NDP questions ‘paltry’ price for Hearn
MPs demand appraisal of OPG waterfront site sold to private company
Questions are being raised about the $16 million sale price a province-owned corporation put on a 16-hectare power plant site on Toronto’s eastern waterfront.
At Queen’s Park, the New Democrats want an independent appraisal of Ontario Power Generation’s “paltry” price for the hulking decommissioned R.L. Hearn power plant with longtime leaseholder Studios of America.
Others were pointing to the past sale of waterfront properties, including, earlier this year, OPG’s $275 million deal for the significantly bigger, 72-hectare former Lakeview Generating Station site on Mississauga’s waterfront. New Democrat MPP Peter Tabuns (Toronto-Danforth) told reporters Friday that the Hearn site is on industrial wasteland poised to blossom with new residential and commercial development in years ahead, boosting its potential value.
Although OPG has said the land is contaminated from decades of operation as a coalfired power plant and needs expensive remediation, Tabuns maintained “the potential to make a lot of money out of these sites is very, very high.”
He questioned the deal, which OPG announced Friday with conditions that Studios of America not resell the land within three years and no residential development or “sensitive” uses within 15 years.
The Star wasn’t able to reach Studios of America representatives for comment Friday.
Tabuns argued that wealthy real estate developer Mario Cortellucci, one of the partners in Studios of America and a past political donor to Doug Ford and his late brother Rob, got “an unbelievably good deal.”
OPG said Thursday its board made the decision to sell based on an independent evaluation of the polluted “brownfield” land and that it kept Premier Doug Ford’s government abreast of developments.
“This decision was made solely by OPG,” said Sydney Stonier, a spokesperson for Energy Minister Greg Rickford. Last year, an OPG executive told a City of Toronto committee his corporation would not sell the Hearn site without the “blessing” of the province, its sole shareholder.
“Is this a deal that we want?” said Tabuns, questioning if Ford was involved and noting a recent Globe and Mail report that the premier’s chief of staff forced the power company to fire former Patrick Brown chief of staff Alykhan Velshi.
“There have been a lot of questions recently about the premier’s office reaching into OPG to get them to make decisions,” Tabuns said. “One has to ask, did that happen here?”
Ford’s office referred the Star’s questions to Rickford.
The sale price would be impacted by such factors as the cost of cleaning the land, Studios of America’s lease from 2002 to 2041, rights of access to the site to get to adjacent properties and the fact it is not serviced by city power or sewers.
Lakeview, a former coal plant like Hearn, was sold to a consortium including Argo Development Corporation, TACC Construction Limited, Branthaven Homes, Greenpark Group and CCI Development Group of Companies for $275 million. That plan, announced in March, is to turn the former industrial site into a vibrant mixed use community, including homes, coastal wetlands, trails and meadows.
Last December, the City of Toronto announced it was buying the Showline Studios site in the Port Lands, on Lake Shore Blvd. near Carlaw Ave. for $30.9 million to ensure it remains studio space for film, television and digital production.
Andrew Barnicke, vice chairman and managing partner of capital markets Canada for Colliers International, which is not involved in the Hearn deal, said there are many “extraordinary” costs that could factor into the $16 million price tag.
They include the level of soil contamination, the lack of municipal services, potential moves by the city to protect the huge building as a heritage site and, if that doesn’t work, demolition costs.
As for the potential future for the site, Barnicke noted the plan for the Port Lands would probably not see major development on that site for decades.
“Time is a killer for land values,” he said. “If you have to wait an extended period of time to recoup your money back … it really, really kills the value.”
Barnicke added that it’s rare for a government agency to sell land without a public competition. “I’ve never, ever heard of something like this,” he said of OPG negotiating with only one potential buyer.
The former plant, which has been used over the years as a movie location and art installation site, is on Toronto’s heritage register.