Rob Ford floats private funding plan for Sheppard subway

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In what amounts to the biggest risk of his young mayoralty, Rob Ford is proposing to extend Toronto's Sheppard subway with a private financing deal that would be a Canadian first.

The mayor's office has presented a plan to the transportation authority Metrolinx to have a private consortium design, build and ideally, maintain, the city-owned extension.

This would free up most of the $8.15-billion the province pledged to Toronto transit for an underground light-rail line on Eglinton Avenue and a replacement for the aging Scarborough Rapid Transit line.

"In order to do what the mayor wants to do, we've agreed that the city will find those [extra]resources," said Mark Towhey, Mr. Ford's interim chief of staff. "We've also decided that we're not going to charge the taxpayer for those. … The solution that we've worked through at this point is essentially a private financing initiative."

Estimated at approximately $13-billion, the overall proposal is far from a done deal.

Toronto's pro-subway mayor, the Toronto Transit Commission and Metrolinx are still trying to craft a successor to Transit City, the light-rail network plan that Mr. Ford declared "over" the day he took office.

But even if all the players agree, the mayor would need the approval of city council, where opponents are already deriding the financing model as a massive risk that would work only if skyscrapers are erected along Sheppard Avenue.

"We're not exaggerating: It's going to take a long time, it's going to take a lot of tall buildings and it's going to radically change quiet, stable neighbourhoods," said Shelley Carroll, the former budget chief.

Ms. Carroll was adamant the plan go to council. TTC chair Karen Stintz said that's "absolutely" the intention.

In a Tuesday meeting at the mayor's office that included Mr. Towhey, Councillor Doug Ford, and Ms. Stintz, among others, the mayor's staff presented the financing proposal to Metrolinx officials, who are still analyzing it for their provincial bosses.

Transportation Minister Kathleen Wynne suggested the plan could satisfy the province's wishes - namely, that Queen's Park not dole out a cent more than $8.15-billion, that the Eglinton line be a priority, and that work begin as rapidly as possible.

"The city has got to find the extra funding," she said. "If they want to look at different alternatives for financing, that really is their decision."

The mayor's office wants to designate a narrow band of land on the subway corridor - which would eventually stretch to Downsview station in the west and the Scarborough Town Centre in the east - as a zone where tax-increment financing and transit-oriented development fees could be used to pay back a private consortium's upfront investment over decades.

As the subway spurs development, the city would dedicate a portion of future property-tax assessment cash, along with higher development fees, to whichever private partner wins the tender.

The private partner would bear the risk, Mr. Towhey said.

"We're quite confident that there will be considerable interest in this kind of an opportunity for the private sector and the public sector to work together," he added.

Although private-public partnerships have been used to build transit elsewhere in this country - on Vancouver's new Canada Line, for example - no Canadian city has relied on capturing the value of future development to foot the costs.

"This is breaking new ground in terms of transit finance [in Canada]" said Matti Siemiatycki, a geography and planning professor at the University of Toronto who wrote his PhD thesis about the Canada Line.

However, he and other experts cautioned that the model has worked primarily in dense Asian cities, such as Hong Kong, which bear little resemblance to suburban Scarborough.

"Hong Kong is a very different animal from Toronto in terms of the density," said Eric Miller, director of the U of T's Cities Centre. "That experience, I don't think, is directly transferable here."

The first phase of the old provincially funded Transit City plan included four lines: The Sheppard LRT, which has already broken ground; the Finch West LRT; the Eglinton Crosstown; and a Scarborough LRT to replace the elevated and deteriorating Scarborough Rapid Transit line.

Although the mayor's office and the province haven't reached a new agreement, both sides believe they are getting close.

The deal is shaping up to include the city-owned, privately financed Sheppard subway, a provincially owned Eglinton light-rail line running underground for almost the entire route between Jane Street and Kennedy station, and either an elevated LRT or a subway to replace the Scarborough Transit Line.

Bus service on Finch Avenue would be enhanced.

"Obviously, time is of the essence," said Bruce McCuaig, president of Metrolinx. "We're moving very, very quickly to review this and have a conversation with the province so we can quickly get back to the city."

"On our side," Mr. Towhey added, "we're very close to asking for a meeting between the Premier and the mayor."