At the Board of Control on Wednesday we received a report from two Ivey Business School professors which analyzed a proposal by Sun Life to build a business park which could accommodate warehouses and some light industry on a piece of farm land on the south side of Wilton Grove Road across from the city's Forest City Industrial Park. Although Sun Life had withdrawn its proposal nearly a year ago, the report suggested that it could have offered a good economic opportunity and a number of members of the Board of Control decried the loss of hundreds and even thousands of potential new jobs.
But was it really a good deal?
To answer that question, we need to go back to how this all came about.
When I joined council and the planning committee at the end of 2006, the five year review of the Official Plan was well under way. The review, which is mandated by the province, allows us to consider how much land we need to accommodate projected population and economic growth. In doing so we are under the jurisdiction of the Provincial Policy Statement which requires that we make efficient use of land and protect natural heritage and agricultural lands. Our review showed that we had enough land for residential, commercial and industrial development to last us for the next 20 to 50 years and therefore there was no justification for expanding the urban growth boundary at this time.
Not surprisingly, a number of landowners and developers with lands near the urban growth boundary came to the public meeting on the Official Plan to ask that an exception be made for their particular lands. Being inside the urban growth boundary increases the market value of a piece of land significantly.
Among these was the land in question, a 127 acre farm consisting of some corn fields and woodlands including an environmentally sensitive area (ESA). Sun Life had an option to purchase this land from the owner and proposed creating a business/industrial park with high-ceilinged rental buildings that could be used as warehouses and distribution centres for container boxes full of items manufactured in low-wage countries. They suggested that this would bring construction jobs and permanent warehouse/industrial jobs to London.
Planning Committee responded to the proposal by holding firm on the urban growth boundary but informing all those who wanted special consideration to put forward an application which would be reviewed on its merits. This option is available to anyone between Official plan reviews. We were not interested in dealing with the proposal as part of the review because it would have opened up the process to everyone and that couldn't be justified by the review we had done.
Two members of the committee, Controller Hume and Councillor Caranci, disagreed with the majority decision and complained to the Mayor who then referred the issue to Board of Control, a most unusual development. At the special meeting of the Board of Control it was decided that the Urban Growth Boundary would be upheld and we would spend $50,000 to hire a consultant to analyze the proposal from an economic development perspective. The hope was that the analysis would provide a template for use by staff in subsequent similar situations. In the meantime, Sun Life could submit its application but it would be contingent upon meeting the requirements of the Provincial Policy Statement which allows for some situations in which a piece of land within the urban growth boundary could be traded for a more suitable piece of land outside the urban growth boundary so that the total area remains unchanged.
We waited and waited for Sun Life to submit an application which they finally did in June 2008. But not a development application or a re-zoning application, only an application to amend the urban growth boundary. Not surprisingly, some members of staff were suspicious of Sun Life's intentions. Why wouldn't they submit a development application if they were serious? However, staff went ahead and identified a parcel of land on Huron Street that might do for a swap, subject to provincial approval.
In September,the market collapsed. Sun Life lost $334M when Lehman Brothers declared bankruptcy. So we shouldn't have been surprised when in December they sent staff a note saying that as a result of the changed economic conditions they were allowing their option on the land to expire and were withdrawing their proposal. At the same time they cancelled out of a seniors project on Grosvenor that had received significant public support.
The consultants finished their report and submitted it to the city. It was shelved until Roger Caranci asked that it be brought to Council via Board of Control. In the newspaper, Caranci was reported as saying that if city hall hadn't put up so many obstacles, Sun Life could have had the park mostly built before the economic downturn. That would have been difficult, given that Sun Life never actually submitted a development application. Nor did they identify any specific tenants for the buildings they were talking about building.
While the consultants' report on the proposal was quite positive, our own head of finance was far more critical. He pointed out that the taxpayers would be on the hook for about $19M in infrastructure costs (road widenings, interchanges, etc)for a development that seemed to be largely speculative, providing few jobs, limited tax revenues and increased servicing costs. He was also less than glowing about the consultants' report which could be used to justify any development since it failed to acknowledge the costs accruing to the city.
For me, the warning signs went up from the beginning for the following reasons:
1. The proposal was generic rather than specific.
2. No guaranteed or potential tenants were identified for the buildings.
3. The job projections were unrealistic.
4. There were about 22 parcels of industrial land of an appropriate size available in the city's inventory within the urban growth boundary.
5. It doesn't make economic sense to pay to put a private industrial park across the street from a city-owned one which has serviced land available at very low prices.
6. Agricultural land is precious; you don't trade it in for a warehouse.
At the meeting before Board of Control Councillor Caranci stated that he personally knew two potential purchasers for the Baker farm, the land in question. He suggested that we act now to bring it within the urban growth boundary and proceed with swapping out the land on Huron Street. Whom is he representing? His constituents? Or speculators?
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