and says "following an intervention by the borough" and a check, the architect must change the facade on Upper Lachine for two of the new addresses because they're only 3.5 per cent when the regulations call for 10 per cent for facades opening on a street.
Nov. 23, 2006
Construction F.T.M. Inc. sells property to 9119-3557 Quebec Inc. (Habitation Vally). Sale is for $1.565 million. City replaces name of construction subsidy recipient from Construction F.T.M. to 9119-3557 Quebec Inc.
Dec. 28, 2009
Nick Rizzuto Jr., son of Mafia boss Vito Rizzuto, is gunned down on Upper Lachine Rd. near the housing project. Rizzuto was developing two housing projects with Magi at the time. Rizzuto Jr. had been seen frequently at the Upper Lachine building for three years.
March 10, 2011
Letter from Les Excavations Super Inc., which won a private call for tenders (#9113P) to build sewers and other infrastructure for the project demanding payment of $80,200 as part of city's $200,000 subsidy to Construction F.T.M. to build the infrastructure, otherwise Excavations Super will start legal action. Work was completed in November 2007, it says. Two-year warranty period is over.