I'd rather see a collection of modest-sized buildings on this site, that step down from Bay Street to Yonge but each have their own frontage. The key would be to enhance the streetwall along Wellesley and attempt to extend its vibrance all the way to Bay.
I'd love it if they extended St. Nicholas further south the Breadalbane, leaving a small track of land for lowrise live-work studios along St.Nicholas, backing onto that rat-infested alley. The Breadalbane frontage should address the YMCA and hopefully have some business or institutional usages.
yup ... the western portion of the site (abutting Bay Street) is now occupied by two residential towers, being Allegro @ Opera Place (south) and The Bay Club (rental - north) ... these are shown in the aerial shot above
Morguard had an application on the remaining eastern portion of the site (including portions with Wellesley frontage) for proposed "NEW 9-STOREY MIXED-USE RESIDENTIAL-COMMERCIAL BUILDING WITH 318 DWELLING UNITS AND RETAIL USES AT GRADE FRONTING WELLESLEY" in August 2007 ... but it's gone completely quiet since that time