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Thread: City enters the luxury real estate development business to raise revenue

  1. #1

    City enters the luxury real estate development business to raise revenue

    In a bid to raise revenues, the City of Toronto created Build Toronto as an arms-length development corporation to maximize the economic development potential of surplus city-owned land.

    Build Toronto has partnered with a well known Canadian developer for its first major project, which will be a 75-storey (!) luxury condominium tower. However, such a partnership will likely create a conflict of interest as the building moves through the planning process:

    Local councillor Adam Vaughan agrees the site is suited to a tall structure, but said the joint-venture model turns the city into a real estate speculator and creates a conflict of interest as the building goes through planning approvals.

    Preliminary designs, he said, includes a floor plan that is bigger than city standards and the project exceeds height restrictions for the site. Plans for aboveground parking also require zoning changes, all measures, he said, that will see the city negotiating with itself as regulator and developer. Any changes requested by staff could affect the citys potential returns, said Mr. Vaughan, a frequent critic of the Ford administration.

    Its not my job to guarantee investment, he said. Its up to us to negotiate what is in the best interests of the neighbourhood.
    Those crazy Canadians! Im amazed at the planning news coming out of my hometown. Its interesting if nothing else. Could you imagine if this was happened in your city?


  2. #2
    Cyburbian stroskey's avatar
    Dec 2008
    the delta
    Why not? The city already regulates housing and development and needs revenue. Let's pretend the city was a silent partner and only provided the cash for projects. It could have a "subsidiary" that is completely run on its own just like any other project, including development fees and taxes, so it can see how those really do impact development. Any large corporation buys products from itself at market rate, which allows it to see where it is or is not competitive - they don't just ship it to another factory for free. This would be no different if it was completely separated from politics. So long as it is not political and is run as a company, I see not problems. I like this better the gov't building houses as their own entity.
    I burned down the church to atone for my transgressions.

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