Invest Toronto & Build Toronto

[Glen]

hmm the idea sounds great, but the attempted luring of Procter and Gamble scares me ... a lot in fact.

What's the idea here? To spread employment across the 416? Moving one company to another location from an already employment zoned (and a pretty good one at that) to another seems like a mistake in the long term.

Why are they not focusing on luring companies that are currently not in Toronto? If they need to expand, and that can't be done at their current site, that's another story.

This is just like the Corus building. Moving jobs from one area of the city to another, to declare something a success. The real question is why is the city acting as a developer? If this is a viable project, sell the land and have a private company develop it.

More likely, this is the only way to ensure that something other than more condos get built. On top of that, what it adds to the non residential assessment base (more than likely) will be offset by diluting the existing values. What matters is an increase in demand, not sq footage.

 

[taal]

Right, I was wondering that as well ... why not just sell it directly verse developing it directly.

 

[borgo100]

154 Front St. E. at Sherbourne St....... Can you say perfect site for cities next tallest?

 

[Automation Gallery]

154 Front St. E. at Sherbourne St....... Can you say perfect site for cities next tallest?

Hey i been called every name in the book for dreaming up 1000 footers on this forum..... but Front and Sherbourne forget it.

 

[voxpopulicosmicum]

The real question is why is the city acting as a developer? If this is a viable project, sell the land and have a private company develop it.

More likely, this is the only way to ensure that something other than more condos get built. On top of that, what it adds to the non residential assessment base (more than likely) will be offset by diluting the existing values. What matters is an increase in demand, not sq footage.

Right, I was wondering that as well ... why not just sell it directly verse developing it directly.

I work in the development industry for a private developer, so this is somewhat against my interest to say, but why do think a private developer would be better than a public agency? Private developers are very, very capable of (some would say "programmed for") short-sightedness, bad taste, and -- more than anything -- being so greedy that all else suffers except their immediate bottom line.

Government agencies, for all of their bureaucracy, are at least notionally accountable and have a mandate to develop for quality and the public good.

 

[Glen]

I work in the development industry for a private developer, so this is somewhat against my interest to say, but why do think a private developer would be better than a public agency? Private developers are very, very capable of (some would say "programmed for") short-sightedness, bad taste, and -- more than anything -- being so greedy that all else suffers except their immediate bottom line.

Government agencies, for all of their bureaucracy, are at least notionally accountable and have a mandate to develop for quality and the public good.

Of course when profit maximization is the goal the outcomes will be different. By means of not being constrained by the profit motive we should be able to expect more from governments when they are the developers. The unfortunate reality is that if one was to look at the Corus Building, the proposed port lands arena, St. Clair LRT, Bloor St., the homeless shelter, etc., we get the worst outcome when the Toronto acts as developer. Uninspiring and over budget.

My other point regarding the city acting as developer is that it is to ensure that what actually gets developed is predominantly non residential. Based on the simple truth that the NPV of such are nearly always negative in Toronto due to the tax rates. If the city was to simply sell off these lands, without a doubt, what would be developed would be residential.

 

[taal]

Okay, then what's the harm? If the city is the only one who's going to build an office building, let them ... leasing the building and building it are two completely different animals.

We all acknowledge there's a serious issue in the city in terms of office development, and this is clearly not an answer. But, in the meantime, why not build it and then lease it out?

 

[Glen]

Okay, then what's the harm? If the city is the only one who's going to build an office building, let them ... leasing the building and building it are two completely different animals.

We all acknowledge there's a serious issue in the city in terms of office development, and this is clearly not an answer. But, in the meantime, why not build it and then lease it out?

From the city's vantage, it is a win, provided they can build cost competitively. The will have an increase in tax revenue that far exceeds the cost to service them. For the private owners of existing offices this may have a downward pressure on their rents and therefore market value. If this does occur the incidence of lower rents will be reflected in lower assessment values which would reduce the tax revenue that these properties generate. In other words, if the aggregate demand does not increase in proportion to the added space the net tax generated will be neutral or negative from the class as a whole. The only guaranteed upside is that the lands will not convert to residential, which will always produce negative returns on taxes vs. expenditures basis.

 

[taal]

From the city's vantage, it is a win, provided they can build cost competitively. The will have an increase in tax revenue that far exceeds the cost to service them. For the private owners of existing offices this may have a downward pressure on their rents and therefore market value. If this does occur the incidence of lower rents will be reflected in lower assessment values which would reduce the tax revenue that these properties generate. In other words, if the aggregate demand does not increase in proportion to the added space the net tax generated will be neutral or negative from the class as a whole. The only guaranteed upside is that the lands will not convert to residential, which will always produce negative returns on taxes vs. expenditures basis.

To see this downward pressure in rent will really only result if they only mange to lease the space to companies already existing in Toronto and with no plans to expand i.e. just shifting employment from one area to another... I doubt we'll see much of this (unless there are many incentives) so for this to occur will require the city to not find any tenants to lease ... which is possible.

Also, the rent may be higher in the locations the city is building in comparison to where some companies may be moving from (again, without incentives, one may argue this will likely imply no one will move) so that doesn't imply market value will drop.