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This site used to be Timothy Eaton Business and Technical Institute. One portion was picked up by a residential developer who plans to build a 390-unit townhouse complex on the site, and the other went to the City of Toronto, which transferred the land to the YMCA to build a large recreation centre.

Glenn Lowson/The Globe and Mail

For nearly four decades, teenagers built tables, chairs and benches at Timothy Eaton Business and Technical Institute, a trade school in northeast Toronto. In the coming years, construction crews will be building townhouses there.

The school is one of 65 Toronto District School Board properties that have been sold since 2008 after being deemed surplus. While the high school was built for 756 students, its enrolment had dropped to 208 in 2009, its last year of operation. After sitting empty for three years, the prime 12-acre piece of land it sat on was split in two and sold. One portion was picked up by a residential developer who plans to build a 390-unit townhouse complex on the site, and the other went to the City of Toronto, which transferred the land to the YMCA to build a large recreation centre.

The TDSB is now considering offloading four more of its schools. At an emergency board meeting set for Tuesday, trustees will debate and vote on the new capital plan, which includes selling two elementary schools that are already closed -- Old Orchard Junior Public and C.B. Parsons Junior High. In addition, they will vote on selling the land where Whitfield and Bridgeport schools once stood.

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In a report released last month, the board identified 130 schools operating at less than 65 per cent capacity. Education Minister Liz Sandals has given the board until Feb. 13 to come up with a plan to manage its underused space. The board has been under provincial scrutiny after publicized disputes between staff and trustees, including allegations of harassment.

Trustees say a hasty sell-off could cost more in the long term if enrolment picks up. Potentially selling schools is an act of desperation – the board faces a $3-billion repair backlog – but that is not how developers see it.

"It's not a power-of-sale situation where there's been a default on a mortgage. This is an open competition for desirable land," said Barry Waltman, the president of Genesis Homes, the developer that bought half of the Timothy Eaton property. His company paid $12-million for its seven-acre share, while the City of Toronto paid $5.7-million for its 5.2-acre portion, public records show.

After a TDSB school is deemed surplus, management is transferred to the Toronto Lands Corp. (TLC), an arms-length agency of the board responsible for sales of property and land. Between 2008 and 2014, the TLC generated $405-million from property sales.

As attractive as these sites are to private developers such as Mr. Waltman, only half ever go on the open market. Provincial regulations say the property must first be offered to the French public school board, then the Catholic boards, colleges, the closest university, the province, the city and the federal government. If none of them put in an offer within 90 days, the TLC lists the property on the market.

While the TLC gets its properties appraised before they are sold, the listings do not have price tags; the agency accepts bids, seeking the "highest and best value."

Daryl Sage, the TLC's chief executive, said properties routinely sell for 60 to 100 per cent above their appraised value. Even then, the developers who buy them still stand to make impressive returns.

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In 2013, the TLC sold the 6.3-acre, tree-bordered lot on which Pringdale Gardens Junior Public School was built for $8.2-million to Monarch Homes. The developer plans an 82-unit freehold townhouse complex on the site with units ranging in price from $514,990 to $572,990.

Property sales may be the best way to raise cash for the TDSB, but trustee Chris Glover says that in the long term, a smarter strategy is to rent out underused schools.

If the board believes neighbourhood demographics may change, it will give the TLC directions to lease a school rather than sell it. If the board wants to reclaim a leased property, it can impose a 12-month termination of the lease.

In Mr. Glover's Etobicoke ward, Briarcrest Junior School and Rosethorn Junior School closed in the 1990s when enrolment dropped, but reopened a decade later after more young families moved into the area. The board was under pressure to close schools in East York 15 years ago, but the school-age population has rebounded in recent years and now some schools are over capacity. Had those schools been closed and sold, the TDSB would have had to pay a large sum to build new ones later, Mr. Glover said.

"Once you sell property in Toronto, you're never getting it back," he said.

When schools are leased rather than sold, however, their potential for profitability is limited. Many are in poor condition, so sometimes an offer of $6 a square foot will be chosen over a higher one if the bidder promises to cover the cost of repairs. For the most part, TDSB properties are leased to daycares, private schools and non-profits.

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"People will say, 'Maybe you would make more money by leasing to a company or something,'" Mr. Sage said. "But they're not zoned for that, and you can imagine what communities might do if businesses went up in schools."

Editor's Note: The original newspaper version of this article and an earlier digital version incorrectly reported that trustees would vote on a plan which includes selling four elementary schools that are already closed: Bridgeport, Old Orchard Junior Public, C.B. Parsons Junior High and Whitfield schools. In fact, Whitfield and Bridgeport are vacant lands and do not include school buildings. This digital version has been corrected.

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