What’s really behind the Ford government’s push to pave protected wetland in Pickering?

Roughly half of this property in Pickering, owned by Triple Group, is classed as a protected wetland. If approved for development, commercial real estate analysts say it would skyrocket in value, potentially to more than $100 million. This view looks northwest from the corner of Bayly Street and Squires Beach Road. -CBC photo

Ajax vs Pickering as rival developers compete to host Canada’s biggest retail warehouse, which sources say is for Amazon

By Mike Crawley · CBC News ·

Moves by Premier Doug Ford’s government to grant special permission to pave over a protected wetland in Pickering have generated headlines, but behind the controversy, there’s an untold story.

That story involves a battle between rival developers and rival municipalities to get the chance to build what would become the largest retail warehouse in Canada, a project worth hundreds of millions of dollars that multiple sources say is for Amazon.

The battle is playing out just east of Toronto near Highway 401, on two pieces of property less than one kilometre apart: one in the city of Pickering on a provincially designated wetland, the other in the town of Ajax on a golf course.

Whichever site clears all of its legal and zoning hurdles first will be in the driver’s seat. The landowner’s property value will skyrocket and the project will bring at least $50 million in new tax and development revenue to one of the municipalities.

While the Toronto Region Conservation Authority (TRCA) has vigorously objected to plans to build on the wetland in Pickering, it is not opposed to the plan for the golf course in Ajax.

However the Ford government has gone to great lengths to smooth the way for the warehouse to go on the Pickering wetland. That property belongs to the Triple Group of Companies, owned by the Apostolopoulos family, backers of the nearby Durham Live casino complex.

The government issued a ministerial zoning order last fall to fast-track the project. In December, it reduced the power of local conservation authorities to block development on wetlands. Last week, it introduced legislation to rewrite provincial law retroactively to bolster its case against environmental groups trying to persuade a court to scupper the development.

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The battle could soon reach its climax. The province has ordered the TRCA to issue Triple Group a development permit for the Pickering wetland by Friday.

The Triple Group is offering to give the TRCA $3.5 million plus a 38-hectare agricultural property about 12 kilometres to the north in exchange for the destruction of the wetland. TRCA says the compensation is inadequate because a maximum of five hectares of wetland could be created on the agricultural property, barely one-quarter the size of the wetland that would be paved over.

The TRCA estimates the value of industrial property in Durham Region at $600,000 per acre. However, research by the commercial real estate firm CBRE shows that the average price of industrial land in the Greater Toronto area has soared to $1.6 million per acre.

That means Triple Group’s property — currently worth little since at least half of it is a protected wetland — would skyrocket in value to anywhere from $50 million to $136 million once approved for development.

Triple Group is meanwhile trying to stymie the Ajax landowner’s chances of becoming the host of a huge distribution centre by launching a legal appeal against the town’s rezoning of its golf course property.

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Neither of the developers would reveal the company that wants to build a distribution warehouse on their site. Both mayors said they do not know the company involved. However, sources familiar with the projects tell CBC News that it’s Amazon considering the rival bids.

“We are not commenting on our future roadmap, including specific operations plans,” said Dave Bauer, head of communications for Amazon Canada, in an email to CBC News Wednesday.

The Ford government’s efforts to have the warehouse built on the marsh in Pickering — when there is a suitable site available only a few hundred metres away in Ajax — are vexing for Shaun Collier, the mayor of Ajax.

“The right way to do it is follow the rules. The rules are in place for a reason, and that’s to protect the environment, to make sure things are done properly,” Collier said in an interview. He said the government’s approach has been “the absolute wrong way to do it.”

Asked if he feels the government is playing favourites, Collier replied, “I don’t even think I need to answer that, I think the actions speak louder than words.”

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A spokesperson for Municipal Affairs Minister Steve Clark denies the government is favouring the Pickering site.

Pickering Mayor Dave Ryan criticizes the Town of Ajax for what he describes as a campaign against the plan to build on the wetland.

“I think it’s very unfortunate when municipalities try to undercut one another, and that’s obviously what has been happening here,” Ryan said in an interview. “These types of tactics are not helpful. They’re disruptive and they bring no credit to anyone.”

Asked whether he knows if the two developers are courting the same retail company, Ryan replied, “I really have no information that would allow me to make a comment one way or the other on that. But the similarities are obvious.”

Publicly available documents show the two proposals for a distribution centre are similar. The square footage proposed for each dwarfs all existing retail warehouses in Canada.

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Experts in commercial real estate say only a handful of companies worldwide would be looking for so much space, and they doubt that two different companies would each be looking to build a massive warehouse at the same time so close together.

The Ajax property is currently the home of the Annandale Golf Club. Documents filed with the town show a proposal to put a 2.7 million-square-foot, five-storey distribution centre on about 24 hectares of the golf course land for an unnamed “Fortune 50 tenant.”

“Given the accelerated growth of e-commerce across Canada, the intended Fortune 50 tenant has experienced tremendous growth,” says a letter, obtained by CBC News, from the landowner, Annandale Park Developments Ltd. to Municipal Affairs and Housing Minister Steve Clark.

The letter estimates the value of the warehouse at $600 million. Such a project would bring an estimated $48 million in development charges to the Town of Ajax. To put that in context, the municipality’s entire operating budget for 2020 was $71 million.

Annandale has a conditional deal in place to sell the relevant part of the land to Crestpoint Real Estate Investments., which in turn would be the developer of the distribution warehouse for what the letter calls the “highly successful” Fortune 50 company.

Province greenlights controversial Pickering development on protected wetland using special order
Just a few hundred metres to the west in Pickering lies the wetland where landowner Triple Properties wants to put a similarly large distribution warehouse. The Triple Group is the real estate developer behind the nearby Durham Live project, a $1 billion casino, performing arts centre, film studio, hotel and restaurant complex that is already partly constructed.

The company dubs the distribution warehouse on the 34-hectare parcel “Project Lonestar.” A letter from its planning consultant to the City of Pickering describes the project as “an approximately 850,000- to 4-million-square-foot distribution centre [for] a very large employment user.”

The letter says the investment would exceed $100 million, would create up to 4,000 jobs and would bring as much as $80 million worth of development charges to the municipal government. Pickering’s entire operating budget for 2020 is $69 million.

Triple Properties, through its Durham Live subsidiary Pickering Developments, recently launched a case at Ontario’s Local Planning Appeal Tribunal, objecting to the town of Ajax’s zoning approval for Annandale’s golf course property.

The effect of the appeal is that Triple Group’s rival for building a distribution centre is now bogged down in a legal process that could take months.

Officials with Triple Group declined CBC’s request for an interview and did not respond to an invitation to provide a statement by email.

Elliott Altberg, executive vice president of Crestpoint Real Estate Investments, the would-be developer of the Ajax site currently owned by Annandale, said the firms are hoping for a level playing field and are working with the government to try to resolve the appeal.

“Hopefully, we can do that in as expeditious fashion as possible, and we have full faith that we will be treated fairly in this process,” Altberg said in an interview Tuesday.

“All the steps that were needed to be done for a normal development process have been completed, and the only thing that is stopping us is the neighbour [Triple Group] and the Town of Pickering,” said Altberg

Annandale and Crestpoint asked Clark in February for a ministerial zoning order (MZO) for the Ajax development to disentangle the land from the appeal. In its letter, the company asks Clark to issue the order quickly “to achieve the aggressive construction schedule … in accordance with our tenant’s development timeline.”

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The government issued six MZOs for properties in the Greater Toronto Area on Monday night, but not for the Ajax development.

“We’re proud to announce that we have MZOs, because it’s about the economy,” Ford said in question period Tuesday. “I want more MZOs to stir the economy, to get jobs out there.”

A spokesperson for Clark said his ministry is in early discussions with the proponent of the Ajax site about the request.

“Given the mayor and Town of Ajax’s strong opposition to the Durham Live development, which is adjacent to the Annandale golf course development, the government was surprised to receive their request for an MZO to develop on the lands where Duffins Creek directly runs through,” said Clark’s director of communications, Adam Wilson, in an email to CBC News.

“It is our belief that they would have wanted to turn these lands into a new wetland,” said Wilson.

The proposed site on the golf course in Ajax is indeed closer to Duffins Creek than the proposed site on the wetland in Pickering. However, the Ajax rezoning has the blessing of the Toronto Region Conservation Authority, as the proposed development would be set back from the creek and would not pave over existing wetland.

Collier, the Ajax mayor, said he doesn’t know if the company wanting to build a massive warehouse in his town is the same as the company that wants to build a similarly sized warehouse in Pickering.

“If I am a Fortune 50 company and I’m looking to relocate and there’s two sites within about a half a kilometre of each other, I’m probably not going to pick the one that’s a provincially significant wetland with all this controversy right now,” said Collier.

Ryan, the Pickering mayor, countered that the wetland is degraded and that the owners are promising to replace it with new wetland elsewhere.

The warehouse development “is extremely important for the community as a whole,” Ryan said. “This is an opportunity to bring 2,000 jobs to the city of Pickering and bring them expeditiously.”

Both prospective developers already have links to Amazon.

The Triple Group of Companies bought the 50-hectare site of the former Silverdome in the Detroit suburb of Pontiac, Mich., back in 2009 for the price of $583,000 US. That property is now the location of a $250-million US Amazon distribution centre. According to county building permit records Triple Investment Group is no longer listed as registered owner of the Silverdome lands and the company doesn’t mention it on the website promoting its properties. .

Crestpoint Real Estate Investments is already building a fulfilment centre for Amazon in Ajax, about six kilometres northeast of the golf course property. It also owns an industrial park in Surrey. B.C. where Amazon is a major tenant.