Real estate developer Cadillac Fairview Corp. Ltd. announced plans Friday to build a major new business district in Toronto on 38 acres of land it has purchased east of the downtown, saying the site will eventually include more than 10 million square feet of new office space.
The largely vacant parcel, which lies just east of the Don Valley Parkway and north of the Gardiner Expressway, is one of the largest undeveloped tracts in Toronto’s core. It was pitched last year as a potential site for Amazon.com Inc.’s second headquarters, but Amazon announced in November that it had chosen two U.S. locations instead.
Cadillac Fairview purchased the East Harbour site from developer First Gulf Corp. and its partners for an undisclosed sum.
Cadillac Fairview chief executive John Sullivan estimated there will be about 10 office buildings on the site by the time the project is completed over roughly 15 years.
The real estate developer, owned by the Ontario Teachers’ Pension Plan, is one of the few companies in Canada that would be a logical buyer for the site, Mr. Sullivan said, because it can finance such a large project.
In past decades, he said, Cadillac Fairview’s most profitable ventures have been its large mixed-use developments, including the Toronto Eaton Centre, the TD Centre in Toronto and the Pacific Centre in Vancouver.
“We have a certain expertise in developing projects of this scale,” he said in an interview.
“When you combine that with the fact that Toronto is booming in terms of office demand and absorption, and there’s very little land left in the core, we think this is a really opportune time to take on a project like this. And frankly, given its scale, there are very few others who can do it, which to some extent is a competitive advantage to us.”
Toronto is forecast to need 45 million square feet of additional office space by 2041 to accommodate an anticipated 300,000 more employees, Cadillac Fairview said.
In addition to a sea of new office buildings, the site will include retail space – but not a shopping mall – and may offer other amenities such as a hotel, Mr. Sullivan said.
The key to the site’s success will be a new transit hub, which is expected to contain a commuter Go Train station and eventually a streetcar stop and a new subway station if the proposed Ontario Line expansion is built. The land has little road access and is surrounded on most sides by industrial buildings and railway tracks, which means a new road network would also be necessary.
The largest building on the site is the former Unilever building, once a soap factory and now occasionally used as an event space or for film shoots. It will be the first piece to be redeveloped and will be expanded into a roughly 600,000-square-foot office building, Mr. Sullivan said.
He anticipates construction will start in the next two years, and the first workers will begin filling the site within five years.
The project will also benefit from major new housing and commercial developments under way or proposed on nearby streets. There are several new condominium towers going up just north of the site along Eastern Avenue, for example, and the proposed Sidewalk Labs neighbourhood known as Quayside could be built on 12 acres to the southwest of the area. Sidewalk Labs has proposed an even larger district in the area that could comprise as much as 190 acres of waterfront land.
“I think if it happens, it just adds value to our site,” Mr. Sullivan said of the proposal. “If it works out that the city agrees with what they’re thinking about, and they can make sense of it, we would welcome that.”
There is no housing planned for the East Harbour site because the land is not zoned for residential use. Some city-planning analysts have complained about plans for the new neighbourhood, saying it could become a dead zone on evenings and weekends when workers go home.
However, Mr. Sullivan said Cadillac Fairview would be open to considering residential buildings at East Harbour if the city’s flooding remediation work makes it possible.
“We’ve done lots of mixed-use developments where we have residential as part of it, and if it makes sense here and the city agrees with that, we would obviously consider it here as well," he said.
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