City may expropriate airspace downtown to build Rail Deck Park

Toronto city council decided on Wednesday to keep pushing to acquire the rights to airspace above a portion of a downtown rail corridor for its proposed Rail Deck Park.

If negotiations with companies that own the airspace fail to result in a deal, council decided that it will direct its staff to begin expropriation proceedings. The motion passed 21-to-0 at a meeting on Wednesday.

Council wants the rights to 1.2 hectares of airspace between Spadina Avenue and Blue Jays Way, south of Front Street West. The area would be the eastern portion of the park. Talks with the owners to acquire the airspace at "fair market value" began in 2018, according to the city.

Toronto Mayor John Tory said Wednesday's decision is the "next important step" in the development of Rail Deck Park, which he has said will provide much needed green space for residents downtown.

"I am determined to keep it moving," Tory told reporters at a news conference at city hall on Wednesday.

"I say we have plenty of condos but not enough green space downtown and I say that it is time to do something about that and hence my determination with this project."

Rail Deck Park is a proposed eight-hectare green space that would be built above the rail corridor between Bathurst Street and Blue Jays Way. The project is expected to cost around $1.7 billion. But Toronto does not own the airspace above the proposed site, a major hurdle that has stalled the early planning stages.

This map shows who owns which piece of sky over the rail corridor:

'We haven't been able to settle on a price,' Cressy says

Coun. Joe Cressy, who represents Ward 10 Spadina-Fort York, said the city "desperately" needs Rail Deck Park.

"We haven't been able to settle on a price. And so today, we are taking the important step, and if necessary, expropriating those air rights to finally build our park," Cressy said.

To start construction as planned in 2022, the city needs full access to the sky above the downtown rail corridor. According to CreateTo, a city agency that manages its real estate portfolio, several railway companies own the air rights between Spadina Avenue and Blue Jays Way.

These companies include Metrolinx, Canadian National Railway, Toronto Terminals Railway Company and Craft-Kingsmen Rail Corp.  

"The city has undertaken comprehensive and detailed title searches for this site," Susan O'Neill, communications director for CreateTO, said in an email on Wednesday.

City knows 'what we want to pay,' says CreateTO CEO

Brian Johnston, CEO of CreateTO, added: "We kind of know what we can pay, and what we want to pay, but it's nowhere near what they think we should be paying."

Johnston said the city will get a third-party appraisal of the value of the air rights as it continues negotiations.

The airspace east of Spadina Avenue, which is what the city is pushing to take over first, is owned by Canadian National Railway Company and The Toronto Terminals Railway Company Limited.

Craft-Kingsmen Rail Corp. has this air space under agreement of purchase and sale, pending a Planning Act consent to severance that will come before the committee of adjustment this year, according to CreateTO.

In a letter to the city, Craft-Kingsmen Rail Corp. made an offer with possible options:

• To sell the air rights for the park portion to the city for $340 million.
• To rent the air rights for $25 million a year, thereby enabling the city to avoid a "major capital expense."
• To enter into an agreement for the air rights at an initial price determined by CreateTO.

Robert Sabato, spokesperson for Craft-Kingsmen Rail Corp., said in a email on Wednesday: "To date it has been very difficult to get the city to engage in meaningful dialogue."

The city said in a news release on Wednesday that acquisition of the air space, along with the city's existing Northern Linear Park property, would allow the city to proceed with the first 1.6 hectares of the park, roughly equivalent in size to Grange Park just south of the Art Gallery of Ontario.

"The acquisition of this air space will guide the future development of this area of the rail corridor within the city's Official Plan policies. Additional air space in the Rail Deck Park project area (between Spadina Avenue and Bathurst Street) will be pursued at a time when staff are confident it can be acquired at fair market value," the city added.

City staff are expected to report to council later this year about the next stage of the project and to outline a funding and financing strategy for the acquisition of the airspace.