Despite the housing bust in the United States, and bad jitters about Europe in markets everywhere, Toronto's long-running residential real-estate boom just rolls on and on. As Hogtown developers and investors thrive, however, the city finds itself bleeding red ink from every pore. So why shouldn't our local government jump into the condo game and try to make some money?
Before I propose a couple of reasons why it shouldn't, a glance is in order back to last week, when Torontonians got their first real chance to see what becoming a public-sector speculator in the high-rolling housing market looks like.
Build Toronto, the public agency charged with unloading municipal property, and construction behemoth Tridel announced that they had joined forces to put up a $295-million, 75-storey condominium tower on an awkward site south of Union Station. Fans of the partnership hailed it as a sure-fire money maker at a time when Toronto sorely needs the cash.
On paper, the deal seems good. By selling about 80 per cent of the $5-million property to Tridel, then keeping the rest as an investment, Build Toronto stands to reap an estimated dividend of more than $40-million over the next four years.
How the money will be spent, and how much of the total will actually be passed on by the crown corporation, are still unanswered questions. (According to published reports, Build Toronto gave the city only $11-million last year on revenues of $21.8-million.)
But for the sake of argument, let's say Toronto gets the whole $40-million and council pours it all into deficit reduction. That sounds like a lot of money – until one factors in the gaping hole in the municipal budget that this dollop is supposed to help plug: about $770-million in 2012 alone.
In addition to doing very little to cure what ails this city, the Build Toronto-Tridel arrangement sends out messages that are, or should be, repugnant to every citizen.
It says any piece of our public realm that can't be made to pay its way financially – whatever its cultural, recreational, historical or aesthetic value – may be put on the auction block, even if the proceeds from the sale are relatively small. Granted, the tiny plot sold to Tridel has no worth of a higher kind. But how sure can we be that Build Toronto really understands the difference between a dispensable muddy patch of public property tucked in among expressway ramps and a park? What part of our common inheritance from the past would they definitely not sell? We need to know.
The deal, which was unveiled with much razzle-dazzle, also proclaims that Toronto is now in the business of investing in the schemes of huge residential developers. And never mind that this enthusiasm exposes the city, which already has enough fiscal headaches, to the slide that will surely come, sooner or later, in the local condo market. If we're lucky, this softening won't happen in the next four years. But does Toronto really need to tempt fate at this point?
Now that I have poured all the cold water at my disposal on Build Toronto's plans, it's time to take a gander at what the people at Tridel intend to do with the place they've bought from us.
The very tall building is being designed by Toronto architect Rudy Wallman. If renderings are to be believed, the shiny, boxy modernist tower will look a little different from its high-rise neighbours on the landfill south of the railway tracks. Vertical panels several storeys tall, composed of angled glass to give them sparkle and extruded (like large bay windows) from the central volume of the building, will be scattered in random patterns across each façade.
The biggest design challenge, the architect told me last week, is what to do with the bottom. The ground, shaped like a pie slice, is hemmed in tightly on all sides by streets and the Gardiner Expressway. To make life at grade as tolerable as possible, Mr. Wallman (working with landscape architect Janet Rosenberg) will provide ample sidewalks around the triangular podium.
The residential component of the tower has to be boosted above the traffic deck of the Gardiner, so Mr. Wallman will fill the podium with parking spots for residents in the 780 units, and a full floor devoted to fitness rooms, guest suites, an indoor pool and other amenities.
This building is located in one of the most aesthetically tough spots in downtown Toronto. But there aren't a lot of lovely inner-city places left where developers can throw up towers – unless, of course, Build Toronto decides to sell off Nathan Phillips Square.