London Inc. Weekly: A summary of regional business news from the past week

Photo: Middlesex County Connect seeks funding deal with municipalities

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Weekly Regional Business Intelligence

Written by Kieran Delamont, Associate Editor, London Inc.

LHSC files bombshell fraud claim

London Health Sciences Centre (LHSC) dropped a bombshell on Wednesday, announcing it had filed two civil suits, totalling $60 million, alleging major fraud and negligence against former hospital executives. The bigger of the two suits is seeking $50 million in damages from Dipesh Patel, the former VP of facilities, along with Derek Lall, Need Modi, BH Contractors and GBI Construction (both companies owned by Paresh Soni, one of the other individuals named in the suit), as well as several other parties. That suit alleges the defendants inflated invoices, manipulated procurement processes and bypassed conflict-of-interest controls to award contracts to firms owned or controlled by the defendants. It also links that money to more than 90 “suspicious properties” in the London region. A second $10-million suit has been filed against Abhi Mukherjee, the CFO at the hospital from 2022 to 2024, ex-CEO Jacki Schleifer Taylor and ousted chief administrator Brad Campbell ― the hospital claims they knew about the fraud and looked the other way. “Late last year, we announced that we engaged London Police Service (LPS) to investigate past financial practices at London Health Sciences Centre (LHSC) in response to concerns uncovered by our hospital,” said David Musyj, the provincially appointed supervisor of LHSC, in a letter published in The London Free Press. “During the course of our investigation, we identified fraudulent activity within LHSC’s facilities management procurement practices that occurred between 2013 and 2024. … we have provided these findings to London Police Service as they continue their investigation. At this time, any other staff involved in this misconduct are no longer employed at LHSC.” None of the allegations have yet been tested in court.

The upshot: The allegations are very obviously a major bombshell, particularly since it comes against a backdrop of LHSC’s financial difficulties (to which these allegations may have partially, but definitely not wholly, contributed) and provincial supervision. Peter Bergmanis, co-director of the local branch of the Ontario Health Coalition, said, “I wish I could say I was more shocked and appalled ― the rumours were clear and present over the past six administrations. We had heard stories that couldn’t be confirmed, by the Ontario Health Coalition and allies within the hospital setting.” Now what will be interesting to watch for is how much, and in which direction, this reshapes the way the provincial review of LHSC’s operations and finances is heading. There will likely be more voices pushing for increased scrutiny of management practices and oversight. “The staff should not be left holding the bag,” said Bergmanis. “People are sick and have to wait excessive time, suffering in hallway medicine, and this is going on in our hospital. There is going to be hell to pay here.”

Read more: London Free Press | CBC News London

London surpasses $1 billion in building permits for 2025

The City of London announced it has already surpassed $1 billion in building permits issued this year, which puts it on track to match last year’s record of $2.2 billion. “Hitting the $1-billion mark in construction value six months into the year demonstrates the continued confidence of the development industry in London,” said Mayor Josh Morgan. The city said the figure represents 2,350 new housing units and 1,800 building permits since the beginning of the year, and attributed the strong pace of permit issuance to “the city’s creation of a process that prioritizes housing developments set to begin in 2025 by fast-tracking the approval of site plans and building permits,” noting that the number of approved housing units is the second highest in the last ten years. “Our fast-tracking of developments made London a nationwide leader in site planning and permit approval timelines in 2024, and our progress this year proves we’re building on that momentum in our commitment to delivering more housing options to meet the needs of Londoners,” said Morgan.

The upshot: London pretty reliably hits this number every year, so the interesting part ― the part the city is keen to play up here ― is how quickly they’ve hit it this year. Deputy city manager of housing Scott Mathers said the strong result came about in part due to the city’s focus on approving large-scale residential projects, as the city continues to work to improve intensification and development. “This milestone reflects more than just permit volume ― it shows that the tools we’ve put in place to accelerate housing development are delivering results,” Mathers said in a press release. “By prioritizing large-scale residential projects and streamlining our processes, we’re making meaningful progress toward increasing housing supply and supporting our growing population.” The largest of those approved this year is Auburn Developments’ 415-unit proposal at 100 Villagewalk Boulevard, near Sunningdale and Richmond.

Read more: London.ca

Middlesex County Connect seeks funding deal with municipalities

Middlesex County Connect, the regional inter-community transit service operated by Voyago that connects towns in the region (including London, Woodstock, St. Thomas, Lucan and others), said it expects to hit 15,000 trips this year, and is now looking to secure a more robust funding agreement in order to keep the service operational. A report to Middlesex County noted a nearly 700 per cent increase in ridership between 2022 and 2024, which county staff say demonstrates “substantial and growing demand for inter-community transit services.” It also said the province has agreed to fund up to 50 per cent of the operating costs through 2030 ― the maximum amount they could get through the Ontario Transit Investment Fund (around $3.4 million). But to cover the additional 50 per cent, the service is now hoping to strike a funding agreement with the municipalities it serves. It said that if at least five municipalities sign on, each would need to contribute around $422,000 to keep the service going. In addition, the service is seeking a slice of the provincial gas tax revenue that is traditionally used to support transit agencies across the province.

The upshot: Trying to cobble together funding, attempting to keep the fares low, lobbying the province for more money, trying to get some gas tax revenue ― this is the game transit agencies in Ontario traditionally have to play, so County Connect is in some sense graduating to the big leagues of transit planning. The steep increase in ridership is a good sign for the upstart transit service, so it looks like the demand is there, at least. “Feedback […] indicates strong support for maintaining and expanding inter-community transit services,” a council report suggested. With major industrial projects in the pipeline in St. Thomas, plus major employers like the YXU1 Amazon Fulfillment Centre and general growth in residential development around the region, County Connect is helping to plug some gaps in transit service, and the larger municipalities and transit authorities in the region will probably be keen to support the service, lest they have to then try to plug those gaps on their own. Middlesex County says it is working on putting together a joint delegation on inter-community transit with the City of London and St. Thomas for upcoming Association of Municipalities of Ontario conference in August.

Read more: Middlesex County | CBC News London

Residential and office district pitched by 100 Kellogg Lane

The owners of 100 Kellogg and the Hard Rock Hotel have brought a proposal to the city that outlines a comprehensive plan to significantly expand the complex, with a 44-storey and two 30-storey mixed-use towers, a six-story building, as well as stacked townhomes. The proposal, if it materializes, would add 974 residential units, 200 hotel rooms and around 22,000 square meters (around 236,000 square feet) of commercial, office and entertainment space across various formats. “Very excited about this announcement,” Brendon Ainscow, general manager of the Hard Rock Hotel, told CTV News London. “This is something that our ownership here at Hard Rock and 100 Kellogg have been anticipating for quite some time now.” The plan also includes two new parking garages and pedestrian walkways, all in all comprising a huge expansion of the space, from entertainment complex to a city district in its own right. Speaking with The London Free Press, planning chair Steve Lehman called the plan “terribly exciting,” and said he “feel[s] tremendous synergies” between 100 Kellogg, the Western Fair, the Gateway Casino and the under-development BRT along King Street.

The upshot: References to ownership’s future ambitions to add a major housing component to the site have popped up in documents around 100 Kellogg for a while, so the housing part isn’t surprising, though the scale — nearly 1,000 units, including a massive 44-storey tower — are a bit of a surprise (one that appear to be welcomed by city officials, at least). The 236,000 square feet of commercial and office space might be the more interesting inclusion, given the ongoing struggles the commercial real estate sector has been having in London over the last few years, although the quarterly CBRE vacancy reports have generally noted that the vacancies are being driven by Class B and Class C, and there remains demand for new Class A office space. Even so, you can imagine some questioning what that much new office space will do to the balance of the market. That said, the plan somewhat far off, with construction on the bulk of the project (if approved by the city later this year) aiming to be completed in the early 2030s.