MONTREAL, April 28 /CNW Telbec/ - Yesterday evening, Montréal's General
Auditor, Michel Doyon, submitted to the City Council his report on
dispositions of real property by the Société d'habitation et de développement
de Montréal (SHDM) from January 1, 2007 to November 24, 2008. This report,
which summarizes the results of the audit requested by the City Council on
November 24, reveals a disorganized environment conducive to lack of
"We reviewed project management at the SHDM and 20 real-estate
transactions. As guardian of transparency, it is my duty to issue an informed
opinion and to censure any kind of inefficiency in the management of city
resources. Based on the inspections we performed and the interviews we
conducted, we concluded that there were far too many administrative
shortcomings and irregularities in the management of SHDM's real-estate
transactions during the period studied. We observed a series of disturbing
events that raise doubts and questions," said Mr. Doyon.
In this 55-page document, the General Auditor recommends that the SHDM
turn the matter over to the police and asks the City Council to lend its full
support to the SHDM, its management team and its Board of Directors in this
procedure. These recommendations are based on the work of the Bureau du
vérificateur général and on those of Samson Bélair/Deloitte & Touche, which
was retained by the SHDM to review the Contrecoeur situation.
The Auditor observed numerous administrative deficiencies within the
SHDM. They included inadequate oversight of the eligibility process for
developers under the Accès Condos program (criteria and assessment process),
tolerance of non-compliance by developers with certain clauses in their
development agreements (particularly with respect to bank letters of credit
and mortgage guarantees) and incomplete management reports that did not permit
comparisons of progress of work with timelines, total costs with budget
allowances or actual sales with targets.
The Auditor also noted that the 20 real-estate transactions occurred in
the course of a redeployment of SHDM activities, as stated in its business
plan, but found that some transaction lacked the necessary approvals.
- The SHDM was not empowered to sell the Prince Arthur and Montcalm
buildings without the Montréal Executive Committee's prior
- The SHDM granted a temporary loan to a cooperative and guaranteed loans
to three other organizations, without the city having authorized it to
- Neither the SHDM's Board of Directors nor the Montréal Executive
Committee authorized the sale of 730-780, avenue Brewster.
- The Montréal Executive Committee did not authorize the sale of the
- The SHDM's Board of Directors did not authorize a $450,000 loan to the
buyer of a building.
In the case of the Faubourg Contrecoeur project (municipal component),
several important pieces of information were not transmitted to the City
Council, including an eventual $15 million contribution by the city or the
SHDM and the fact that most costs to be deducted from the purchase price (for
decontamination and anti-vibratory measures) were only based on preliminary
assessments. Furthermore, the Executive Committee did not formally approve the
sale of the site to Catania.
The Auditor also observed that some transactions appeared to have been
concluded at less than market values. This was the situation with the Phoenix
land and with the buildings located at 730-780, avenue Brewster, at 1850,
avenue Lincoln and at 1225, rue Sussex. In the case of the last two
transactions, the Auditor found numerous irregularities in terms of criteria
used to assess the bids and the manner in which the bids were analyzed.
Finally, the SHDM does not seem to have tried to maximize its sale price
in the case of 1401-1501, rue Saint-Patrick or Maison Bagg.
The Auditor's report includes some 40 recommendations aimed at ensuring
greater transparency in reviewing development project applications, at
reinforcing existing rules of authority, at increasing diligence in sale of
buildings and at maximizing the SHDM's financial performance.
The General Auditor of the City of Montréal audits accounts and business
of the City and of any body or agent in which the City holds more than 50% of
the voting shares or stock, or for which it names more than half the members
on the board of directors. He also provides City Council with an independent,
objective opinion and assessment of the management of municipal affairs in
order to improve its quality.
For further information:
For further information: Patricia Lowe, Relations avec les médias, (514)
872-5467; Source: Bureau du vérificateur général