Glen
Senior Member
http://www.nytimes.com/1988/07/24/realestate/focus-toronto-growth-foreseen-into-1990-s.html
City Place was supposed to have had six million sq ft of office space!
WITH its reputation as a center of manufacturing and finance as well as its proximity to major United States cities, Toronto has emerged as one of Canada's economic bright spots. Last year there was record demand for office space, and as a trade agreeement with the United States nears approval, the business community is geared up for continued economic growth in the 1990's.
But the city, Ontario's provincial capital, also finds itself grappling with some of the major problems associated with urban growth - a tight and expensive housing market and traffic congestion. With major developments moving forward, there is no sign that a slowdown will ease the problems. Since 1981, the population of the Toronto Statistical Metropolitan Area has jumped 9.2 percent, to 3.7 million, according to Statistics Canada, making it the country's most populous region. The population of Metro, which includes Toronto and six surrounding communities, has grown 2.6 percent, to 2.1 million.
''Toronto has been running on all cylinders since mid-1986,'' said Edward Carmichael, an economist and vice president of the C. D. Howe Institute, a local consulting firm.
Downtown developments such as the 1.6-million-square-foot, four-level Eaton Centre, a glass-enclosed shopping mall, and the striking 1,815-foot-tall CN Tower will in the next decade be joined by the first elements of the $500 million mixed-use CityPlace complex. While over 6.5 million square feet of office space has been added to the Metro market in each of the last two years, absorption of 9.2 million square feet in 1987 set a record, according to Royal LePage Ltd., a local real estate brokerage.
Much of the estimated five million square feet of office space added to the Metro market in the first six months of this year was quickly absorbed; current office vacancy rates range from 6.7 percent throughout Metro to 5.3 percent in the financial district here. Rents exceeding $35 per square foot for Class A office space downtown are common, according to Royal LePage.
One of the newest additions to the city's skyline, the 68-story Scotia Plaza, developed by Campeau Corporation, will add 1.5 million square feet of office space when it is completed by the end of this year. Tenants have been moving into lower floors since April. With rents ranging from $27 to $39 per square foot, the project is 65 percent leased.
But along with the growth have come the big-city problems. While the median sale price of a home has risen 61 percent in two years, to $160,400, according to the Toronto Real Estate Board, residential development has not kept pace with demand. The apartment vacancy rate is less than 1 percent. Also, traffic congestion is severe, but the city hopes to partially address the problem by expanding its transit system.
''IT is great to have success but there is a price,'' said Mayor Arthur Eggleton. ''The squeeze on lower-income families, an accelerated need for assisted housing, these are some of the issues we face.''
In 1976, when the city drew up a long-term plan for downtown development, concern about the impact of development led officials to impose strict limits on building density. But in 1983, the city devised a system that would give a developer greater density allowances in return for providing community benefits such as day-care centers and parks - a system similar to provisions in several United States cities.
At Scotia Plaza, for example, Campeau was granted increased density in return for providing a rent-free day-care center and an underground link to the subway system.
''We're interested, as development is happening,'' said Robert E. Millward, Commissioner of Planning and Development, ''in making sure the impact does not hurt the rest of the city.''
Perhaps the most ambitious plans involve expanding the core of the city to make use of the underdeveloped Lake Ontario waterfront now cut off from downtown by the eight-lane Gardiner Expressway.
''For years we turned our back on the lake; we cut people off from the water with rail yards and shipping yards,'' Mayor Eggleton said. ''The movement now is to bring the city back to the waterfront.'' It has been slow going. Plans for the development, called Harbourfront, were drawn up 10 years ago by the Federal Government, as the city's real estate market foundered. They called for housing, commercial development and parks on 100 acres at lakeside.
With about half of the $650 million project complete, $110 million in Federal funds has been spent on land acquisition and renovation. Private projects include a 152-room hotel, 1,900 housing units and the 750,000-square-foot mixed-use Queen's Quay Terminal, a former warehouse, which now houses restaurants and shops below office and residential space. With a regular schedule of cultural events, Harbourfront has also become one of the city's top tourist attractions.
Development has come to a halt, however, as controversy over the height and design of three recently completed 19-story condominium towers and diminishing public space prompted the city to invoke a freeze. A new development plan must be approved at both the Federal and city levels before Harbourfront can be completed.
Meanwhile, north of Harbourfront, site preparation is under way for CityPlace, a 70-acre mixed-use redevelopment on land owned by CN Real Estate, a division of Canadian National Railways. The 20-year project is to include six million square feet of office and retail space and 5,000 housing units. The project will include SkyDome Stadium, now under construction, and about 30 acres of park land.
Work on the streets, utilities and other improvements, including a transit link paid for by the city, has been under way for two years. The first office building in CityPlace is expected to be completed in 1992.
The potential impact of the United States-Canada Free Trade Agreement, under consideration in both countries, is stirring speculation about Toronto's continued economic health. While the elimination of tariffs promises to increase trade, David Peterson, the provincial Premier, questions whether it will benefit Ontario's industry.
But Mr. Carmichael, the economist, believes that anticipation of the agreement has in itself buoyed the city's economy.
''All of southern Ontario, from Windsor to Toronto, which has been booming without the trade agreement, stands to benefit,'' he said.
City Place was supposed to have had six million sq ft of office space!