Listening to the first post-kumbaya consultation by Waterfront Toronto, at the Toronto Reference Library a week ago, I was struck (again) by the sense of sheer unreality in the new rhetoric about accelerating development on the Port Lands. If you could inject truth serum into Waterfront Toronto CEO John Campbell and John Livey, the deputy city manager, they’d both readily confess it will take a century to build out this 700-hectare sludge pile, the largest of its kind in North America.
All together, now: C-E-N-T-U-R-Y.
And that’s if we’re really hustling.
To cite just one comparison, the railway lands, at about a quarter of the size, remains a work-in-progress three decades after the redevelopment process began. It’s not that the process is snail-like; rather, the market (yes!) can only deliver and then absorb so much new construction activity. It’s the way of our world.
But the waterfront mandarins must now worship at the altar of acceleration because that’s what the brothers Ford believe they procured for Toronto’s impatient citizenry. So no one talks about 25-year horizons and phasing strategies anymore. Rather, the city is looking across the full breadth of the Port Lands for `quick wins,’ which is to say, something – anything — the Fords can brag about in 2014.
I’d wager heavily that Campbell and Livey, deep down in their savvy and experienced hearts, don’t believe a word of it, and neither should anyone else.
That said, the Fords could actually do something that would shift this ocean liner of a project from first gear into second. And here’s the cherry on the sundae, guys; that little something wouldn’t cost you a dime:
My suggestion: call your best bud Jim Flaherty (but not while driving) and ask him to start talks with Queen’s Park on legislation that would allow Waterfront Toronto to debenture, with the feds signing on as guarantors if those loans go south. The city’s piece of the deal: allow Waterfront Toronto to retain real estate revenues.
By giving the agency the power to borrow within prescribed limits, Waterfront Toronto can take on the necessary mortgages to build vital infrastructure – the Don Mouth naturalization, public spaces, transit, etc. – in advance of planned development. The improvements to the public realm, in turn, serve to increase property values, thus creating more downstream revenue to the corporation, a portion of which it will use to pay down the aforementioned loans.
Anyone with the wit to set up that kind of virtuous circle will get the much desired acceleration on the Port Lands, as well as high quality but financially sustainable development.
As it happens, waterfront development corporations all over the world enjoy borrowing powers specifically because the affiliated governments recognize the cash flow problem inherent in all such projects. Among them: the Battery Park City Authority, which revitalized a large track of Lower Manhattan’s waterfront.
But we don’t even need to look beyond our own city. When Ottawa established the Toronto Harbour Commission back in 1911, it granted the agency borrowing power, which it used to finance the construction of the Port Lands and other infill lands along the inner Harbour. This isn’t just an interesting piece of historical trivia: if Wilfrid Laurier’s government hadn’t had the foresight to equip the THC with adequate financing tools, we wouldn’t be having this debate today.
It’s also worth noting that the Toronto Port Authority, the THC’s successor, continues to have and exercise the power to borrow against future revenues to develop its operations. (See TPA Letters of Patent, section 7.2 (a)(iii), on “issuing bonds, debentures or other securities of the Authority.)
There is a certain degree of perversity on Ottawa’s part in all this, giving one agency all sorts of financial heft while leaving its first cousin high and dry after the initial tranche of public funding dries up.
Waterfront officials, of course, know this story well, and point out that they’ve been pressing the three shareholders to ante up borrowing power since the get-go a decade back. As WT vice-president of government relations Marisa Piattelli says, “We’ve been talking about this almost since the inception.”
These days, John Livey, who serves as the mayor’s eyes and ears on the acceleration file, says that WT and city officials will be looking at other revenue tools, such as tax increment financing or special development charges.
The province allows the use of TIFs exceedingly rarely. As for pay-as-you-go, such revenue tools likely won’t generate sufficient cash flows, nor will they give Waterfront Toronto the financial heft needed to make the kinds of infrastructure investments that will attract serious investment dollars for decades to come.
Let’s just repeat that last bit: decades to come. A long time ago, Torontonians gave the municipality the right to borrow sufficient money to build certain things – the Bloor Viaduct, the Port Lands, the subway. Those long retired loans didn’t result in municipal bankruptcy and moral collapse; quite the opposite. They’re still generating cash dividends no one would have ever dreamt of a century ago.
In other words, if our speed demon of a mayor genuinely wants to get things moving in the Port Lands, he’s going to have to sell this critical change to the other orders. Otherwise, the city’s never going to get itself out of neutral, no matter how much the Fords bluster on about gunning the development engine.