Why Waterfront Toronto Is a Good Investment
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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.