The Corus building sits at the foot of Sherbourne Street along the Toronto waterfront, one of the first projects completed under the waterfront revitalization program.Sarah Dea/The Globe and Mail
The founder of a giant Texas development conglomerate that secured an $800-million deal with Waterfront Toronto to build a 2-million-sq.-ft. mixed-use complex on the East Bayfront says the Ford administration's threat to pull out of the revitalization effort would "shake our confidence" in the project.
"Who would be the entity we would deal with?" said Gerald Hines, who set up his privately held real estate firm in 1957. The Hines company now has properties in over 100 cities around the world, and controls $22.9-billion in real estate assets.
Mr. Hines, 85, was responding to disparaging comments made this week by Mayor Rob Ford and his brother Doug, who dismissed efforts to redevelop the waterfront as "a boondoggle" and a waste of money. The mayor said Friday the city's contribution to waterfront revitalization was under review.
But in an interview Friday from his office in Houston, Mr. Hines lauded the Waterfront Toronto agency as "an ethical and professional group" that has created incentives that attract international investors with deep pockets. "We have confidence that they'll execute their part of the agreement."
There's little doubt the agency reeled in a big fish when it finalized an agreement with Hines last summer. The firm has developed projects in cities like Paris, Milan and Barcelona, where it worked with local and state governments on a massive waterfront redevelopment complex involving 1,500 high-rise apartment units, three hotels, and a convention centre.
"Everyone in Barcelona said it would never work, but we now have the highest prices in [the city]" Mr. Hines said, adding that the chance to remake Toronto's waterfront presented a similar opportunity.
He's not the only major figure in the development industry to look askance at signals coming out of the mayor's office.
"If Waterfront Toronto was less effective, people will have to ask the question, where's the government's commitment?" says Andrew Barnicke, senior vice-president of DTZ Barnicke Ltd., the firm that negotiated the deal which saw Corus Entertainment move into the first new office complex built on the waterfront in over a generation.
Waterfront Toronto, Mr. Barnicke said, has succeeded in attracting capital investment to the area east of Yonge and dismissed suggestions that the agency has little to show for the $750-million it has spent to date. "Probably the most difficult thing in doing new district development is getting the planning right and doing the infrastructure. Building the buildings isn't so difficult."
Since 2008, the agency, which is jointly owned by all three levels of government, has approved three major development deals worth $1.3-billion. The Corus building opened last year, and construction on the new waterfront campus for George Brown College, a $175-million venture, is under way. Infrastructure Ontario is in the process of tendering a $700-million development deal to build 8,000-10,000 units of housing in the West Donlands for the Pan Am Games athletes' village.
While Mr. Ford dismissed the waterfront as a pet project of former mayor David Miller, the agency itself dates back to the Mike Harris era and the city's unsuccessful bid for the 2008 Olympics under Mel Lastman. The three levels at the time each pledged $500-million for the revitalization effort.
Conservative finance minister Jim Flaherty is currently responsible for Ottawa's contribution. Federal officials have signed off on the agency's procurement rules. A spokesperson for Ontario infrastructure minister Bob Chiarelli said in an e-mail that the province "has no intentions of pulling out from Waterfront Toronto."
According to the agency's figures, almost half of the funding provided since 2001 has come from the federal government, while Queen's Park has anted up $240-million and the city just $162-million.
During the coming nine years, the city has earmarked $193-million in capital spending on waterfront projects, including an LRT and new public spaces. Budget documents show the city anticipates an additional $106-million in operating expenses associated with waterfront redevelopment. But waterfront officials estimate that land development will increase property values in the East Bayfront and West Donlands by almost $10-billion, generating an estimated $136-million in additional annual property taxes.
Special to The Globe and Mail