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A rendering of Oxford Properties' plan for the redevelopment of the Metro Toronto Convention Centre.

The battle over where to place a Toronto casino is intensifying with a group of developers arguing a gambling complex in the city's core will jeopardize "the success of our downtown."

In a letter to the city manager, three real-estate firms register their opposition to a "mega-style casino" downtown, one being RioCan Real Estate Investment Trust, which happens to have the chair of the provincial gaming agency, Paul Godfrey, as the head of its board. Their comments come as city councillors gear up to decide this spring if Toronto should have a new casino and if so, where. Several large casino operators are pitching the economic benefits of a gaming emporium in the form of jobs and new development, while citizens groups rally in opposition.

"In our view, the risk of the potential negative impacts from developing a mega casino in the Downtown outweighs the potential benefits," states the letter from RioCan, Allied Properties and Diamond Corp. The three firms are partners in a joint venture to develop a site at Front Street and Spadina Avenue where The Globe and Mail is now located.

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Ed Sonshine, the CEO of RioCan, said the partners are most concerned about plans by Oxford Properties to revitalize the Metro Convention Centre with a casino resort just down the street from where they are planning to develop a parcel of land that could be as large as eight acres, depending on the results of an outstanding land deal.

"It's a bad idea because of traffic, because of infrastructure, because of all kinds of reasons," Mr. Sonshine said. "Certainly we have no problem if the city decides to put a casino somewhere else. We just think it would be a disaster there on Front Street – We are not taking a position on a casino. We are taking a position on a casino in the core."

The city has just completed public consultations on three possible downtown sites – the convention centre, Exhibition Place and the Port Lands. The city could also be home to a second casino on the grounds of the Woodbine Racetrack in north Etobicoke.

The owners of the racetrack, Woodbine Entertainment Group, also confirmed Tuesday that a billion-dollar development deal to build a retail and entertainment complex on that site has died.

Woodbine Live – a project cited by Rob Ford in his race for mayor as evidence of his business savvy – was supposed to bring up to 9,000 jobs to North Etobicoke. A spokeswoman for the racetrack said with the deal between Woodbine and Baltimore-based The Cordish Cos. now over, talks are possible with potential casino partners for an integrated development on the massive 680-acre site.

"We are free to have a new development partner to move this forward," said Woodbine spokeswoman Jane Holmes. "We have our options open."

A casino report from the city manager is expected to go to the mayor's executive committee in March with city council debating the issue in April. The province has said it will not force a casino on a community that does not want one.

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Mr. Sonshine said he contacted Mr. Godfrey about the letter to the city on Monday "as a courtesy," but said it is not an issue for the board. "He is chair of RioCan, but this is a management decision," he said. "I do what is best for RioCan."

Mr. Sonshine said if a deal to secure the parcel of land at the corner is completed, the three developers will have about a $170-million investment in most of the block west of Spadina and north of Front. "We have to do what is right for that investment and Paul totally understands that," he said.

Adam Vaughan, the councillor who represents the area and a casino opponent, said he expects developers with sites near the other proposed downtown locations will come forward with similar concerns.

Even so, he predicts pressure will mount to accept a casino. "There is big money and interests from offshore that are still going to try and have their way," he said.

Councillor Doug Ford expressed surprised that any business would be against a casino development. "I have yet to meet one businessperson who has a concern," he said Tuesday. "I have yet to meet a developer that is not 100-per-cent behind casinos."

Mr. Ford said he and his brother the mayor support a casino, but would like to see the money it generates for the city go to transit. "And not streetcars – subways," he added.

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In the case of Woodbine Live, the development was in line to get tax breaks from the city provided the first phase of building was completed by October, 2014. Although the "Live" label belongs to Cordish, Ms. Holms said Woodbine holds the rights to the plan. City staff said it would be "extremely challenging" to meet that deadline with work not yet started on the site.

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