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ADRM

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Yeah, baited breath re: developer. I wonder on what the sale will be contingent, and if they'll announce that a portion of the proceeds must be dedicated to funding waterfront transit...
 

TOareaFan

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Yeah, baited breath re: developer. I wonder on what the sale will be contingent, and if they'll announce that a portion of the proceeds must be dedicated to funding waterfront transit...
why would it be dedicated to transit in a specific area? All other sales, privatizations have seen money going to the trillium trust for transit/infrastructure investments but not specific to location.
 

ADRM

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To be clear, I'm musing, not projecting, but it wouldn't surprise me if that's the case. The developers of the new developments along this stretch of the waterfront have made it very clear that they're basing part of their investments on the premise that waterfront transit will be built in semi-decent order.

The province is of course looking to get top dollar for these lands and, in return for what may be a record price for the city, so I can certainly see the prospective buyer seeking a guarantee (given the magnitude of the investment) that the promise of waterfront transit is actually made good on. That would certainly be something I bargained for if I were in their position—that's not to say they'll get what they want, but I'll be interested to see if they do.
 

TOareaFan

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To be clear, I'm musing, not projecting, but it wouldn't surprise me if that's the case. The developers of the new developments along this stretch of the waterfront have made it very clear that they're basing part of their investments on the premise that waterfront transit will be built in semi-decent order.

The province is of course looking to get top dollar for these lands and, in return for what may be a record price for the city, so I can certainly see the prospective buyer seeking a guarantee (given the magnitude of the investment) that the promise of waterfront transit is actually made good on. That would certainly be something I bargained for if I were in their position—that's not to say they'll get what they want, but I'll be interested to see if they do.
Given the choice of driving the price down....or paying over the odds for some promise of transit....I know what the developers I know would do.
 

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Given the choice of driving the price down....or paying over the odds for some promise of transit....I know what the developers I know would do.
On the other hand, having an LRT running past their development will increase their property values and/or ROI.
 

ADRM

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On the other hand, having an LRT running past their development will increase their property values and/or ROI.
Exactly—at the end of the day, low costs aren't a zero sum game for developers; they care most, understandably, about profit. If a developer somehow manages to keep land acquisition and construction costs comparatively low but then can't sell it, then she or he wouldn't be very happy. There's loads of data that point to a positive correlation between proximity to transit and increased property values, so it makes sense that that'd be a potential revenue driver (vis a vis the ability to charge a higher price) that developers would want access to.

I could absolutely envision a scenario in which a developer, or even a group of developers bidding on this particular parcel of land, seek a guarantee from the province that some of the proceeds are dedicated to waterfront transit. That'd also act as a hedge of sorts in terms of developers potentially having little faith in Council to deliver the necessary planning, approval, and funding required to get transit built.
 

TOareaFan

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^so you envisage a scenario where developer A says to vendor P(rovince) I will pay you $X for this site but you have to guarantee that third party C(ity) will build transit at the door and to facilitate that you will devote part of the funds towards whatever C builds?
 

ADRM

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I sense skepticism, vis a vis the strong language ("at the doorstep"), but the intent is correct, and it's certainly not without precedent.

A similar principle, in a way, forms the basis for section 37 fund allocation: Developers agree to pay an amount for land in return for the right to develop it, and are obligated to contribute a predetermined monetary amount to a fund whose proceeds have a defined usage.
 

TOareaFan

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I sense skepticism, vis a vis the strong language ("at the doorstep"), but the intent is correct, and it's certainly not without precedent.

A similar principle, in a way, forms the basis for section 37 fund allocation: Developers agree to pay an amount for land in return for the right to develop it, and are obligated to contribute a predetermined monetary amount to a fund whose proceeds have a defined usage.
I am skeptical that a developer would overpay for land on the promise of future transit....they would more likely value it "as is" at X and pay that knowing that there may be a value bump in the future if transit arrives....the potential of transit may move what X is...but not by much. What will really move value here is what (and how much of it) they can build.

Your section 37 analogy is very imperfect. because a) section 37 applies to all properties and is a known entity and b) the amount of negotiation around 37 is between two parties...the city and the developer....this notion that someone would pay more to the province on the basis that the city will build transit and that the province will apportion some of the purchase price directly to whatever the city builds is what I question.

Also, if you are going to quote me and accuse me of using "strong language" at least try and quote me directly ;)
 

DSC

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I sense skepticism, vis a vis the strong language ("at the doorstep"), but the intent is correct, and it's certainly not without precedent.

A similar principle, in a way, forms the basis for section 37 fund allocation: Developers agree to pay an amount for land in return for the right to develop it, and are obligated to contribute a predetermined monetary amount to a fund whose proceeds have a defined usage.
This is not quite correct; the price of the land is nothing to do with s 37 money, it's triggered by allowing additional height or density over and above that stated in the official Plan etc. . The Planning Act reads, in part:
"37. (1) The council of a local municipality may, in a by-law passed under section 34, authorize increases in the height and density of development otherwise permitted by the by-law that will be permitted in return for the provision of such facilities, services or matters as are set out in the by-law."
 

TOareaFan

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This is not quite correct; the price of the land is nothing to do with s 37 money, it's triggered by allowing additional height or density over and above that stated in the official Plan etc. . The Planning Act reads, in part:
"37. (1) The council of a local municipality may, in a by-law passed under section 34, authorize increases in the height and density of development otherwise permitted by the by-law that will be permitted in return for the provision of such facilities, services or matters as are set out in the by-law."
sure, but there is an indirect impact on the value of the land....developers really break land down to price per buildable foot.....so if they think/project that by paying X in terms of 37 they can get a few more floors of buildable space they will vary the price they pay for the land.
 

ADRM

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This is not quite correct; the price of the land is nothing to do with s 37 money, it's triggered by allowing additional height or density over and above that stated in the official Plan etc. . The Planning Act reads, in part:
"37. (1) The council of a local municipality may, in a by-law passed under section 34, authorize increases in the height and density of development otherwise permitted by the by-law that will be permitted in return for the provision of such facilities, services or matters as are set out in the by-law."
1. I never (intentionally) intimated that a developer would need or want to "overpay" for lands; my point was that they might seek a guarantee in some form that transit will be built in the future as a contingency of the agreement.
2. Perhaps the usage of s.37 was confusing—the point there was simply to illustrate that there is precedent for sale agreements that have other contingencies. I concede it wasn't the best example to use, but I'm not debating the manners on which that principle operates. There is plenty of precedent both in contract law and in the city development process to have contingencies tied to agreements.
 

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1. I never (intentionally) intimated that a developer would need or want to "overpay" for lands; my point was that they might seek a guarantee in some form that transit will be built in the future as a contingency of the agreement.
2. Perhaps the usage of s.37 was confusing—the point there was simply to illustrate that there is precedent for sale agreements that have other contingencies. I concede it wasn't the best example to use, but I'm not debating the manners on which that principle operates. There is plenty of precedent both in contract law and in the city development process to have contingencies tied to agreements.
Yes, but if you look back at the agreements the City made with the developers further east on QQ (GBC, Corus, Hines etc) several of these were contingent in the City and/or WT build LRT on QQ by xxxx. Since the LRT is not yet built these agreements are clearly not worth too much! For example: ":
"Waterfront Toronto Obligations WT is required to use reasonable commercial efforts to ensure that sufficient public transit capacity (ie buses) is available to Bayside by July, 2013 and that Light Rail Transit (LRT) is operational by the end of 2018. Otherwise, WT is obliged to waive the requirement of Hines of developing the office parcels at C1 and C2 in advance of the balance of the residential buildings."


See: http://www.toronto.ca/legdocs/mmis/2010/ex/bgrd/backgroundfile-33052.pdf
 

ADRM

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Yes, but if you look back at the agreements the City made with the developers further east on QQ (GBC, Corus, Hines etc) several of these were contingent in the City and/or WT build LRT on QQ by xxxx. Since the LRT is not yet built these agreements are clearly not worth too much! For example: ":
"Waterfront Toronto Obligations WT is required to use reasonable commercial efforts to ensure that sufficient public transit capacity (ie buses) is available to Bayside by July, 2013 and that Light Rail Transit (LRT) is operational by the end of 2018. Otherwise, WT is obliged to waive the requirement of Hines of developing the office parcels at C1 and C2 in advance of the balance of the residential buildings."


See: http://www.toronto.ca/legdocs/mmis/2010/ex/bgrd/backgroundfile-33052.pdf
Yeah, I totally hear you—which is why I'll be interested to see how/if that plays out on this go around!
 

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