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Make Your Value Visible
December 9, 2014
As a candidate for Toronto mayor, John Tory appealed to voters with an ambitious transit plan promising congestion relief in seven years without new city taxes or debt.
As mayor, Mr. Tory now has to deliver on a promise that assumes increased property tax revenue from new real estate development to generate the needed revenue to expand transit service. To get there, Tory needs his SmartTrack plan to become the most powerful tool for urban intensification ever wielded in the region.
SmartTrack was brilliantly marketed as a plan to deliver new rapid rail service to Toronto by convincing the Ontario government to prioritize the electrification of two portions of the current GO Train network. To achieve this, Toronto’s new mayor is offering significant city contributions to the cost of these projects by maximizing the development tax dollars that flow from enhanced transit service.
That’s a tall order. Mr. Tory would have to change the culture of planning and development at City Hall that is characterized by its ward councillor fiefdoms. Impossible? Not necessarily. As Toronto’s builder-in-chief, he could mobilize city planning and other powers to strengthen the link between transit and development. He needs to overcome natural NIMBY tendencies of neighbouring communities by demonstrating the local and regional benefits of enhanced transit service. What’s in it for them? Better parks? Libraries? They will need to be convinced.
If properly implemented, SmartTrack plan hands the province a tool to achieve urban intensification across the Toronto region that is far more powerful than the government’s Regional Growth Plan now under a 10-year review. Tory will need to prove how the city intends to maximize the property tax returns on the public investments it seeks from the province.
By extension Ontario Premier Kathleen Wynne would be in a good position to expect similar value for money proposals from other regional municipalities. Plans are great at setting targets, but municipal performance contracts can demand results. SmartTrack could serve as a model to link transit expansion and urban intensification. Local municipalities and their developer partners would vie for provincial infrastructure dollars with their best market backed plans for urban intensification.
Such a strategy by the province would require a positive change in thinking by municipalities. Toronto region municipalities would need to become market and business savvy negotiators who can skillfully maximize the “land value capture” opportunity associated with public infrastructure investments. Municipal officials would need to find development partners willing to contribute to the upfront cost of delivering public infrastructure investments, such as a new transit station.
Impossible? Not at all. The City of London funded much of its Jubilee line to the Canary Wharf and its regional Crossrail line, now under construction, by getting benefiting private landowners to co-invest in public infrastructure.
Similar opportunities are ready to be seized in Toronto. Consider the 30 acre property (formerly the Lever Brothers soap factory) now owned by First Gulf Corporation. The site is at the eastern foot of the Don Valley Parkway and sits directly beside two existing GO train lines (including one of the lines proposed to host SmartTrack). Dubbed as Canada’s Canary Wharf, this is an exciting urban intensification opportunity for the emergence of a downtown east commercial business district.
But for this plan to work, higher order public transit service is critical. Motivated by this fact, First Gulf is in discussions with Metrolinx and other government stakeholders regarding non-tax sources of funding for a transit station adjacent to its site, including private sector contributions. It needs the station to make the most of its major investment.
Drawing a strong link between transit and new development doesn’t just happen. The willingness of a developer or land owner to voluntarily contribute to public infrastructure, such as a new station, is highest before a project is announced. Upfront commitments will be harder to achieve after the announcement of a new transit station. For example, voluntary contributions may be hard to generate from landowners close to the already-announced Vaughan subway station or Eglinton Crosstown.
While there are plenty of questions that Mr. Tory still has to answer about SmartTrack – the details of the plan remain largely unknown – the core idea of closely linking transit investment and real estate development has the potential to unlock new building opportunities that would benefit Toronto region municipalities, the province, developers and taxpayers.
In doing so, Toronto has a chance to be a leader in setting priorities for public infrastructure investments tied to urban intensification instead of sprawl.
Richard Joy is the Executive Director for the Urban Land Institute (ULI) Toronto.
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