{"id":9600,"date":"2010-03-03T09:30:49","date_gmt":"2010-03-03T14:30:49","guid":{"rendered":"http:\/\/spacingtoronto.ca\/?p=9600"},"modified":"2013-01-21T15:17:10","modified_gmt":"2013-01-21T20:17:10","slug":"could-toronto-sell-leases-on-the-gardiner-and-dvp","status":"publish","type":"post","link":"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/","title":{"rendered":"Could Toronto lease out the Gardiner and DVP?"},"content":{"rendered":"

\"\"<\/p>\n

There was an interesting article in the Star<\/em> recently (with a misleading headline) about how Chicago’s chief financial officer arranged leases on profitable city-owned infrastructure<\/a> with private companies, and so raised billions of dollars of capital for the city. These assets included some parking garages, all the city’s parking meters, and the Chicago Skyway<\/a>, a 7.8 mile toll bridge and road connecting two expressways.<\/p>\n

Leasing is certainly a better option than selling valuable city assets outright. The city raises needed money, and then, eventually, the assets return to the city and it can either start managing them again and get the revenue directly, or re-lease them.<\/p>\n

It’s not ideal, though. Leases tend to be very long term (e.g. 99 years), so it’s not much different from privatization in the short term. And it might not make a lot of economic sense to sell or lease an asset that makes good money (such as Toronto Hydro), as economist Jim Stanford explains in the article:<\/p>\n

“Think of Toronto Hydro,” said Stanford. “The city typically earns an annual profit of about 10 per cent on its equity investment. Some of that (but not all) is paid to the city as a cash dividend; but even the profits that are retained inside Toronto Hydro are still new wealth for the City.<\/em><\/p>\n

“If you sell off an asset that earns 10 per cent, in order to pay down debt (or avoid new debt, which is equivalent) on which you pay 5 or 6 per cent interest, have you made a good decision? Obviously not. <\/em><\/p>\n

“Your balance sheet is no stronger: debt is lower, but so are your assets.”<\/em><\/p>\n

On the other hand, reading the article (especially the mention of the Skyway), I wondered whether it might make a sense to set up a lease on city assets that don’t<\/em> earn any revenue but have revenue-generating potential, with a private company that is<\/em> able to earn revenue with them. In return, the city could get a big dose of capital funding. I am thinking of the Don Valley Parkway and the Gardiner Expressway, which were handed over to the city to manage (and pay for) as part of the Harris government’s downloading.<\/p>\n

Both highways cost the city money to maintain, and provide a significant benefit for their users (much faster travel times) for free and, as a result, are heavily over-used (reducing the user benefit as a result of congestion). They seem like obvious candidates for user-payments through tolling, but this option gets huge resistance because it looks like a simple cash grab by the city, and the alternative travel options (the subway lines) are already at or near capacity. The result is a Catch-22: the City doesn’t want to establish tolls without alternative transit routes, but it can’t build alternative transit routes because it doesn’t have the capital funding.<\/p>\n

But setting up a lease on these highways with a private company that would install tolls, in return for a large capital injection for the City, might get around some of these obstacles — if the money was then used directly to fund the construction of transit routes that provide alternative travel options. These alternatives would be the Don Mills LRT, the Waterfront West LRT, and especially the Downtown<\/a> Relief<\/a> Line<\/a>, which would both\u00a0 continue the Don Mills LRT to downtown, and link Dundas West Station to downtown for commuters coming in from Etobicoke and places west. Clever people in the financial district could probably structure it so that the city got access to some capital right away, but the tolls didn’t kick in until some time later — giving enough time and money to at least get started on building the alternative transit routes before tolling began. As many municipal referendums in the US have shown, taxpayers are more willing to pay new user fees or taxes for a tangible asset than for general municipal operations.<\/p>\n

The highway 407 experience has shown there would have to be some kind of control over the toll rates, but that can be done with a good contract. Many private companies would be more than happy with the very predictable revenue stream they would get from the arrangement.<\/p>\n

I’m not a number cruncher, and numbers would need crunching to see how viable this option is and how much the city would get. And no doubt there are other complicating issues to consider — perhaps our readers can further parse some of the potential complications and benefits. But it might be worth investigating as a potentially more politically viable, and possibly financially viable, way of funding much-needed new transit lines in the city through road pricing.<\/p>\n

Note: I wrote this post before I saw today’s headline in the Toronto Star re. Smitherman and privatization, which seems to be more about contracting out services.<\/em><\/p>\n

Photo by dougtone<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

There was an interesting article in the Star recently (with a misleading headline) about how Chicago’s chief financial officer arranged leases on profitable city-owned infrastructure with private companies, and so raised billions of dollars of capital for the city. These assets included some parking garages, all the city’s parking meters, and the Chicago Skyway, aContinue reading “Could Toronto lease out the Gardiner and DVP?”<\/span><\/a><\/p>\n","protected":false},"author":4006,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ngg_post_thumbnail":0,"_ef_editorial_meta_paragraph_assignment":"","_ef_editorial_meta_date_first-draft-date":"","_ef_editorial_meta_checkbox_needs-photo":"","_ef_editorial_meta_number_word-count":"","footnotes":""},"categories":[13,50,2,9,8],"tags":[45,5576,62],"class_list":["post-9600","post","type-post","status-publish","format-standard","hentry","category-green-space","category-infrastructure","category-politics","category-traffic","category-transit","tag-funding-cities","tag-stanford","tag-sustainability"],"acf":[],"yoast_head":"\nCould Toronto lease out the Gardiner and DVP? - Spacing Toronto<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Could Toronto lease out the Gardiner and DVP? - Spacing Toronto\" \/>\n<meta property=\"og:description\" content=\"There was an interesting article in the Star recently (with a misleading headline) about how Chicago’s chief financial officer arranged leases on profitable city-owned infrastructure with private companies, and so raised billions of dollars of capital for the city. These assets included some parking garages, all the city’s parking meters, and the Chicago Skyway, aContinue reading "Could Toronto lease out the Gardiner and DVP?"\" \/>\n<meta property=\"og:url\" content=\"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/\" \/>\n<meta property=\"og:site_name\" content=\"Spacing Toronto\" \/>\n<meta property=\"article:published_time\" content=\"2010-03-03T14:30:49+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2013-01-21T20:17:10+00:00\" \/>\n<meta property=\"og:image\" content=\"http:\/\/farm3.static.flickr.com\/2617\/4118940495_dd9ba62280.jpg\" \/>\n<meta name=\"author\" content=\"Dylan Reid\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@Spacing\" \/>\n<meta name=\"twitter:site\" content=\"@Spacing\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Dylan Reid\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/\",\"url\":\"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/\",\"name\":\"Could Toronto lease out the Gardiner and DVP? - Spacing Toronto\",\"isPartOf\":{\"@id\":\"https:\/\/spacing.ca\/toronto\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/#primaryimage\"},\"thumbnailUrl\":\"http:\/\/farm3.static.flickr.com\/2617\/4118940495_dd9ba62280.jpg\",\"datePublished\":\"2010-03-03T14:30:49+00:00\",\"dateModified\":\"2013-01-21T20:17:10+00:00\",\"author\":{\"@id\":\"https:\/\/spacing.ca\/toronto\/#\/schema\/person\/5db677dc17e5329d01b88dfb319d259b\"},\"breadcrumb\":{\"@id\":\"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/#primaryimage\",\"url\":\"http:\/\/farm3.static.flickr.com\/2617\/4118940495_dd9ba62280.jpg\",\"contentUrl\":\"http:\/\/farm3.static.flickr.com\/2617\/4118940495_dd9ba62280.jpg\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/spacing.ca\/toronto\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Could Toronto lease out the Gardiner and DVP?\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/spacing.ca\/toronto\/#website\",\"url\":\"https:\/\/spacing.ca\/toronto\/\",\"name\":\"Spacing Toronto\",\"description\":\"Canadian Urbanism Uncovered | Toronto Architecture, Urban Design, Public Transit, City Hall, Parks, Walking, Bikes, Streetscape, History, Waterfront, Maps, Public Spaces\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/spacing.ca\/toronto\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/spacing.ca\/toronto\/#\/schema\/person\/5db677dc17e5329d01b88dfb319d259b\",\"name\":\"Dylan Reid\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/spacing.ca\/toronto\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/196165a3da8aa047d1d3816d24de1d3a?s=96&d=blank&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/196165a3da8aa047d1d3816d24de1d3a?s=96&d=blank&r=g\",\"caption\":\"Dylan Reid\"},\"description\":\"Dylan Reid is a senior editor at Spacing Magazine. He has also written articles for NOW magazine and the uTOpia books. He was co-chair of the Toronto Pedestrian Committee 2007-2010, was one of the founders of the Toronto Coalition (now Centre) for Active Transportation, and is a co-founder of Walk Toronto. Dylan is also a Fellow at the Centre for Reformation and Renaissance Studies at the University of Toronto.\",\"sameAs\":[\"http:\/\/www.spacing.ca\/\"],\"url\":\"https:\/\/spacing.ca\/toronto\/author\/dylan\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Could Toronto lease out the Gardiner and DVP? - Spacing Toronto","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/","og_locale":"en_US","og_type":"article","og_title":"Could Toronto lease out the Gardiner and DVP? - Spacing Toronto","og_description":"There was an interesting article in the Star recently (with a misleading headline) about how Chicago’s chief financial officer arranged leases on profitable city-owned infrastructure with private companies, and so raised billions of dollars of capital for the city. These assets included some parking garages, all the city’s parking meters, and the Chicago Skyway, aContinue reading \"Could Toronto lease out the Gardiner and DVP?\"","og_url":"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/","og_site_name":"Spacing Toronto","article_published_time":"2010-03-03T14:30:49+00:00","article_modified_time":"2013-01-21T20:17:10+00:00","og_image":[{"url":"http:\/\/farm3.static.flickr.com\/2617\/4118940495_dd9ba62280.jpg","type":"","width":"","height":""}],"author":"Dylan Reid","twitter_card":"summary_large_image","twitter_creator":"@Spacing","twitter_site":"@Spacing","twitter_misc":{"Written by":"Dylan Reid","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/","url":"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/","name":"Could Toronto lease out the Gardiner and DVP? - Spacing Toronto","isPartOf":{"@id":"https:\/\/spacing.ca\/toronto\/#website"},"primaryImageOfPage":{"@id":"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/#primaryimage"},"image":{"@id":"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/#primaryimage"},"thumbnailUrl":"http:\/\/farm3.static.flickr.com\/2617\/4118940495_dd9ba62280.jpg","datePublished":"2010-03-03T14:30:49+00:00","dateModified":"2013-01-21T20:17:10+00:00","author":{"@id":"https:\/\/spacing.ca\/toronto\/#\/schema\/person\/5db677dc17e5329d01b88dfb319d259b"},"breadcrumb":{"@id":"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/#primaryimage","url":"http:\/\/farm3.static.flickr.com\/2617\/4118940495_dd9ba62280.jpg","contentUrl":"http:\/\/farm3.static.flickr.com\/2617\/4118940495_dd9ba62280.jpg"},{"@type":"BreadcrumbList","@id":"https:\/\/spacing.ca\/toronto\/2010\/03\/03\/could-toronto-sell-leases-on-the-gardiner-and-dvp\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/spacing.ca\/toronto\/"},{"@type":"ListItem","position":2,"name":"Could Toronto lease out the Gardiner and DVP?"}]},{"@type":"WebSite","@id":"https:\/\/spacing.ca\/toronto\/#website","url":"https:\/\/spacing.ca\/toronto\/","name":"Spacing Toronto","description":"Canadian Urbanism Uncovered | Toronto Architecture, Urban Design, Public Transit, City Hall, Parks, Walking, Bikes, Streetscape, History, Waterfront, Maps, Public Spaces","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/spacing.ca\/toronto\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/spacing.ca\/toronto\/#\/schema\/person\/5db677dc17e5329d01b88dfb319d259b","name":"Dylan Reid","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/spacing.ca\/toronto\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/196165a3da8aa047d1d3816d24de1d3a?s=96&d=blank&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/196165a3da8aa047d1d3816d24de1d3a?s=96&d=blank&r=g","caption":"Dylan Reid"},"description":"Dylan Reid is a senior editor at Spacing Magazine. He has also written articles for NOW magazine and the uTOpia books. He was co-chair of the Toronto Pedestrian Committee 2007-2010, was one of the founders of the Toronto Coalition (now Centre) for Active Transportation, and is a co-founder of Walk Toronto. Dylan is also a Fellow at the Centre for Reformation and Renaissance Studies at the University of Toronto.","sameAs":["http:\/\/www.spacing.ca\/"],"url":"https:\/\/spacing.ca\/toronto\/author\/dylan\/"}]}},"_links":{"self":[{"href":"https:\/\/spacing.ca\/toronto\/wp-json\/wp\/v2\/posts\/9600","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/spacing.ca\/toronto\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/spacing.ca\/toronto\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/spacing.ca\/toronto\/wp-json\/wp\/v2\/users\/4006"}],"replies":[{"embeddable":true,"href":"https:\/\/spacing.ca\/toronto\/wp-json\/wp\/v2\/comments?post=9600"}],"version-history":[{"count":14,"href":"https:\/\/spacing.ca\/toronto\/wp-json\/wp\/v2\/posts\/9600\/revisions"}],"predecessor-version":[{"id":40034,"href":"https:\/\/spacing.ca\/toronto\/wp-json\/wp\/v2\/posts\/9600\/revisions\/40034"}],"wp:attachment":[{"href":"https:\/\/spacing.ca\/toronto\/wp-json\/wp\/v2\/media?parent=9600"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/spacing.ca\/toronto\/wp-json\/wp\/v2\/categories?post=9600"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/spacing.ca\/toronto\/wp-json\/wp\/v2\/tags?post=9600"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}