LORINC: Let’s Play Ball with the Waterfront (Again)!

The brothers Ford launched a big boulder in the direction of Waterfront Toronto last week, first denigrating the agency’s efforts as a “boondoggle” and a waste of taxpayers money, and then signaling that its budget is under review.

I’m guessing there’s an unspecified end game here, one that has little do to with the administration’s insinuations about corporate misspending (e.g., Denzil Minnan-Wong’s snide tweets about WT’s “high salaried communications staff”).

It’s worth having a quick look at the agency’s spending plans and track record, because the numbers, all nicely audited and approved by the three shareholders, tell a substantially different tale than the Ford’s fictional version.

Between 2001 and 2010, the agency’s latest statements [PDF] indicate it has spent $725 million on a range of capital projects, including $182 million on utilities and flood plain protection (a provincial regulatory requirement before any private sector development can take place in the West Donlands); $177 million on public spaces; $120 million on land acquisition (i.e., assembling parcels that will be attractive to developers); and $197 million on transportation, the bulk of which has flowed through to GO Transit expansion and the Union Station-Pearson link.

According to the city’s own budget documents [PDF], Toronto’s contribution to WT’s total corporate costs from 2011 to 2019 runs to about $28 million, or just under 7% of the total outlay. Yes, some of the senior staff appear on the sunshine list, but the actual figures — as opposed to the fantasy version — suggests the gravy train didn’t spend a lot of time at WT’s headquarters.

Indeed, the city’s budget documents offer some much more revealing clues about the Fords’ intentions. A Queen’s Quay LRT, for example, is still part of the long-term capital plan. The reason it’s there, despite the Fords’ well-known aversion to streetcars, is that WT’s plans are subject to the agency’s tripartite approvals process, meaning the brothers can’t just hit the delete button, as is their wont.

It is interesting to note that on March 9, a team of three in-house lobbyists from Rogers — including the president of Rogers Media, the division that owns the company’s sports properties — paid a visit to Doug Ford, ostensibly to talk about cell phone towers.

Now, as far as I know, city bureaucrats rubber-stamp cell phone tower applications, so it’s difficult to know why Rogers — which owns the Blue Jays and the Rogers Centre and is famously on the prowl for an NFL franchise — would need to dispatch a platoon of high-ranking arm-twisters to chat up Doug on such a quotidian matter. Perhaps something else came up in the course of a congenial conversation.

Lo and behold, as my colleague Marcus Gee reported in the Globe and Mail on Saturday, Doug a month later has found himself musing publicly about the Hearn Generating Station as a venue for a NFL football stadium. He’s certainly not the first businessman to think about building such a facility on the portlands. Various schemes have surfaced over the years, including a smelly gambit by the former city agency TEDCO to extend grocery magnet Steve Stavros’ lease on a large chunk of waterfront real estate that looked to be a potential stadium site (the secret deal was later nixed).

Tactically, then, the Fords’ conspicuously public aspersions about WT may in fact be aimed at prompting the other two shareholders to crack open the agency’s plans so they can re-arrange the long-range capital budget and cancel the sorts of investments the Fords don’t care for. After all, an NFL stadium certainly won’t get built without a generous dollop of gravy from the public sector, and it seems as if Doug’s had some ideas on where the city can find those dollars.

The remarkable point about all this back channel maneuvering is that the target of their opprobrium, Waterfront Toronto, has been scrupulously, and sometimes frustratingly, transparent about the way it has gone about its business.

They consult relentlessly, follow regulatory procedures to the letter, expose their plans to extensive public and professional scrutiny, and rely on a meticulous approach to procurement, which is how they’ve attracted, in the past three years, developers with very deep pockets, including Houston-based Hines, one of the world’s largest real estate firms, with $23 billion in property assets.

Despite the mayor’s wearying rhetoric about sole-sourcing and respect for taxpayers, the brothers’ boundless contempt for public process and transparency continues to astonish, and stands in stark contrast to the way WT operates.

Maybe a football stadium on the Hearn site is a good idea. Certainly, the SkyDome played an unexpectedly important catalyst role in the redevelopment of the rail lands. But if the gambit here is that the brothers want a football stadium, and if they want Waterfront Toronto and the other two shareholders to re-direct waterfront revitalization funding for such a venture, why not take the high road?

Even though he skips the meetings, Rob Ford does have a seat on the Waterfront board, and of course he has close personal ties to the federal minister in charge of the agency (Jim Flaherty). Yet instead of engaging the agency and the public in a straightforward debate about the idea on its merits, Doug and the ventriloquist dummy in the mayor’s office seem to be trying to, well, fake right.

The hypocrisy is stunning.

photo by Sam Javanrouh


  1. Ugh.  This just stinks.  Let’s not forget the sweetheart deal that Rogers got on the Skydome purchase – wasn’t it something like $25,000,000 for something that taxpayers paid $600,000,000 for???

  2. Skydome was sold by the provincial government for $151 million to a private consortium in 1994. The decreases in value since then has been born by various private companies that have owned it.

  3. I believe that the $600 million cost for the Skydome included the replacement building for the John St. Pumping Station, the footbridge at Peter St., the replacement of the Spadina bridge (with prefab LRT tracks), the Skydome hotel, the Skywalk and all the landscaping around Skydome. When Rogers bought it they just got the stadium and none of the other stuff as well the Skydome was way behind in property taxes and the old owners wanted out fast.

  4. It seems to me that the “end game” here is pretty obvious. With the city looking at a $3/4B shortfall next year, and the Fords desperate to avoid looking to expand the tax base to make up for it, they have to find assets to dispose of. Denigrate Waterfront Toronto, and it becomes a lot easier to justify selling off a bunch of land for a quick one time sale that you can book against the deficit.

    It’s the right wing way – this is from Flaherty’s playbook when the provincial Tories sold the 407.

    And if it goes according to plan, the Fords will have a short term credit and Toronto will be paying the price (through loss of control of the development of our waterfront) for decades to come.

  5. RoFo started musing about an NFL franchise almost within hours of taking office, remember that? At the time I joked that the whole run for mayor was nothing but an elaborate ploy to bring an NFL team to Toronto. I guess maybe it wasn’t a joke after all. The Fords aren’t politicians, just the world’s biggest football fans. Maybe they can git us a NASCAR race too. Meatheads.

  6. The great irony in all of Rob & Dougie’s recent musings is that it has given Hines Corp. the jitters, and Hines is exactly the type of huge, rich private entity the boys will have to rely on to fund their subway plans. The precedent of abandoning the City’s prior committments to Waterfront Toronto, if it were to happen, wouldn’t exactly be helpful in convincing a private investor to drop a few billion dollars.

    Oh, and I didn’t see a mention in John’s article, but apparently Dougie also thinks a monorail to the stadium would be really swell. Privately funded, of course!

  7. I agree with Bruce, but the Fords are not unaware of the effect their statements would have.  But what advantage is there for them in having an credible international developer take part in the Portlands development.

    The Fords are pisspot parochial politicians.  And they are now deeply in hock to a number of local, moneyed interests who would love the opportunity to develop something half-assed in exchange for a lot of money.  

    Usually Paul Godfrey has a hand in these sorts of Conservative Party quid-pro-quo arrangements.  Didn’t the Bitoves get sweetheart deals at the Dome and were lining themselves up again if Toronto had won any one of a series of Olympic bids.  Name your poison!

    I think they are making noise with the idea that they would like to scare away a competent developer with a reputation to protect.  And hand the project to the usual gang of local villains.   The ones who gave us the Great Depreciating Dome and $7 hot dogs.

  8. What Hines Corp is really afraid of is missing out on the subsidised clean up and infrastructure that Waterfront Toronto is providing.

    Doug is 100% correct. The city should not be subsidising condo developers. Each new unit constructed will increase the city’s operating shortfall. Dr. Enid Slack, whom is head of the organization that gave Spacing an award, compiled figures nearly a decade ago that showed the cost to provide police, fire, ambulance, parks, libraries and roads averaged $3400 per household in Toronto. Add in inflation and that figure is closer to $4000 today. Just to cover the average cost of traditional municipal services, each unit will require an assessment value of $680,000. The city will also be on the hook for the a large portion of the site servicing costs, as the development fees in Toronto are on a fraction of the true costs.

  9. John, what’s the best way for concerned Torontonians and WT advocates to get involved here, and help get the word out to those of us not reading Spacing, etc? I have heart palpitations when I think about how the Fords were elected – by a large number of people who don’t read, listen to sound-bite news, and did not actually know what they were voting for when they voted. (I know this may sound extremely left-wing-elitist, but I have a steadily increasing supply of anecdotal evidence to back this up.) I can only imagine how many people who care about a nice waterfront have no idea what’s really going on here, or of how big the lies are that Doug and Rob tell every day in the mainstream media. And, as someone who has been peripherally connected to the east bayfront redevelopment for over a decade, I just want to cry when I think of the labour, time, care and love of ordinary Torontonians we stand to waste here.

    I’ve already called city hall and sent a letter, via the clerk’s office, to council. Please tell me there’s more I can do, more places I can get involved and get active.

    Thanks as always for your superb work,
    Kim Solga

  10. Its been 10 years and we have very little to show for it. That’s what makes me mad. If some one wants to build another arena there fine. Just build something. Toronto’s waterfront is an embarrassment.

  11. @Glen — This isn’t about subsidizing condo developers and never has been. For all sorts of financial, legal and regulatory reasons outside the city’s control, much of the land in the waterfront simply could not be developed (i.e., sits in a flood plain, environmental liabilities that create negative land values, etc., lack of municipal servicing). The public sector has a well established role in financing infrastructure improvements as a means of generating private investment. That is almost entirely what Metro did from the mid-1950s to the 1970s, except Metro didn’t have to deal with toxic soil… 

  12. Glen – either the developers pay pennies on the dollar for contaminated land, or they pay actual dollars for clean land, which among other things will mean higher land transfer revenue for the City on completion.

    Instead Doug Ford wants to sell the land for what it’s worth now (little) for developers to do cleanup to their liking but also kill the land transfer tax so that when the developers sell on, the City gets nothing!


  13. Glen said, “the cost to provide police, fire, ambulance, parks, libraries and roads averaged $3400 per household in Toronto.”

    This won’t be average Toronto households, but fairly high density condos where providing those services should be well below the average. Also the plan, which Ford wants to throw out, is to build quite a bit of commercial space as well, which should bring in additional tax revenue.

  14. i think a new stadium would be nice BUT! Do not scrap Waterfront Toronto!…EVER. how about Rob goes to the meetings and makes a proposal to “include” a stadium and maybe become a bit more enthusiastic…. because im tired of his lazyness with Waterfront Toronto. Besides i seen renders of Waterfront Toronto portland with lots of green but sadly more condo’s…. we could possibly fit a stadium in their…. but i think it’s best put somewhere else away from the green

  15. I will barf tears of anguish if Toronto ever gets an NFL team.

  16. How about this as a left-right consensus? NFL stadium for the portlands, to be served by an LRT from Union Station. Duel of the acronyms… 

  17. According to Glen’s logic the only way for the city to succeed, budget-wise, is to gradually reduce it’s population to zero.  Clearly, this approach can be seen working wonders in such urban success stories as Detroit and Buffalo, both of which, by the way, have NFL teams and stadiums that are easily accessible via uncongested freeways. 

  18. John, I am not suggesting that there is an a deliberate intention to subsidize condo development on the waterfront (or elsewhere), but the current tax and dev fee climate make that result inevitable.

    Darwin, the expenses I listed, with the exception of roads, do not scale well with density.

    Mark, the difference of developers paying pennies on the dollar for contaminated land vs. the public footing the bill for cleanup and then selling it for less than the cleanup costs is academic. We need to compare what WT is paying for contaminated land and compare that to what it is worth after cleaning.

  19. Glen has almost put his finger on it here (though not actually on it). The EIS shows some interesting numbers.

    Much of the shortfall between the $840m to be spent and $472m direct value add can be attributed to WT’s $130m contribution to GO Transit and $25m to UPRL. No developer would make such contributions directly and only minimally by provincial and federal taxes and contributions. WT has also funded other infrastructure items like the Union Subway 2nd Platform and a District Energy Facility – again not items a developer would normally be obliged to fund directly.

    The question is whether government would have spent that money irrespective and recovered it in part from the developer but building enough to also meet future demands from existing users and future development. No private sector development bears all its incremental costs – they might pay for a new street here or a new sewer there but the network incremental cost is borne by everyone. If we add a lane to the DVP or paint HOV lanes, how do we identify which development caused those additions to flip from “nice to have” to “essential must do”.

    By including costs a developer would pay with those government would normally cover, of course the Cost Benefit stinks. By routing capital investment through a quango funded by levels of government rather than those governments writing cheques directly, some of the total cost is buried from those who pay taxes to those governments.

    Waterfront Toronto does not help its case by handing $1.4m of *operating* funding to Harbourfront. What’s that about?

  20. @ Glen: Your comments about return for expenditure are not set with the correct context, nor does WT’s pdf you linked to tell you the true value of the land following sale to private developers.

    Much of the investment has not seen return yet for its being spent on brownfield remediation of the East Bayfront, Portlands, and West Don Lands.Wait until these places get built out before you judge.

    If you read carefully, you’ll see 840 M for 1.9 B in economic impact, mostly for Toronto. The tax return on investment is indeed small today, but again they do not tell the entire story. To quote the report: ” Although these expenditures are significant, they are still quite small compared to the recurring benefits, such as permanent jobs, property taxes, income taxes, tourism spending etc. that will be experienced with the development of the office, residential, commercial and cultural and entertainment uses, that would not occur without the initial direct investment by WATERFRONToronto.

    This is what redevelopment agencies are all about. Invest to make more. Your comment only hits on one point in the presentation, the one you care you make.

  21. Wow, a media blog with an intelligent back-and-forth without name calling? Who’d a thunk!

    I think Baray and Mark both hit it perfect. Not to demean Glen, but the point he is making is very narrow in scope (only focusing on one aspect of the costs) and misses broader implications of redevelopment (long range taxes, and value increases).

    This seems to be a similar tract of thinking the current mayor and his staff are using for all of its analysis — just look at the cost, figure out how to reduce or eliminate it, and give no second thought to its trickle-down implications.

  22. The problem with trumpeting ‘net economic impact’ is that there is no clear definition of how it is derived. In calculating the net benefit, the WT document makes the common mistake of viewing the additional municipal property tax as being free from any associated costs. The province and feds enjoy that reality. For municipalities, each new household requires added services. In the case of Toronto, the costs of services for residential development far exceeds the tax generated. I mentioned this in my first post, and Spacing can easily confirm this from Dr. Slack. It should also be noted that WT must offer subsides greater than those available via traditional brown field tax incentives. Otherwise developers would have snapped up these properties and utilized that program instead.

    Once cleaned up, these properties will still face a tax climate that will ensure that the vast majority what is going to be developed will be residential. Which was my original point. The city is effectively paying upfront to promote development that will provide ongoing operational losses.

  23. I am new to Tdot and find it very interesting that for the most part this city is filled with uninspired whiners. Sorry to name call…I am just saying. There is a lot of potential here and opportunity to think outside of the box in terms of funding for projects and organizations and (re)development. The arts play a huge roll in the realization of people-oriented usage on the waterfront…Here’s another idea – how about a few more places to have a drink on the waterfront…maybe things could be seen more clearly over a pint of Steamwhistle.

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