Dispute Between the Taoist Tai Chi Association

and the Cecil Street Community Centre

The Community and Neighbourhood Services Committee recommends the adoption of the following report (January 25, 1999) from the Commissioner of Community and Neighbourhood Services:

Purpose:

To inform the Committee on the status of the dispute between the Taoist Tai Chi Association and the City's Cecil Street Community Centre.

Funding Sources, Financial Implications and Impact Statement:

Not applicable.

Recommendations:

It is recommended that:

(1)the City support the Board of the Cecil Street Community Centre in the action brought against it and the City by the Taoist Tai Chi Association; and

(2)the appropriate City officials be authorized to take the necessary action to give effect thereto.

Council Reference/Background/History:

Prior to 1998, the Taoist Tai Chi Association rented the Cecil Street Community Centre auditorium for Tai Chi classes for seven and a half hours weekly. Participants in these classes were required to pay membership fees to the Association. According to the Centre, average weekly attendance at these classes was 114 students.

Rent charged to the Association prior to 1997 was based on membership revenue collected at each class. The Centre revised its complete fee structure effective January 1, 1997. It set the rental rate at $12.50/hour for non-profit organizations which charged program participants. The Association and one other body fell into this category.

The Centre advised the Association of this change by letter dated December 17, 1996. The Association objected strenuously, claiming the change resulted in a rental increase of over 100percent and refused to pay the new rental rates.

Throughout 1997, attempts were made to resolve the situation, primarily through a mediation process initiated by the Mayor of the former City of Toronto. The Centre agreed to a reduction in the rental rate to $9.00 per hour until September 1997, while the process was underway. But mediation proved unsuccessful and the dispute escalated to the point that the Association refused to pay rental directly to the Centre. Following an abortive attempt to set up a Centre trust fund into which rents would be paid, the Association started paying rent directly to the City at the 1996 rate.

In late 1997, the Centre made a final offer to the Association which essentially reflected their original position. The Association refused this offer and the Centre terminated their tenancy in January of 1998.

Members of the Association then held a demonstration outside the Centre, reportedly entering the Centre auditorium in spite of being asked to leave by staff. Police were called by Centre staff and subsequently charged the Public Relations Director of the Association with trespassing. In early December of 1998, he was convicted of this offence.

The Executive Director of the Centre claimed that after the demonstration she received threatening phone calls at her home. The Centre Board, in response to concerns over staff safety, as well as the security of the Centre, issued and posted a trespass notice to the Association, barring its officers, employees and representatives from access to the Centre.

With amalgamation, the Commissioner of Community and Neighbourhood Services inherited the issue. Despite the best efforts of Departmental staff to start from a clean slate the issue remained intractable. In June 1998, the Department retained the services of the former Metropolitan Auditor "to review both sides of the dispute, to attempt to negotiate a mutually satisfactory agreement and, failing that, to recommend a course of action which the City can take." Despite substantial effort by the mediator and considerable staff time, the attempt to resolve the issue amicably failed and negotiations broke down.

Throughout the dispute both sides issued a number of press release or other statements in respect to the matter, principally reported in the Chinese press. The Association's lawyers issued a letter to the Centre threatening possible libel action in respect to certain unspecified statements allegedly made by the Centre.

Although the Association stopped any further dialogue with the Centre in 1998 it has continued to press for a resolution of the matter and approached a number of City Councillors on the matter. In addition, a significant number of applications for membership in the Centre were received from Association members.

On November 23, 1998, the Solicitors for the Taoist Tai Chi Association wrote to the Cecil Street Community Centre to demand that the Annual General Meeting of the Cecil Street Centre, scheduled for November 26, 1998, be adjourned so as to permit "all members of the Taoist Tai Chi Society who are members of the Cecil Community Centre to submit nominations to the Board and to attend and participate in the Annual General Meeting." The Solicitors' letter then gave until 4:00 p.m. that day (the letter was received just before noon) to comply or the Association would "commence legal proceedings to compel the Cecil Street Community Centre to meet these requirements." On November 25, 1998, the Ontario Court of Justice (General Division) adjourned the matter till December 16, 1998, enjoining the Centre from holding its Annual General Meeting till subsequent to that date and on December 16, 1998, the issue was further held over till February 2, 1999.

On December 14, 1998, the Taoist Tai Chi Association issued an ultimatum outlining terms of settlement that the Centre and the City rejected as inappropriate and unacceptable in that they would essentially turn the Centre over to the Association by structuring the membership, board, fee structure, organization and management according to the terms set by the Taoist Tai Chi Association.

Conclusions:

To put the issue in perspective, the increase in rent requested by the Centre in 1997 amounted to about $48.00 a week. This amount is insignificant when compared with the time and effort, to say nothing of actual costs, which must have been incurred on this matter by both the Centre and the Association. Based on average weekly attendance the Association could have generated as much as $4,000.00 in revenue every month from classes held at the Centre at full adult rates. If some attendees attended more than one class and/or paid discounted fees, this figure would have been somewhat smaller. But it is clear that the increase did not impose a financial hardship on the Association.

These facts, as well as many other aspects of the dispute, are indications that the root problems underlying this dispute go far beyond the issue of rent. The Centre has articulated a number of these issues from their perspective. They include the size and wealth of the Association and the question of its consequent eligibility for taxpayer subsidized space. But more particularly they feel that the Association did not accept the mandate of the Board to operate the Centre. Under previous formulae the Centre had been unable to verify the accuracy of actual rent paid by the Association. The Board considers the change in the basis of the rent payable by the Association in 1997 as an attempt to resolve many of these issues once and for all. The Association considers it unfair treatment.

The Association feels that their long involvement with Cecil Street should be taken into account. In this respect they are partially correct. Regardless of the merit of their position, the Centre has not handled the actual implementation of the rent increase very well. It gave little notice to the Association of the increase. The Centre has also been completely unwilling to recognize that continuation of the long standing relationship might have justified some significant effort to seek a compromise on the rent increase.

The situation was further aggravated by the length of time that the Centre took to deal with what is considered deficiencies in the rental formula and its continued acceptance of the rental calculations made by the Association over the years prior to 1997. However, the Association should also have understood that the long term relationship was probably the only justification for an unduly low rent or minimal increase in the existing rent. The classes it held at Cecil Street provided a service to the community, but the bulk of the participants in their classes were not residents in the community. According to a letter from the financial administrator of the Association, residents of the Cecil Street neighbourhood accounted for only 13 percent of the regular adult fees collected over the first six months of 1994. Classes held at the Centre generated revenue for the Association at least a portion of which was directed by the Association to its interests beyond the community served by Cecil Street. In fact, in its offer for settlement referred to earlier, the Association is requesting that residence or work addresses in the Cecil Street catchment area no longer be a requirement for membership in the Centre. All of these factors beg the question as to whether in fact the services rendered by the Association should be considered to be wholly services to the Cecil Street community.

Given the level of revenue it generated from classes at the Centre, the increase cannot have been overly onerous for the Association. It was also the first change in rental in three years. The change resulted in a large percentage increase based on what the Association had been paying. But if the Association had been paying rent based on a more accurate interpretation of the previous rental formula the percentage increase would have been less. The rent is also well below commercial rates and well within the range of rates changed by other community centres for equivalent space.

Had a negotiated solution between the Centre and the Association proved possible, a reduction in the rental figure may have been warranted purely in the interest of resolving a dispute which has been going on for far too long. It is clear, however, that both parties are increasingly unable to deal with each other. Actions by each both prior to and during 1997 set the foundation for this situation although the potential for a settlement was still evident during the mediator's review.

The stated positions of the parties were in reality very close prior to the recent court action by the Association. The difference in rental rate of $12.50/hour requested by the Centre and the $10.50 tentatively agreed to by the Association amounts to $15.00/week. The length of time that it took before the Centre agreed to even consider a possible resolution seriously impacted the chance of an agreement. But the action of the Association in seeking an injunction against the Centre has made a negotiated settlement virtually impossible to obtain.

Options:

The City now has three options. The first is to accept the position as it is. This would effectively mean that the Association would not regain access to the Centre. Endorsement of this result, although not necessarily of the manner in which the Centre has handled the affair, would have the additional benefit of invoking closure to the matter.

The second option is for the City to impose a solution by Council direction to the Board. There are a number of problems with this approach; such direction has only been given before on issues of public policy and this issue can hardly be considered to fall into that category. Even with an imposed settlement, the present Board and the present Association members are unlikely to be able to work together. Given that underlying issues, rather than just rent, seem to have fuelled the existing dispute, it would be only a matter of time before problems reoccur.

However, the most significant problem with this option is deciding what to impose; it is difficult to see how a rent of less than that requested by the Centre could be considered. A lesser amount might have been justifiable in a negotiated settlement, but there is no real basis in which to recommend a reduction in the rental as part of a Council imposed solution. In addition, there are a number of corollary issues such as the time periods to be made available to the Association and the related impact on time allotted to other users of the Centre.

The third option is for Council to change the makeup of the Board and to request or even direct the new Board to reconsider the issue. This option might also deal with at least some of the issues addressed in the injunction sought by the Association. It also maintains the issue at the Centre level but, to be effective, it would also have to be clear that the Centre Board's decision on the matter would be supported by Council.

Changes in the Board could be effected immediately by replacing the existing Board, but this may not be acceptable to the Cecil Street community at large. Another approach would be to wait for an appropriate time such as the Centre annual meeting, the completion of the Council review on Boards and Agencies, (the O'Brien Committee) or the expiration of the term of the present City Council. Were this option to be implemented, Council should ensure that there was no undue representation on the Board by any one interest group, and that conflict of interest guidelines were both in place and enforced.

The only option, therefore, which can be seriously recommended is to support the Centre's Board and defend the City's position in Court.

Contact Name:

Eric Gam

Tel: 392-8238

--------

Ms. Cynthia Sherwood, Chairperson, Cecil Street Community Centre, appeared before the Community and Neighbourhood Services Committee in connection with the foregoing matter, and submitted a brief in regard thereto.