That plot is ripe for development and OCAD has been seeing some huge growth. I have no doubt that they'll put something larger there than the current building soon enough.
Gehry's already doing the AGO. Might as well go for some red titanium turning torso sweetness
Gehry seems to like doing academic buildings, shouldn't be too hard to convince him to adapt one of his designs (i.e. the one I mentioned) and plop it right there.
... I mean, if you wanna go all nutcase on the corner, it's an art school Gehry, please do... please do:
I don't know about AGO, but OCAD owns that building. Making something unique there would only add to their growing reputation for interesting architecture.
In that last shot, I really like the juxtaposition of the wave-like facade of the AGO against the sharp corners of OCAD, the AGO box and the Uno Pri (I think) apartment building behind it.