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Parents Sherry Giles and Rob McCready outside Davisville Junior Public School.Fred Lum/The Globe and Mail

Davisville Junior Public School, a stout brown-brick structure with weathered white trim, holds fewer than 400 students.

There is nothing remarkable about this small elementary school, in other words, but for one big wrinkle: The academy is at the centre of a high-stakes battle between a cash-starved school board and the guardians of the city's skyline.

The Toronto District School Board, creaking under the pressure of labour unrest and the controversial resignation of its director over plagiarism charges, is facing a crushing $3.2-billion maintenance backlog. Desperate to turn the tide and raise the money it needs for important repairs, the board is turning to its most valuable asset – land. It has zeroed in on six schools with property that could be sold and developed.

The Davisville school land, a valuable mid-town plot just off Yonge Street, is the crown jewel in the board's grand plan, a vision that includes a brand-new school built into a 12-storey condo tower. But city officials are resisting, arguing the plan is an affront to rules that protect neighbourhoods from hungry developers. With the cash-starved board willing to go to the mat, the fate of this small, aging school could determine how Toronto balances its need for strong schools with its promise to control growth.

"This is going to be a scenario that we're going to see come up across the city," Mr. Matlow said. "The school board has a sincere and honest interest in repairing its facilities; the city has a sincere and honest interest in protecting its neighbourhoods.

"And the question is, where do these two interests meet?"

No one disputes the financial pressure the school board faces. The TDSB has for years at budget time deferred spending on regular repairs and upkeep to its schools in an effort to avoid layoffs, school closures, cuts to programming and other undesirable measures that would otherwise be needed to balance the board's books.

And all involved agree the students of Davisville JPS could use new home. The current building was built in 1962 partly to accommodate the Metro Toronto School for the Deaf, and is showing its wear with $8.3-million in needed repairs.

Board trustee Shelley Laskin is confident there is still time to convince stakeholders the structure and the new school will bring "tremendous benefits from a community perspective," as the cash gained from selling land will be used on modern school buildings and renovated playgrounds. (The recent redevelopment of North Toronto Secondary School near Yonge and Eglinton, where tall towers are permitted, netted the TDSB nearly $23-million, and many now consider it a success in spite of early opposition that dogged that project.)

But in addition to city planners, among the stakeholders who will need convincing are parents and residents, who flatly rejected the TDSB's initial proposals for a 30-storey or 20-storey tower. Though the city's official plan caps buildings in the area at four storeys, they seem more willing to contemplate the latest design.

"We really focused on ensuring we had the same amount of green space – so we didn't lose any space for the kids – and that it was going to be dramatically improved," said Lisa Kelleher, a parent who sat on the project's Local School Community Design Team. "Yes, 12 storeys seems unusual on that land, but if it's on the south side, adjacent to 25-storey apartment buildings, it doesn't feel quite so off."

The final design isn't the only contentious factor -- the way the board has led consultations while doggedly pursuing its goal has also raised a few hackles. "I very much thought the board was getting ahead of itself," said Rob McCready, the past chair of the Davisville school council, who has sons in grades 3 and 5. "I get the impression that there's been a sort of magical thinking during the process … Now they're running up against these issues and instead of dealing with them steadily and just working through them, they seem to want to just plow on ahead."

The board's plan hinges on a liberal interpretation of strict city planning rules. While Davisville JPS sits in a low-rise "neighbourhood"-designated area, much taller apartments sit just across the street on Davisville Avenue's south side, because the land south of the avenue is designated for high-rises. A document prepared by the Toronto Lands Corp., a subsidiary of the TDSB that manages its real-estate revenue, argues mid-sized buildings like the proposed 12-storey Davisville tower "can provide a natural transition between neighbourhoods."

But the city's official plan was designed to clearly separate zones where planners want to promote growth from areas that need protecting from over-development that would allow towering buildings and an influx of traffic to encorach on quiet streets lined with houses. David Oikawa, manager of the midtown section of City of Toronto Planning, said the disparity in what's allowed on either side of a street like Davisville Avenue is deliberate, and exceptions are very rare.

"We think streets are good boundaries, because there can be no dispute whether you're on one side of the street or the other," Mr. Oikawa said. "As soon as you're saying, 'we just want what's allowed across the street,' then the person who's behind that property is going to say, 'I just want what's next to me.' So it would just keep going and going and going."

Anticipating that they'll be accused of setting a bad planning precedent, the TDSB plans to ask the city for a "policy amendment" – essentially a set of criteria under which they could receive special consideration of official plan exceptions for schools on the edge of low-rise neighbourhoods, without paving the way for other developers to build higher next door. But Mr. Matlow says that ignores the complexity of the official plan, which was carefully considered and is deliberately strict.

Mr. Matlow promised to "oppose [the board's application for an official plan amendment] very strongly," and says he has his fellow councillors' support.