This is a very messy situation. Long term leases ensure that unless some miraculous kumbaya moment happens amongst all the stakeholders, this building cannot be razed and restarted as it should be.
What gives me some semblance of hope is that:
A) PenEquity is out of the picture. The extraordinarily incompetent developer can no longer influence the fortunes of this property. It's in much better hands today.
B) This location has so much more revenue potential than is being exploited and everybody knows it.
C) Let's look at the anchor tenants:
- FutureShop. They signed the second longest lease next to AMC (now Cineplex). However, BestBuy and FutureShop are canibalizing each other and so I wonder how long before Best Buy decides to consolidate its properties under a single banner. The Best Buy in the Eaton Centre is the bigger store, likely to be selected to be kept.
- Adidas, Extreme Fitness, Milestones, Jack Astors and Shoppers Drug Mart are major tenants but have limited leases from what I recall. They can be bought out of their contracts that have less than 10 years remaining.
- AMC signed the longest lease (30 years) for clear reasons related to their large investment. This lease was acquired by Cineplex and they're the major hurdle to demolition of this property. If I were them, I'd keep this location over Scotiabank Theatre if it was determined that both theatres are too close to one another. Can the developers convince Cineplex to give up this location for 2 to 3 years in a transition to a much better complex?
- Ryerson. They're expanding aggressively and their equity on this property is locked in a share of a parking garage and a book store. It's less than an ideal use and I think Ryerson would be all ears for a deal. A shared multi level underground parkade in the new building and a land transfer to accommodate Ryerson would be necessary. Perhaps the complex wouldn't have to be built as far back as Gould and Ryerson could acquire the Empress hotel property to build something from Yonge to Victoria, creating a real entrance gateway when pairing with the Student Learning Centre.
Something like Aura would work really well here. A 5 to 8 story podium with a major movie theatre complex, restaurants, bars and other entertainment (i.e. a bowling alley). Plenty of opportunities for patios overlooking the square by using setbacks should be considered. Above, a hotel tower + condos would finance the whole thing and justify demolishing a 5 year old building. Money talks and there's a lot of reason for the developers to be starting a conversation in this booming part of the city.