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The Sheppard subway line's Don Mills Station. (Fred Lum/Fred Lum/The Globe and Mail)
The Sheppard subway line's Don Mills Station. (Fred Lum/Fred Lum/The Globe and Mail)

What it will take to make subway plan a reality Add to ...



The City

Mr. Ford's subway turns on attracting high-density development. Sheppard is a mix of malls, apartments and single-family homes. City officials would have to conduct studies and hold public meetings to solicit feedback on sharply increasing density and height limits.

Even if the new rules survive scrutiny by dozens of Scarborough neighbourhoods and win council approval, such sweeping zone changes will almost certainly be appealed to the Ontario Municipal Board.

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Despite the hurdles, builders have gravitated to Sheppard between Yonge and Leslie. Sixteen projects have been completed since 2003 and another 10, comprising 2,200 units, are under way, says Ben Myers, executive vice-president of Urbanation, a market research firm. "People buying these condos are taking the subway somewhere else to work."

Not so, says Councillor John Filion, whose ward includes many of the new towers along Sheppard. Gridlock in the area is so severe he convinced council to pass a motion forcing developers to warn buyers. "Traffic is the number one, number two and number three biggest issue in the ward."

Regardless of whether the anticipated condo dwellers plan to drive or commute, the reality is that demand is finite - about 16,000 new condo units sell in the City of Toronto each year. As one planner notes, the high-density cluster in North York city centre has been 25 years in the making.

The Province

The mayor's office estimates the price tag at $13-billion for the Sheppard subway extension, the Eglinton LRT and an SRT replacement, a little under $5-billion of which would be raised through a private-financing deal paid for by tax-increment financing (TIFs) and development levies.

Mr. Ford's scheme will only attract private consortiums if the city can deploy special financing measures to generate those additional revenues. But council can't move unless Queen's Park updates the laws governing such tools, development lawyer Jeff Davies says. The province needs to loosen restrictions on the use of development charges, although it will fall to council to hike the rates, a move that likely would be opposed by developers. The current development charges by-law doesn't expire for two years.

TIFs, in turn, allow municipalities to borrow to build infrastructure and then pay down the debt with increased tax revenues generated by redevelopment. Ontario's TIF rules, which can only be used with provincial approval, should also be bulked up, Mr. Davies says.

Even if the premier's office supports such changes, Queen's Park would be pressed to pass them all before the Oct. 6 election.

"It takes a lot of regulatory change, all of which I suspect this [provincial]government would be reluctant to start until after the election's over," said former budget chief Shelley Carroll, a long-time Liberal whose ward would host the Sheppard subway extension from its current terminus at Don Mills station to Victoria Park Road.

TTC

Besides the usual environmental and engineering studies, the TTC will have to conduct a closely managed and unprecedented bidding process.

It will have to market the project widely, pre-qualify prospective investors and negotiate the financial terms for a request for proposals. The bidders would likely include deep-pocketed financiers, such as pension funds, or design and engineering companies, as well as firms that specialize in financing such schemes.

Mark Towhey, the mayor's interim chief of staff, says plenty of private companies would jump at the chance to design, build, finance - and possibly maintain - a city-owned Sheppard subway extension.

"I think there's a lot of interest from the private sector for this type of deal, globally. I think there's been a lack of these types of deals at a significant scale in Canada generally," he said.

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