An Etobicoke community group is demanding to know how $650,000 earmarked to help restore the century-old Mimico train station was spent.

The group that runs the historic station on Royal York Road says all they're left with is a condo sales centre.

"We have spent the last four years under an illusion. Betrayal is not too strong a word. Not just for our group, but for the entire community," Richard McQuade of the Mimico Station Community Organization (MSCO) told CBC News.

The developer, Terrasan, its parent company Stanton Renaissance, and the City of Toronto signed what's known as a Section 37 agreement in February of 2011.

Section 37 agreements allow a developer to contribute money to a community project in exchange for permission to build a taller tower than normally allowed. In this case, the developer agreed to renovate the 1,200-square-foot historic station at a cost of about $650,000.

In return, Toronto city council rezoned nearby lands so the developer could build a 26-storey condo project called On the Go Mimico.

As part of the deal, city council also allowed the developer to use the station as a sales office and presentation centre for two years. It's located in a public park, across the street from the proposed condo development.

In an email to CBC News, Louie Santaguida, President of Stanton Renaissance, said "the first phase of the restoration was completed."

Santaguida didn't say, however, what further work might be done.

Rail museum and meeting space

The historic station was built in 1916 and is the last remnant of the Grand Trunk Railway in Etobicoke. The community group hoped to return the station to its original condition with a passengers' waiting area, a luggage room, and a ticket kiosk.

The station would become a public rail museum and provide meeting space for the neighbourhood.

But members of the group said they only found out last week when approached by CBC News, that the deal with the city states the developer is not actually obliged to restore the interior of the train station.

Mary MacDonald, the city's manager of heritage preservation services, told CBC News that although the community organization's plan was used as the basis for the work "the city's expectation was that the developer would be responsible to complete the exterior rehabilitation and not the interior restoration."

Coun. Mark Grimes called the deal between the city, the developer and the community organization a "win, win, win." (CBC) In a promotional video for the condo project released last year, Ward 6 city councillor Mark Grimes took credit for helping broker the deal between the developer, the city and the community organization.

Grimes said it's "been a win, win, win."

In an email to CBC, Grimes said he has "facilitated multiple meetings between the group, the [developer], and city staff to discuss the scope of the work.

"Mimico has a rich history and I'm happy that we've been able to save one of the last remaining historic train stations in the city," Grimes wrote.

However, the councillor couldn't explain why the city and the developer have not fulfilled the community group's expectations for the renovation.

He agreed to meet with the group this week to discuss the problem but the group cancelled citing frustration with the way their concerns have been dealt with by the city.

Members of MSCO say they have spent a decade and thousands of hours volunteering to save the station. Architect Klaus Dunker created the technical drawings, outlining details of the full restoration.

Like others in the organization, he thought interior renovations would be completed. After learning that's not the case he said the Section 37 doesn't benefit the community. "The promise would have helped us, the facts don't," Dunker said.

'We've lost the entire interior'

The interior of the old station currently looks like a modern condo sales office. The developer removed the original wood panelling on the walls and ceilings, and replaced it with drywall, halogen lighting and vinyl flooring.

The developer also removed interior walls and moved a staircase. A "Presentation Centre" sign remains above the front door of the station.

Bill Moffat of the MSCO worries the community group now has to pay to fix all that. "We've lost the entire interior. It's a very big cost and it's almost impossible for us to achieve that now because we've lost four years in the life of the community group."

The city has a cost estimate that details how the developer planned to spend the $650,000, including the foundation, electrical and mechanical work.

The plan was approved by an architect who specializes in historical restorations and by city staff. But city officials refused to release the information to CBC News.

They said a freedom of information request would have to be filed.

Developer responds

The developer did paint the exterior of the station. He also did some structural work, adding a wooden front deck and a retaining wall, according to MSCO.

But members claim they had already completed "90 to 95 percent" of the exterior renovations —including a new roof, windows, stucco and replica wooden doors — before the developer arrived. They say they also paid for the plumbing and electrical upgrades.

The developer, Terrasan 327 Royal York, and the parent company, Stanton Renaissance, emailed a response to CBC News.

"All the parties (Terrasan, the City, and the Mimico Station Community Organization) were in discussion about this earlier in the week and are close to finalizing the scope of work," the email states.

But MSCO denied they were involved in that meeting.

McQuade says he wants a financial audit.

"If that $650,000 was applied to the interior of this building we would now have a proper museum for this part of Toronto. We would be giving back to the community a profoundly important asset. Instead we've got a closed real estate developer's office in an old building. That's all we've got," he said.

"I have serious questions about the way everybody involved in this from the city side, how they managed our affairs," McQuade said.

In January, citing transparency issues, Mayor John Tory promised a review of the Section 37 process after another community group questioned the amount of money they thought a developer had earmarked for their neighbourhood:

However no reviews have taken place.

Have a tip? Email John Lancaster at john.lancaster@cbc.ca.