TDSB parts ways with CEO of real estate subsidiary

The Toronto District School Board has parted ways with the chief executive officer of its real estate subsidiary, 10 months after a review found there was significant distrust between the two organizations.

The TDSB replaced Daryl Sage on Monday as CEO of Toronto Lands Corporation, which manages the board’s $20-billion real estate portfolio.

“After careful consideration, the difficult decision has been made to part ways with Daryl Sage as TLC’s CEO effective immediately,” director of education Colleen Russell-Rawlins wrote in a memo to trustees on Monday.

Mr. Sage did not respond to an e-mail seeking comment.

Mr. Sage’s departure follows a September, 2022, performance review of Toronto Lands that found the two organizations had been in a dysfunctional relationship for years marked by “tension and distrust” and “many conflicts and inefficiencies.” The Globe and Mail published an article on the confidential report last Friday.

The review, which was commissioned by the TDSB and conducted by the Bay Street law firm Dentons, also found that Toronto Lands met provincial government officials without the full board’s approval, pursued its own independent goals and attempted to circumvent executive pay freeze legislation in seeking a raise for Mr. Sage.

The TDSB is one of the largest landowners in Toronto, with more than 600 schools and other properties. Toronto Lands, which was founded in 2008 and is unique in Canada, raises funds to repair aging schools through property sales. It also handles leases and land-use planning.

The revelations in the Dentons report surfaced at a critical time, as Ontario Premier Doug Ford’s government has set its sights on using surplus school lands to ease the province’s housing crisis with new legislation known as Bill 98. The government’s move raises questions about how much input boards will have when it comes to selling off valuable property.

In her memo to trustees, Ms. Russell-Rawlins referred to the Dentons report, saying “significant actions” have since been taken to strengthen relationships, including the TDSB’s appointment last month of four new citizen directors to Toronto Lands’s board of directors. She also said the TDSB had renewed a document outlining Toronto Lands’s mandate and responsibilities.

“TLC is embarking on a bold new phase in its governance and operations and has the capacity to take a pro-active approach to advising the Board of Trustees on the impacts of Bill 98. There is positive momentum, but there is also much work ahead of us,” she wrote.

It is not clear, however, what role Toronto Lands will have in managing the TDSB’s real estate assets once Bill 98 comes into force. The bill passed third and final reading last month, but the government has yet to release regulations detailing how it will control school land sales. In a recent interview, Education Minister Stephen Lecce did not respond directly when asked whether he envisions a role for Toronto Lands under the legislation.

In her memo, Ms. Russell-Rawlins said that the TDSB decided to part ways with Mr. Sage “given the aforementioned changes and the future priorities for TLC. We are grateful for Daryl’s contributions to TDSB and TLC and wish him well in the future.” Mr. Sage took the helm of Toronto Lands in January, 2014.

As part of the fallout from the Dentons review, Mr. Sage reported to Ms. Russell-Rawlins, rather than to the board of directors of Toronto Lands.

In addition, after Dentons issued its report to the TDSB last fall, board staff recommended changing the leadership at Toronto Lands, according to a confidential presentation obtained by The Globe.

The TDSB also gave itself a majority of seats on Toronto Lands’s board of directors. Previously, a majority of the subsidiary’s directors came from the private sector, many with experience in real estate and finance. However, before the TDSB’s restructuring took effect, Toronto Lands’s citizen directors resigned en masse in January.

The TDSB appointed Ryan Glenn, who was Toronto Lands’s director of real estate, leasing and strategic partnerships, as interim CEO.

Mr. Glenn began working at Toronto Lands last November. Before that, he was vice-president of client and stakeholder relations at CreateTO, the city of Toronto’s real estate agency.

The TDSB said it would retain an executive search firm to recruit a new CEO for Toronto Lands and expects the hiring process to be completed in late fall.

“Filling this role in a timely manner is important as TDSB and TLC continue to modernize and maximize the potential of our real estate portfolio for the benefit of our students and school communities,” TDSB spokesman Ryan Bird said in an e-mail to The Globe on Tuesday.