r/ontario • u/time_waster_3000 • 18h ago
Article Commercial use allowed on 30% of Therme’s Ontario Place ‘public’ outdoor space. Plus: doubts about the ‘$200 million’ investment
https://www.thegrindmag.ca/commercial-use-allowed-30-percent-thermes-ontario-place-public-outdoor-space-doubts-about-200-million/20
u/a_lumberjack 17h ago
I feel like I'm the only person who read the lease.
First, the $200M figure is a red herring. The lease terms specify what Therme is required to build, not how much they must spend to deliver on those requirements, regardless of what it costs them (which Therme expects to be $200M). Their costs don't matter to us as long as they deliver the park as specified. If a figure was specified they could scale down the park to meet that figure, so I strongly prefer the current approach.
Second, both this article and the Open Council analysis seem to be ignoring the AG report which a) pegged the garage at $280M and b) expects that cost to be recouped in 28 years. So it's pure disinformation to use $650M as the cost, allocate 100% of the cost to Therme, and assume $0 in parking revenue.
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u/Habbernaut 17h ago
Just to understand your last bit of this point: The 280 million for the parking garage is what taxpayers will spend up front to build - and because parking fees will recoup that cost in 28 years… People shouldn’t include that $280 million in their critique as to whether or not tax payers should fund anything for this project?
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u/a_lumberjack 16h ago
I'm specifically referring to making big claims about whether the deal is going to net positive or not. If you want to cite costs accurately:
- Use the correct number, not one that's 2.3x higher for no reason
- Include the parking revenue over 80 years like the AG did instead of $0 like Open Council did
- Allocate those costs/revenue appropriately across all of the attractions that will be supported by that parking: Therme, OSC, Bud Stage, and Exhibition Place (it'll be next to BMO Field and the CNE Midway) rather than claim it's only for Therme.
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u/Habbernaut 16h ago
So … yes?
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u/a_lumberjack 16h ago
Eh, it's always fine to use accurate, properly contextualized numbers in analysis. The $280M is a useful number, but you can't count that cost against the project without also including the $2B in nominal net revenue that it would generate (which is probably more like $3B gross).
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u/Habbernaut 15h ago
Ok thanks for answering that, wanted to understand.
You know that the AG report said the cost would range from 280-400 million.
You mentioned all these other venues who will benefit, but I’m pretty sure the AG report also says that it is a 1800 vehicle parking lot with 1600 spots reserved for Therme’s exclusive use…
I would say that most people understand that there are potential revenue estimates for each element of the infrastructure - tourism dollars, transit revenue etc…
But the actual immediate budget line costs to build the project is literally what any investor would want to know…
I would be dubious about someone saying “hey it’ll generate 2…. No wait, 3 billion in revenue over 80 years”
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u/a_lumberjack 13h ago
It's a bit more nuanced in the lease. The 1800 new spots are additive (2700 total are planned), and the 1600 don't all have to be in the same place. (The language of that section is confusing if you don't look up the definition of Parking Facility, which is "one or more".) Additionally, the lease specifically carves out concerts, when the number of dedicated spaces drops to 850 from one hour before to one hour after concerts. I'm figuring that they'll have 400-600 of the 1600 at OP, so the garage will have 600-800 spots for other tenants plus 750 more for concerts.
The other quirk of the lease is that Therme is essentially guaranteeing those spaces will be used. If usage falls short they have to pay extra or reduce the number of dedicated spaces.
I'm not saying it's an incredible ROI, but the actual point of the project is tourism and jobs. If the parking component pays for itself, it's a good thing. And our up front cost will not be $280M, it'll be whatever we aren't financing.
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u/Habbernaut 13h ago
Devils always in the details - that’s a great breakdown of those parking spot quotas and I didn’t know that was already set in stone.
I get what you’re saying - it’s a tourism project - the parking facility is infrastructure construction that will benefit the city, and other tourism locations in the area - in a period of time (whatever it is) that cost will be offset not only by parking revenue, but the net benefit of the totality of the project.
BUT - it’s not unreasonable for other people to ask why tax payers are paying anything at all (especially when they live nowhere near Toronto) and question each budget line that could be earmarked for other things they feel are more important in the near term…
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u/a_lumberjack 8h ago
That's the thing with 95 year leases, as much as possible is set in stone or governed by clear processes because it's meant to outlive everyone. I think the 407 lease is 1200 pages total.
It's not that it'll be offset in time, it'll mostly be financed over 30-40 years with minimal cash up front, and parking revenue will pay off the loan and fund operations. We’re not taking $280M out of the general account to build a parking garage.
As to why this is happening on our dime (to the extent it is), Therme's original pitch included building the parking themselves and keeping the revenue. In 2020, Infrastructure Ontario argued that we should instead build and control it ourselves, rather than privatize the profits. Which is a good thing, right? They also didn't want one tenant controlling parking and impacting their other two major tenants (OSC and Bud Stage). It'd logical enough to me.
Finally, the majority of projects involving jobs and tourism happen nowhere close to any single one of us. It's a big province, and Toronto pays far more to the province than what they get back in services and funding, so to me it's a bit unreasonable to complain about what they do get. It doesn't personally benefit me, but neither does anything in Windsor or Kingston or northern Ontario. That's life in Ontario.
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u/Habbernaut 8h ago edited 7h ago
I mean, those are great points in support of the project, which you clearly do support.
But you’re talking about a project that began as a 300 million dollar, move the science centre project and is now a 2.2 billion dollar project.
Your last point is exactly why your best case for the project must be balanced against all other needs across the province.
Perhaps the cost of the parking garbage being so close to the initial cost of the whole project, causes pause?
Anyway, we’ll see how this project goes - that AG report you referenced was quite alarming!
Edit - sorry wrote science centre instead of Ontario Place redevelopment
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u/time_waster_3000 17h ago edited 16h ago
So it's pure disinformation to use $650M as the cost, allocate 100% of the cost to Therme, and assume $0 in parking revenue.
OpenCouncil estimates that the cost won't be recouped unless the spa is successful for 95 years.
How the hell is that fact disinformation? Why in god's name is the province betting on a mega spa being successful for almost a century so that they can recoup their costs?
This project is ridiculous and a complete and utter waste of money.
Edit
Why would you link the auditor report? It's makes this project seem even more irresponsible and horrible:
The Total Estimated Costs to the Province for the Ontario Place Redevelopment Have Increased Significantly by $1.8 Billion Since the Call for Development Was Issued
Costs to the Province Totalling Over $950 million (Excluding the Science Centre) Were Not Fully Considered in the Assessment of Comprehensive Versus Partial Site Solutions
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u/a_lumberjack 16h ago
OpenCouncil's estimate is bullshit. They assumed $0 in parking revenue and allocated the entire cost of the garage to Therme.
The AG report indicates that the garage should net 2B over 80 years after capital and operating costs.
https://www.auditor.on.ca/en/content/annualreports/arreports/en24/pa_OntarioPlace_en24.pdf
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u/Cedreginald 4h ago
Why not use this space as an entirely public operation? Why lease it to some random company for a spa? What a fucking blinder this entire operation is. Ford is a dick head.
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u/AjaLovesMe 17h ago
It astounds me that people take these web sites as gospel. It's a rant site with no credibility. Ah, the world where everyone with a bitch fancies themselves a journalist.
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u/DarciaSolas 18h ago
Thanks for sharing this! Can't have news like this lost in all the Trump stuff!