Councillor Mark Grimes breached council rules when he took part in “improper” dealings with two different developers, a city watchdog was found.

After a resident in Grimes’ Ward 6 (Etobicoke-Lakeshore) complained about his conduct, integrity commissioner Valerie Jepson launched a 17-month investigation into the councillor’s involvement with the companies.

Jepson, in a report headed to council this week, found no evidence that Grimes gained financially from the interactions. But she chastised him for not following the rules and cautioned councillors to act with “due care” when dealing with developers in order to maintain the public’s trust.

In the first case, Grimes revised an agreement with Davies Smith Developments that resulted in $100,000 less in cash benefits than originally agreed to for one of his ward communities.

A side arrangement between Grimes and the developer committed $100,000 for improvements to a local park, but that deal not follow the proper procedures and the improvements never happened, Jepson found.

Grimes apologized for the transgression, Jepson wrote in her 44-page report, and said he has reviewed his practices for future negotiations. Jepson does not recommend further discipline, though council could impose it.

The councillor did not respond to the Star’s requests for comment on Friday.

When developers propose buildings that are taller or denser than city bylaws allow, provincial legislation allows cities to negotiate for community benefits, or cash in lieu of those benefits — what are known commonly as section 37 funds.

After Davies Smith proposed an 11-storey condominium on a corner at Lake Shore Blvd. and Superior Ave. — in an area of two-storey apartment blocks and single-family homes — Grimes and city planners negotiated $250,000 in community benefits, an amount deemed “appropriate” by staff. That agreed amount was noted in a city staff report and approved by Etobicoke community council in 2011.

But when the report came to council, Grimes successfully moved an amendment to decrease the value of the benefits to $150,000, a move that puzzled and angered local community members.

Based on interviews and a review of emails, Jepson found that, despite agreeing to the quarter-million-dollar figure reflected in the report, Davies Smith was not happy with the amount and continued to argue for a lower sum.

Through emails, Jepson discovered the side arrangement apparently negotiated by Grimes’ office, which one of Grimes’ staff told the city planner on the file would be “dealt with later.” Grimes did not give that reason when questioned about why he pushed for less section 37 money.

Jepson concluded that negotiation took place outside council’s policy on community benefits. Those rules, she noted, are in place to ensure stakeholders “cannot use voluntary donations to influence city decision-making.”

The discussed park improvements were never subject to a binding agreement the way section 37 funds are, and the cash and improvements have not materialized, Jepson wrote. Grimes told Jepson’s office that he is still pursuing those benefits for the community.

The integrity commissioner also found that Grimes improperly used the influence of his office when he appeared in a promotional video for another developer, Empire Communities, in 2014.

Grimes told Jepson’s office he believed participating in the video would help “to promote Ward 6 and bring awareness to a part of the city that is often overlooked” and his intention was to promote the ward, not the developer.

Jepson noted Grimes’ disagreement with her findings, saying he believed they “did not properly take into account that carrying out a member’s official duties could sometimes align with the commercial interests of a third party.”

Jepson found the video, which identified Grimes as a member of council, was a “clear endorsement” of the developer’s business.

“Although he stood to gain no financial advantage from any of these interactions . . . the councillor’s actions were improper uses of his authority,” Jepson wrote.

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Jepson based the evidence that there was no financial gain in either of the cases on her interviews under oath with Grimes and representatives from the developers.

Michael Craig, the Ward 6 resident who complained to the integrity commissioner and a community activist who aided the campaign of Grimes’ election rival, Russ Ford, told the Star he accepts Jepson’s findings. He stressed he has no proof of any financial wrongdoing, but said concerns remain.

“It has made progressive people in the neighbourhood rather nervous that he seems to be awfully close to the developers and seems to work very hard to further their ends,” he said.