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Lastman overestimated subway fees, report says

By Gail Swainson
Toronto Star Metro Hall Bureau

Promises made last year by North York Mayor Mel Lastman that $73 million would be raised in development fees to build the Sheppard subway are as much as $62 million too high, a Metro report says.

“It sure isn’t the $73 million that some salesman said we were going to get,” Metro Councillor Howard Moscoe told council yesterday.

“Mayor Lastman is very enthusiastic when he’s trying to sell something and the rest of us are left to sweep up afterwards.”

Only $11 million in transit levies, a fee charged to developers who are putting up structures around the Sheppard line, will be raised by 2006 and the most that can be raised when the area along Sheppard is fully developed is $56 million.

That could take more than 50 years, say Metro staff.

This means taxpayers will be forced to shoulder higher costs than Lastman promised and his staff estimated, Metro council heard.

Metro treasurer Louise Eason says a report from Hemson Consulting Ltd. confirms that about $1 million a year is expected to be raised through the transit levy.

Sheppard will be finished in 2002 and the costs are being debentured over 20 years. Metro finance staff say the impact of the levy will be diminished for every additional year it takes to “build out” the area.

But an angry Lastman called Metro staff figures “crazy, insane.

“Those figures are way wrong, they don’t make any sense,” Lastman said yesterday. “Whatever our staff said, I stand behind.”

North York’s director of corporate finance, Joe Farag, agreed, saying that Metro staff adopted a “very conservative” stance when dealing with the development potential along Sheppard Ave.

Eason said North York figures are predicted on the future pace of development along Sheppard, mirroring that of the building boom of the late 1980s.

Last year, Eason called Lastman’s projections “very aggressive to the point of being risky.”

Yesterday, Metro council issued about $2.6 million in transit levy exemptions to developers who submitted applications before a scheduled deadline.

A move by Metro Councillor Norm Gardner to waive a further $15 million in fees was defeated. The move was supported by Metro Councillor Brian Ashton and Scarborough Mayor Frank Faubert.

Gardner said he is not surprised that taxpayers have been left holding the bag for the promised development fees.

“I never had confidence that development dollars would ever pay that kind of money for the subway,” he said.

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