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Castle under siege?: Casa Loma management under scrutiny

August 2nd, 2010 · No Comments

By Jennifer Farncomb

Is it time for new management at Casa Loma?

Recent events have called into question the management and finances of the castle, which some say are lacking in transparency and the ability follow through on agreements made with the city in 2008.

“Now what staff is identifying is that we have a problem—and it’s a big problem and we need it resolved,” said Councillor Joe Mihevc (Ward 21, St. Paul’s) who sits on the Casa Loma Board of Trustees ex officio. “We need to focus the city’s attention on it and we need to focus Kiwanis’ attention on it.”

On July 7, city council voted in favour of adopting recommendations about the management and operations of Casa Loma made by the city manager: that the castle’s board of trustees meet monthly; that Kiwanis develop a revised financial plan; that a joint working group be established, and that the chair be removed by the end of July. The chair of the Board of Trustees of Casa Loma, Richard Wozenilek, is facing allegations of a conflict of interest. His law firm performed $111,000 worth of legal services for Casa Loma.

Kiwanis Club of Casa Loma (KCCL) president Joachim Gerschkow agreed to the first three recommendations but said they were unwilling to oust Wozenilek. Failure to comply with the city could result in eviction for KCCL.

Representatives for KCCL declined to comment on the matter, but did send the Gleaner a written response to the city report. The response defends the KCCL against the allegations in the report. “The Kiwanis Club has remained in compliance with the financial requirements of the Management Agreement,” it reads.

Trelawny Howell, the great grand niece of Sir Henry Pellatt (the builder of Casa Loma) has always been skeptical about the way the castle was run. “We were suspicious of whitewashing the financial papers,” said Howell. “The Kiwanis club had one set of financial papers, and Casa Loma had another set, and between the two, they were never properly audited.”

In 2007, KCCL faced the possibility that their lease with the city would not be renewed, so they proposed a plan for improvements with timelines and dollar amounts for the next five years, called the Strategic Vision.

In 2008, council decided to renew their lease under the Management Agreement, which included implementing the Strategic Vision. A joint board was established made up of half Kiwanis delegates, half city appointees, ex officio members and a Kiwanian chair.

To assist with the costs of the Strategic Vision, the city exempted Casa Loma from property taxes ($175,000) and capped annual payments. The proceeds from the financial break were to be placed in the Casa Loma Improvement Fund (CLIF).

“So the Kiwanis sold city council on the new vision and the problem is that, two years have passed, they haven’t delivered,” said Rita Davies, Toronto’s director for cultural services who sits on the Casa Loma board.

According to the city report, the KCCL have been using the CLIF to supplement shortfalls in operating revenue and only $335,000 of the projected 1.5 million dollars will be available for improvements by the end of 2011. They are also behind schedule in implementing the Strategic Vision.

Governance concerns were also raised in the city report. “Certainly, at this point there is a feeling from the staff report that Kiwanis has not fulfilled its obligations as the representatives of half the board,” said Mihevic.

In response to the city report, the KCCL did provide some reasons for their financial difficulties. For example, they have not received a partial property tax refund for 2008, which meant they had to adjust their cash flow planning. In addition, Casa Loma did not receive any aid during the recession like many publicly-owned attractions.

Mihevc does not believe that the city has reached the stage where they will begin looking for a new operator, yet, but said, “Kiwanis do great work in the area of arts and culture especially with their music festival. They are not, though, in the business of running large tourist attractions like Casa Loma.”

Links to city reports regarding Casa Loma from 2005 to 2010 can be accessed here.

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