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cityscape

Why Waterfront Toronto Is a Good Investment

Supporting revitalization now will pay off in the future.

A rendering of the mouth of the Don River, post-revitalization. Designed by Michael Van Valkenburgh Associates, Inc. Courtesy of Waterfront Toronto.

Waterfront Toronto‘s finances have recently run the gauntlet of City Hall grandstanding. On June 25, Councillor Denzil Minnan-Wong (Ward 34, Don Valley East), chastised the agency for its Sugar Beach landscaping expenses. Then, during an executive committee meeting on July 3, Mayor Rob Ford called Waterfront Toronto’s spending “a cancer.”

Amidst that sort of hyperbolic clatter, there have been three facts consistently reported about Waterfront Toronto: at the outset of its mandate, it received $1.5 billion from the municipal, provincial, and federal governments; that initial contribution is running out; and, for waterfront projects to continue, the agency will need to secure more government funds.

Sounds grim. But where has that $1.5 billion gone? Why is more money needed? And why should the government foot the bill?

In 2000, the three levels of government pledged $500 million each, in cash and land, to serve as seed money for Waterfront Toronto. Those contributions, says agency spokesman Andrew Hilton, were meant to last only through the first half of the revitalization process. “The original 1.5 billion will probably be gone by 2017 and that’s always been the case,” he says. “It was never foreseen that the 1.5 billion would pay for all the work that needed to be done.”

Waterfront Toronto’s 2014–23 Strategic Business Plan, released at the end of last year (halfway through the agency’s 20-year mandate), reported that $1.3 billion of the seed capital had been invested. That time and money has been spent largely on development strategy—conducting environmental assessments, remediating waterfront land, installing infrastructure (including for City services such as water and sewage), and so on—which is done before Waterfront Toronto enters into agreements with private developers.

The aim is to increase the value of waterfront land before it is sold. “Developers are interested in the area because instead of being an empty street and brownfields, there are these public spaces and the sense that something’s happening on public land,” Hilton says.

Waterfront Toronto puts proceeds from land leases and sales—amounting to about $376 million to date—back into the revitalization project. And, by setting the table for developers, the agency is on its way to paying back the original government investments. So far, its efforts have yielded over $622 million in tax revenue. And the six private-sector development projects already in the works are expected to yield another $838 million in incremental government revenue through income tax, HST, and development fees.

“Effectively we’ve paid back almost the entire initial investment the governments made,” Hilton said. “So we think that’s a very good investment and provides very good value.”

Waterfront Toronto had best hope the three levels of government think so too. The agency is asking them for $1.65 billion to cover the next 10 years of revitalization. The money will go towards projects that include naturalizing the mouth of the Don River, protecting the Port Lands from flooding, and enabling gradual development in the area. There’s also a plan for an East Bayfront light rail transit line that would run from Union Station to near the foot of Parliament Street. The projects—particularly development in the Port Lands—are expected to generate a return on investment for government.

The funding process is still in the early stages. At the same meeting during which Mayor Ford compared Waterfront Toronto to a disease, the executive committee recommended thatcouncil call for a strategic review of Waterfront Toronto, to be reported to back to the committee in 2015. Mayor Ford was the only member to vote against the recommendation. The report would help the City determine whether, and to what extent, they support the next stage of waterfront revitalization.

Waterfront Toronto’s greatest work has yet to be completed. The Port Lands, Hilton said, may not be fully developed for another 20, 30, or even 50 years. “The market has to bear all the new development that you bring in. But none of that can happen unless we can put in the infrastructure first, until we flood protect the land.”

It will take years; there’s no question about it. But, with the right support now, Toronto’s waterfront will one day be bustling and vital, and will generate revenue for city, province, and country.

Comments

  • Michael

    Amen. All projects to date have been world-class, unique and extremely well implemented. Kudos to Waterfront Toronto

  • wklis

    The naturalization of the mouth of the Don River will be a small, but useful, help towards relieving some, not all, of the flooding of the lower Don River. That a plus.

    • rich1299

      It could do quite a bit of good just by eliminating the hard right angle turn. The proposed park also has wetland areas which can take a lot of extra water when river levels are high to reduce flooding. The loss of wetlands is a contributing factor to increased flooding so the reverse should be true as well. That re-naturalization of the Don’s mouth and wetlands might not be enough on its own but it would likely mean some much cheaper option could be used to reduce flooding on the DVP.

  • Michael H

    20, 30 or 50 years? How do they expect people to get behind a project with that kind of time table? Personally, I think an agency who’s pitch is ‘we promise to have something great for you by the time you are all elderly or dead’ isn’t worth funding. Why would we settle for this? It seems to me that other cities like Barcelona, Melbourne, Chicago, London etc. have pulled of regeneration of their industrial waterfronts within something like a 10 to 15 year plan.

    • dsmithhfx

      He’s talking about real estate development that will eventually pay for some/most/all of the remediation that is a precondition for such development to occur. So from public use point of view, the benefits will occur sooner, then (hopefully) commercial development will follow in that 20-50 year time frame.

      • Michael H

        Let’s hope. It’s hard not be cynical though considering we have been hearing about the impending great Portlands revitalization for….oh, 20, 30, 50 years?

        • dsmithhfx

          Cynicism is easy. Reading is hard.

          • Michael H

            Huh?

    • rich1299

      The problem being if all that land, an area larger than Toronto’s downtown, were put on the market within just a 10-15 year time frame it would create a massive over supply and have a hugely negative effect on prices and land values across the city. People who’ve invested in real estate could lose everything and tax revenue for the city would drop right off at a time when demand for services would be greatest. By taking 20-50 years depending on market conditions land values will remain high so the investment made in WT will continue to have a positive rate of return and no one will lose their investments in real estate across the city. Adding another larger downtown sized area to Toronto can’t be rushed.

    • Zoon Politikon

      There are immediate benefits to many Waterfront Toronto plans – including the athletes village and corktown common, east bayfront, sugar beach area, the York Quay, wave decks, Queens Quay Revitalization, etc. These projects will fill in the east side of downtown, spur revitalisation of adjacent areas, and make the city as a whole much more attractive.

      THEN we speak about the Port Lands. There will be a huge park, a massive watershed area, and a huge new neighbourhood (which is larger than the downtown core, as has been mentioned). The main problem is that NO development can occur without flood protection, which will cost at least 400 million. This is holding up the process; but even still, the park will be there within a reasonable time, and the outline of the neighbourhood should take shape within 10 years. Then, market demand will determine how fast everything gets built out – which could be 20, 30 or more years, because there are still other areas downtown that have vacant lots and/or redevelop able land (though less and less all the time.)

  • torontothegreat

    Recently, I have started to spend a great deal of time on our waterfront. The progress being made is astonishing and beautiful. The only people who would say this project is a “cancer” have clearly never spent anytime themselves there.

  • hgushee

    Two things threaten the successful development of the waterfront:
    1) short term thinking of the sort demonstrated by Rob Ford and Denzil Minnan-Wong (nothing without an immediate payback is worth doing; the public sector has to justify is spending within the election cycle or its waste), and
    2) Billy Bishop Airport expansion (which will degrade property potentials, and restrict development potential by limiting building heights allowed in the Eastern Portlands, not to mention Ontario Place). Transport Canada already has its own air space regulations, and moreover, FAA regulations just coming in that require clear flight paths in an “engine out” scenario will no doubt influence future Canadian safety regulations. Long term thinking is necessary: a green light for airport expansion is a red light on long term waterfront development. And the time frames discussed in this article are totally relevant: the current airport lease runs until 2033, but the Toronto Port Authority (federal body running the airport) wants that lease extended to 2083 (no, that is not a typo) as a condition on expansion NOW. That would confine waterfront development for another 70 years.
    The only way Toronto can plan with a long view is organizations like Waterfront Toronto that are detached from the fumbling fingers of the sorts of Rob Ford, DMW, and Doug Ford. Would that Metrolinx was equally free to execute a long term transit plan without political and private interest interference.

  • Don

    No question in my mind that the first 1.5 billion was well spent and the next 1.5 will quickly be seen to be appropriate. Interesting to juxtapose this item with the piece on “sticky streets.” I hope there are plans afoot (by entrepreneurial souls especially) to make Queen’s Quay stickier. Walking/cycling/blading etc. will be pleasant. But we need more reasons to go there and stay awhile. .