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The mayor's Gardiner fixation may have more to do with development plans - and the future viability of SmartTrack - than saving the city from traffic chaos
News that the John Tory campaign’s chief policy adviser has been lobbying for two of the mayor’s pet causes has City Hall watchers connecting the dots.
When veteran political strategist John Duffy isn’t generously providing free advice to politicians during election campaigns, the founding principal of StrategyCorp is paid to lobby them on behalf of companies like Uber and First Gulf. Given the city’s current court action against Uber, it’s clear why the online ride service needs a connected strategist. But developer First Gulf’s power play requires a bit more unravelling.
Just six days after Tory’s election victory, Duffy’s name popped up alongside First Gulf CEO David Gerofsky’s on the city’s lobbyist registry for the Unilever site east of the Don River. Next to sign on the file was ex-Navigator consultant Courtney Glen, who served as the Tory campaign’s director of communications and special assistant to the mayor-elect. She tweeted her excitement at landing a senior role with StrategyCorp the day after Tory’s swearing-in ceremony.
Back in 2012, First Gulf, a division of Great Gulf, bought the 11 hectares of industrial lands at Lake Shore and Don Valley East with plans to demolish most of the Unilever factory to make room for a “Canary Wharf of Toronto” with 5 million square feet of “mixed-use employment… with a heavy emphasis on office.” Canary Wharf refers, intentionally or not, to Olympia and York’s London, UK, project, which ran out of money in the 90s and ended up relying on massive government investment to save it.
First Gulf’s proposal is promising up to 70,000 jobs, but for the development to materialize Toronto would have to fund a multi-billion-dollar wish list of projects.
The first is transit, a tall order for sure. Last year, First Gulf was offering to pay for transit access to build a sort of Penn Station. But that’s no longer necessary now that SmartTrack, Tory’s signature $8 billion above-ground subway proposal, includes service to a new hub at the Unilever site.
The second project critical to the development revolves around the future of the Gardiner, specifically the hybrid option being touted by Tory. Essentially, First Gulf prefers that the ramps that currently overshadow its property were moved to Castlepoint’s lands along the Keating Channel.
The hybrid option costs double the remove option, and the proposed ramps take out $100 to $150 million in real estate and disconnect new neighbourhoods from the Keating Channel waterfront.
But First Gulf says moving the ramps is necessary for extending its proposed “Broadview LRT” south from Queen Street.
The city has yet to assess the feasibility of First Gulf’s concept for its site. Fostering employment growth south of Eastern is a city objective, and the area is currently being reviewed through the South of Eastern Strategic Direction planning study.
Hemson Consulting, which is undertaking an economic analysis for the city, updated staff last year on initial results of its assessment, which looked at a number of factors, including potential job growth for First Gulf’s Unilever site. Correspondence between Hemson and the city suggests financial firms would be “less likely” to set up shop in towers built at the Unilever site.
Dense office towers with underground parking are not cheap, and as responses to Hemson’s area landowner survey underscore, “the cost per square metre for office space associated with new construction would preclude the ability to secure tenants and would prove too risky for investors.” The location was forecast to be better suited for affordable space for information technology and creative-sector firms.
Hemson’s evaluation pointed out that the area would also need substantially better transit infrastructure and amenities.
Notwithstanding this, Hemson does identify potential for non-residential development in the film-studio district, particularly if development momentum of new residential and mixed-use communities in the port lands is achieved.
Tory, however, has been sold on First Gulf’s plan since before he took office. In a backgrounder released during the campaign, he touted the proposal as a “large-scale employment development opportunity. The plan depends on a reorientation of the Gardiner’s eastern section and new transit connections in this area. It depends on a coordinated approach to planning and new transportation infrastructure, and it depends on strong leadership from City Hall.”
It’s also important in generating tax dollars to fund SmartTrack. Optimistic advisers told Tory that major new office development along the line could generate the city’s entire $2.7 billion share of the project’s cost through the magic of tax increment financing (TIF). More specifically, according to Arthur Lofsky, another lobbyist and volunteer Tory campaign adviser, the TIF scheme relies on First Gulf’s claim that its development could add $150 million yearly in property taxes. That’s the sales pitch, anyway.
Prior to becoming a politician, Tory spent decades as a powerful backroom political strategist for Conservative election campaigns. He was part of the kitchen table of advisers back when ex-mayor Mel Lastman claimed a developer levy would raise $1 billion dollars for the Sheppard subway. It raised nothing.
As leader of Ontario’s PC opposition, Tory called for the Spadina subway extension to be built by the private sector in exchange for development rights.
In 2006, the provincial Liberals passed the TIF Act to allow Toronto and York Region to finance their share of the extension. Since then the province hasn’t used TIF on any projects, SNC-Lavalin bailed on the Union Pearson Express, and Rob Ford’s TIF Scarborough subway-funding schemes morphed into tax hikes.
When First Gulf purchased the isolated Unilever property three years ago, they proposed an office park for up to 4,000 workers. What evidence caused the company to multiply job prospects to up to 70,000? According to First Gulf’s vice president of development Derek Goring, the answer to that question is coming in the next few weeks together with its site-plan application.
But employment is fighting a losing battle in the area, declining from more than 7,000 jobs in 2000 to fewer than 4,000 in 2011 as retail speculators like SmartCentres buy up private parcels along Lake Shore Boulevard.
And while First Gulf is pushing office development, retail is a more realistic scenario. John MacNeil, the current president of First Gulf, who’s kept a low profile on the Unilever project, is no doubt aware of that. He was previously president of big-box king SmartCentres, whose attempt to convert the nearby 8-hectare Toronto Film Studios to big-box development was, thankfully, quashed by the Ontario Municipal Board. Whether the city would oppose box stores under the current regime is an open question.
First Gulf has said it has learned the lessons from the financial collapse of Canary Wharf builder Olympia and York – the UK development ended up requiring billions in government investment in LRT lines and a subway extension – but it’s keeping other options for the Unilever site to itself.
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