Developers challenge Scarborough subway with OMB appeal
The organization representing developers is fighting the city at the Ontario Municipal Board over the controversial Scarborough subway

thestar.com
Nov. 26, 2015
By Jennifer Pagliaro

A powerful organization representing developers and builders says the city should scrap plans to build the Scarborough subway because the number of potential riders doesn’t justify the $3.56 billion price tag.

The Building Industry and Land Development Association, better known as BILD, is taking on the city at the provincial body that handles land and development disputes, the Ontario Municipal Board, the Star has learned, a move that could cost the city millions.

It is also challenging the planning foundation for the three-stop subway - which council controversially approved last term over a seven-stop LRT that was fully funded by the province. BILD is raising red flags about the city’s ridership projections.

Bryan Tuckey, BILD’s president and CEO, says homeowners across the city should not be on the hook for a “political decision.”

“The ridership numbers that we have demonstrate that what’s needed in that area is light rapid transit,” Tuckey, whose background is in city and provincial planning, told the Star.

“We want to have fair and accountable use of development charges.”

The appeal by BILD contests a bylaw for what are called development charges, fees collected by cities from builders to fund future infrastructure projects.

In May of this year, the city approved a plan to phase in new development charges to pay for its share of the subway. The city says it needs to raise $910 million in capital costs. Most of that - $745 million - is expected to come from a Scarborough subway tax on every resident’s property bill. That levy has been in effect since 2014, collecting $39 million in the first two years and is expected to ding taxpayers for the next 30 years.

The rest, $165 million, the city hopes to collect through development charges.

This spring, BILD argued the citywide charge, which is applied when a building permit is issued, had been ushered in too quickly and put an unnecessary burden on new home buyers.

“Development charges are a tax on new homes,” Tuckey argued at a press briefing on the housing market Wednesday. “It is unreasonable and unfair to put the cost of infrastructure on the backs of new homeowners.”

In May, council rejected staff advice to accept a compromise with BILD on the development charges, one that may have cost the city $4 million but would have avoided what the city’s chief financial officer, Rob Rossini, called the “wild card” of an appeal.

Just over a month later, BILD filed their appeal to the OMB. The appeal argues the city’s ridership projections for the subway have been exaggerated.

Though planners say ridership projections are just part of the equation in deciding where and how to build transit, those numbers have been at the centre of the debate over whether to build a higher-capacity subway instead of the approved LRT.

Though the TTC put the ridership number at 9,500 riders in the busiest direction during the rush hour - a standard measure in transit planning - the city presented a significantly higher number, 14,000, in the midst of the 2013 discussions. That was the number used to just barely justify the need for a subway.

The current council, led by Mayor John Tory, continues to back the subway despite growing opposition over the numbers, cost and possible routing through low-density neighbourhoods with limited potential for redevelopment.

The city’s chief planner Jennifer Keesmaat has since said the process was rushed and “problematic.” She also told the Star the ridership projections are now “irrelevant” as the city is working on an updated model expected to produce new figures in early 2016.

However, the city’s existing ridership numbers were used in the calculation of the development charges now being contested.

In a notice of appeal to the OMB, BILD says “many of its concerns went unaddressed” despite consultation with the city. BILD hired consultants from the IBI Group to assess the bylaw and the city’s ridership figures.

In letters to the city, the group’s deputy regional director for Canada East, Audrey Jacob, questions the city’s ridership figure and its use in calculating the development charge.

If the development charges are reassessed using the TTC’s 9,500 figure, it would represent a “significant reduction in the estimated (development charge) for the Scarborough subway extension,” she wrote.

City-hired consultants Hemson Consulting Ltd., responded by saying they believed their calculations were “generally representative of the ridership for a subway option” and are “reasonable based on the best available information.”

The OMB has scheduled a pre-hearing in the appeal for next month.

Rossini told the Star that while the OMB has the power to strike down the bylaw, which would leave the city looking for another way to collect $165 million, he said it would be “highly unusual.”

“We will rigorously defend our bylaw and council’s position,” he said. “As with any appeal, discussions and potential settlements are always a possibility as well.”