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A jogger makes her way past signs informing people of various locations along Stanley Park's seawall in Vancouver, British Columbia, Wednesday, July 11, 2012.Rafal Gerszak/The Globe and Mail

At the turn of the 20th century, almost 70 per cent of the English Bay waterfront between Stanley Park and Burrard Street was in private hands. In 1911, the city began acquiring waterfront land, helping to establish a city treasure that was accessible to all.

The Vancouver seawall has become one of the city's most popular attractions: 26 kilometres of uninterrupted walkway stretching from Canada Place to Kits Beach. But a 2.5-kilometre gap between Kits Beach and Jericho Beach remains, and completing it may depend on the kind of monied interests the city once bought out.

A mysterious private donor has been talking to Mayor Gregor Robertson about a multimillion-dollar donation for the west-side project. While it seems like a good deal – a philanthropist paying for public infrastructure the city cannot afford – questions are being raised about whether the city should turn to the private sector for funds and, if it does, how to manage the process.

Larry Frank, an urban planning professor at the University of British Columbia, says government has to make sure rich donors can't buy anything that's not in the public interest.

"If someone said they wanted to donate $100-million to make the Granville Highway, you would check and see it was not in the city plan, and it would not be acceptable," he said.

Ongoing operating costs are also an issue. A donation may finance the seawall or some other public infrastructure, but the city could end up maintaining it for years to come.

Universities and hospitals, which benefit from generous philanthropy to help build libraries and cancer wards, are mindful of this issue; they tend not to build structures for which they have no operations budget.

At the University of British Columbia, for example, philanthropic gifts account for about 16 per cent – $189-million – of the $1.2-billion in ongoing planned construction. "There's some perception out there that donors come in and say, `I want to build this.' It doesn't work like that," says Richard Fisher, chief spokesman for UBC Development Alumni Engagement. "Typically, the project is under way and we've got most of the funding from various places – government and granting agencies and such – and the donor piece is kind of the last part you put in."

When an anonymous couple recently committed $30-million for Taylor Manor, a vintage Vancouver historic property, they agreed to cover operational costs to make sure their vision of a supportive environment for about 60 residents was upheld.

That is very rare. UBC's Mr. Fisher, for example, noted that philanthropists, in his experience, have little interest in operations, and are more passionate about legacy and the research that would go on in the building they are supporting.

In the case of Taylor Manor, Vision councillor Kerry Jang – who got a cold call from the couple – said he was struck by their level of commitment. "There are some wealthy philanthropists out there who have been putting money into buildings, which is great, but this is the first time I have seen money for operations," he says.

Fellow councillor George Affleck of the Non-Partisan Association said he is concerned about the city being on the hook for the budget of the seawall expansion should the donation fall short of the actual budget. He also worries about concealing the names of the donors and whether they are associated with Mayor Robertson's Vision Vancouver party. Mr. Affleck argues that, at the very least, the names of the donors should be disclosed to council in camera.

Raymond Louie, a Vision councillor speaking for Mr. Robertson, says the discussion about the seawall donation is in "the early stages" after an expression of interest by the donor. "It's up in the air in terms of how much the donation might be," he said.

He noted that council this year passed a motion setting up a $2-million effort to leverage money for city projects from various parties, including philanthropists as well as other levels of government, non-profit agencies, and the private sector.

"We, as a council, look for ways to attract external funding rather than ways of relying upon the taxpayer. We want to attract donations to our city to build a better city," Mr. Louie said.