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8/2/2019 Accelerated Port Lands: Economics, Markets, And Financing
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BUSINESSANALYSIS:LANDECONOMICS,
MARKETANDFINANCING
MichaelWilliams
GeneralManager,EconomicDevelopmentandCulture,
CityofToronto
DavidKusturin
ChiefOpera
8/2/2019 Accelerated Port Lands: Economics, Markets, And Financing
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PROJECTTEAM
WaterfrontToronto CityofToronto TorontoandRegionConservaonAuthority PriceWaterhouseCoopers CushmanandWakefield ScoaCapital UrbanStrategies
8/2/2019 Accelerated Port Lands: Economics, Markets, And Financing
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AGENDA
MarketPerspecve MarketDemand CostEsmates CatalycDevelopment Funding NextSteps
8/2/2019 Accelerated Port Lands: Economics, Markets, And Financing
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MARKETPERSPECTIVES
20MarketSoundingInterviews NumerousLandOwnerandUserOneonOneMeengs DemandProjeconsandMarketShareAnalysis FinancingandFundingOpportunies FinancialModellingandDevelopmentPhasing
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MARKETSOUNDINGINTERVIEWEES
CadillacFairview DanielsCorporaon IntegratedAssetManagement
Corporaon
Minto Tridel FirstGulf/GreatGulf StrataAggregates GWLRealtyAdvisorsMacQuarrieCapitalMarketsCanada InfrastructureOntario
NaonalBankFinancialGroup BrookfieldFinancial
TDBank Metropia BraXyandPartners RoseCorporaon WesieldGroup CityzenDevelopments Euromart MaXamyHomes OxfordProperes CastlepointRealtyPartners Borealis FieraAxiumInfrastructure FengateCapitalManagementLtd.
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KEYFINDINGDEVELOPERSAGREE
GreatLocaonSupporveofhighdensityresidenal,officecommercialandretail;lessdemandforhotelandindustrial
DEVELOPERINTERESTISQUALIFIEDHOWEVER:
Developmentintensificaonrequireshigherordertransit Areaistoolargeforonedeveloperandonerealestatecycle Recognizephasingdevelopmentandinfrastructureisanecessity Pre-servicing(roadsandulies)isapre-requisite Welcome(butwillnotinvestin)instuonalandgovernmentacvies/uses Willavoidbrownfieldliability(butmayassumecosts) Certaintyoflanduse,planningandservicingisrequired
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RESIDENTIAL
6,7008,000units
40to80acres
OFFICE
1.75M4.0Msf
40to90
acres
RETAIL
175Kto400Ksf
5to10
acres
INDUSTRIAL/
PORT
TBD
TBD
TOTAL
100to200acres
SUMMARYOFPROJECTEDDEVELOPMENT
OVER20YEARDURATION
8/2/2019 Accelerated Port Lands: Economics, Markets, And Financing
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INVESTMENTREQUIRED
Floodproteconandassociatedinfrastructure
$400Mto$450M
CompleteinfrastructurerequirementsforenrePortLandsareaIncludeswater,sanitarysewer,stormsewer,roads,bridges,soilremediaon,ulies,parksandtransit
ExcludesLakeOntarioPark$2.0Bto$2.5B
Totalinfrastructureandservicingcosts
$2.5Bto$3.0B
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POTENTIALCATALYTIC
DEVELOPMENTSCouldchangedevelopmentscenario.
Capitalizeonpotenalopportuniesprovidedbyaverymajor
projectallwouldbesubjecttopolicy,market,fundingand
communityconsideraons
PostsecondaryInstuon/ResearchparkCulturalortouristaXraconWorldFair/OlympicsInternaonalNGO/MajorCorporateHeadquartersDesnaonretailcentre/urbanbigboxcentre
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SOURCESOFPOTENTIALREVENUE
TOFUNDINFRASTRUCTURE
LeverageincrementalMunicipalandProvincialpropertytaxes(TaxIncrementFinancing-TIF)
Developmentcharges,Secon37Contribuons,localimprovementcharges
Subdivisioncharges,inter-ownercostsharing LandsalerevenuesfromPublicly-ownedproperes Publicinvestment
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11
ADDITIONALCONSIDERATIONS
ONFUNDINGOPPORTUNITIES
CertainfundingoponshavenoprecedentsinOntario(TIFs) CertainfundingoponsarerarelyimplementedinToronto
(land-ownersgroupcostsharingagreements)
Futurerevenuesarehighlyspeculaveduetoextendeddevelopmentmelinesandgeneratefinancialriskpremiums
Infrastructureinvestmentsprecededevelopmentandrevenuerealizaonthusrequiringbridgefinancing
Innovaveinfrastructurefinancing,deliveryandoperaonmodelsthoughtheprivatesector(P3)arepossible
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ESTIMATED20YEARREVENUE
FORECASTTOFUNDINFRASTRUCTURE
Slltobedetermined Willbemuchlessthantotalinfrastructurecostsforfull
portlandsarea
Willrequirephasingofinfrastructureelements
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NETSTEPS
Addionalinfrastructurecostesmang Esmatepotenaladdionalcommercialindustrialandportusegrowthover20years(minorrevenueimpact)
Assesspotenalimpactofcatalycusesondemandandmarketsharebyassetclass
Completeanalysisofinfrastructurefinancingstructuresandrevenuesources
Completepro-formarevenueandinvestmentcashflowscenarios
KEYQUESTION:HOWCANINFRASTRUCTUREINVESTMENTS
BEPHASEDTOCORRESPONDTOREVENUEGENERATION
FROMDEVELOPMENT?
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CONCLUSIONS
2.Realestatedemandwillresultintheabsorponofapproximately10-20%
ofthetotalareaofthePortLandsoverthenext20years.
10%
1.FullInfrastructureFunding
WillNotComeFrom20Year
Development
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Floodprotecon,naturalizaonandgreenspaceMainTradingFloor
Businessanalysis:economics,marketandfinancingSideTradingFloor
PortLands101MainfloorStudio
Developmentplanningandphasing
ThirdFloor,PaRyWaRoom
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HAVEYOURSAY
Publicfeedbackworkshops:Tuesday,April36:30to9:30atSt.LawrenceHallor
Wednesday,April46:30to9:30attheHarbour
CastleWesn
Online:www.portlandsconsultaon.ca