Toronto School Board seeks creative solutions to financial woes

  • November 20, 2006
The Jolly Green Giant used to urge us all to "Look up, look waaay up." The Toronto Catholic District School Board is looking up into the air above some of it's old, crumbling and underpopulated schools and hoping to see some new money.
The board believes the money is there, but they can't get it without help from the City of Toronto. It's a vision that has inspired the Catholic school board to try to enlist Queen's Park help back up their quest for new money.

Of course, money doesn't fall from the sky. In Toronto, it comes from the development industry.

"The wealth of Toronto is sitting underneath us in our land," explains Bullet9 Toronto Catholic District School Board chair Oliver Carroll. He likens Toronto's real estate and development industries to Alberta's oil business.

The value of Toronto real estate could, potentially, make the air above Toronto's old schools worth millions. The right to fill that air space up with condos or office towers could translate into huge profits for a Toronto developer. The school board would like to auction those density rights off to the highest bidder.

But first they have to get the rights from the city, which controls zoning.The school board is calling this system of transferrable density rights, public-Catholic-municipal joint building programs, plus an increase in education development charges, the "Toronto solution."

So far Education Minister Kathleen Wynne isn't saying no to the school board's quest to generate new money out of old real estate. Wynne gave the green light to a team of bureaucrats reviewing the board's finances to look into the board's density rights scheme and report back to her on Nov. 30. She's talked to Carroll about the proposal and agrees its an idea worth looking into. Carroll hopes a positive report from the special assistance team would put Toronto's Catholic school board one step closer to a new revenue source.

"We have to find a way of getting a revenue stream out of those assets," Wynne told The Catholic Register.

Currently, schools are zoned for institutional use, or zoned for a density which reflects the surrounding residential neighbourhood. That limits their value on the real estate market. In practical terms, few school sites would be appropriate for high rise development. But if city planners would rezone the schools for the highest possible assessed value, the school board could theoretically auction off the density rights associated with the site to a developer. The developer would then transfer the density associated with the old school to another office or condo tower elsewhere in the city. The actual land the surplus school is sitting on could then be donated to the city and turned into a park after a new school is built to take in the displaced students.

With capital raised from density rights auctions, the three local governments could combine to build new public and Catholic schools, arenas, libraries, day care centres and other services all on one site with shared facilities.

Nothing about the Toronto solution will solve the Catholic school board's more immediate $34.6 million shortfall for this school year. But the school board does have a backlog of over $96 million in repairs and improvements to its aging stock of buildings, many of them now located in the wrong neighbourhoods far from where young families are settling in and looking for schools.

"The fact is, there are going to have to be some schools close," said Wynne.

Wynne issued new provincial guidelines for school closings Oct. 31.

That long list of unfunded capital projects isn't going to get shorter by fiddling with the numbers and redefining marginal improvements, said Toronto Catholic trustee Catherine Leblanc-Miller. Old, expensive-to-operate buildings are going to continue to dog the school boards' budgets until new, modern facilities are built, she said.

"We both (Catholic and public school boards) have significant backlogs in our facilities with respect to roofs, windows and boilers even before we get to buildings that absolutely have to be replaced," she said.

Since the provincial education funding formula was changed in the 1990s, the economics of running small neighbourhood schools, many of them with declining enrollments, has squeezed the budgets of both school boards.

And it isn't just the two school boards that have a problem with outdated physical plant. The City of Toronto has also lacked the means to renew its stock of old community centres, libraries, arenas and more, Mayor David Miller told The Catholic Register.

"The city's finances have to be addressed. Both the school boards and the city under the previous provincial government, their financial structures were decimated. And neither of us are in the financial shape we should be," Miller said.

So Miller is all for a partnership among the school boards and the city on new capital projects.

"That's about city building at its best, but we have to unite," he said. "Both the school board chairs and I are in complete agreement on this."

But Miller is more interested in an alliance that would lobby the province for more money than he is in new ways of getting money out of Toronto's developers. The message to Premier Dalton McGuinty: "It's also time to fix the funding formula and upload the services that were downloaded," said Miller.

Both Miller and Carroll are counting on the political pressure a looming election will create in 2007.

The development industry has always looked on development charges as poison, and is not likely to greet the Toronto Catholic board's proposals for new development charges on construction as well as on transfers of land with much favour. But the condo kings wouldn't slam the door on density transfers - if the city is willing to shoulder the political risk.

"It's fraught with problems," said Greater Toronto Home Builders Association vice president of policy Neil Rodgers. "The development community, I would argue, will not be sympathetic to this proposition until such time as all of the political and land use risks are out of the way. We will not buy risk."

That is to say, nobody wants to buy density rights only to find themselves in a war of attrition with community groups dragging the developer through city council meetings and the courts. But if the city can commit to clear rules for a density transfer market, it just might work, said Rodgers.

"I wish them luck, because I think it's about time we had some out-of-the-box thinking," he said.

From a city planning perspective, density transfers might make sense, said Ryerson University urban planning professor David Amborski.

"When you rezone property to give higher density you're actually giving away development rights for free. The argument here is, if you want higher density in that area, go buy the rights from somebody," said Amborski.

Transferable density rights have been tried in other jurisdictions, and at one time were allowed in downtown Toronto. Enshrining them into the planning process could free up money for new investment into city infrastructure, but the tough question is who gets the money - the city or the school boards.

It's an interesting discussion in theory, but Toronto's chief planner wonders why nobody's talking to him.

"If there's been a discussion going on it hasn't been going on with me or anybody in city planning that I'm aware of," Ted Tyndorf, head of the city's planning department, told The Catholic Register.

Tyndorf has talks scheduled with Toronto's public board about making better use of schools as community assets, but has yet to hear from anyone at the Toronto Catholic District School Board.

The idea of the school boards working together or working with the city is not new, and something Tyndorf would like to encourage. St. Marcellus School next to Denfield Park in Toronto's west end is an example where the city invested in the school and now runs parks and recreation programs out of the building.

But Tyndorf warns that transferable density rights is a whole different can of worms.

"What it ends up doing is creating a kind of anomalous development in areas that weren't originally envisaged as having that kind of intensity," Tyndorf said.

Taking another 400,000 square feet of theoretical density from a school, and then making them real in a neighbourhood that has none of the services from transit to police to support the additional households is just not good planning. It's why the pre-amalgamation City of Toronto dropped its program of limited transferable density rights years ago, he said.

"The city is going to have to see that it got something in exchange for basically agreeing in advance to certain zoning levels, and certain density transfer levels," said Carroll.

The Toronto Catholic School Board already has extensive ties with the city, including a partnership agreement on day cares in the schools, a seat on the city roundtable on children, education and youth and a seat on the mayor's community safety task force. Old animosities between the public and Catholic school boards in Toronto have also eased, and few today would regard cooperation between the boards as a threat to the Catholic identity of schools.

"People have to trust that we (trustees) also recognize that we always have to maintain our separateness as a Catholic board," said Leblanc-Miller. "Whenever we're partnering with anyone we have to be sure we're not compromising who we are and what we are."

Putting two school buildings on the same property and sharing the sports field, or putting two schools in a single building with separate entrances and a common library and athletic facilities in the middle are solutions that have worked in the past, Leblanc-Miller said.

Meanwhile Carroll is hoping for public debate to propel the Toronto solution forward into the 2007 provincial election.

"We need the government - by that I mean the provincial government, the Liberal government - to look at this as a legacy issue from their perspective," said Carroll. "To say, if we go along with what these people are suggesting, if we help lay out the rules and the platform they will operate on, we may leave in place not only renewed schools but a community system."

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