The title above is not a rhetorical question. Rather, this is a question that recently faced the Ontario Municipal Board in Dorsay Investments Limited and 1666500 Ontario Inc. v. City of Toronto (OMB Case No. PL070048), a case involving a proposed redesignation of lands designated for employment uses to allow a mixed-use development containing a substantial residential component.
The hearing arose from an appeal of an application to amend the City of Toronto Official Plan by redesignating lands at 2205 Sheppard Avenue East from "Employment Areas" to "Mixed Use Areas", in order to permit a proposed mixed-use development consisting of approximately 900 residential units, a daycare centre and more than 3,000 square metres of retail and commercial space. The new development was also proposed to be integrated with an existing office complex of more than one hundred thousand square metres on surrounding lands also owned by the applicants.
One of the fundamental issues raised by the City of Toronto in the hearing was whether the application conformed to the Growth Plan for the Greater Golden Horseshoe and was consistent with the Provincial Policy Statement (PPS). The City contended that the application constituted a conversion of an "employment area" (as defined in these two Provincial documents) to non-employment uses in the absence of a (municipal) comprehensive review and should therefore be refused.
Both the Growth Plan and the PPS define "employment areas" as "areas designated in an official plan for clusters of business and economic activities including, but not limited to, manufacturing, warehousing, offices, and associated retail and ancillary facilities". There was no dispute among the parties that the subject property was designated as "Employment Areas" in the City's Official Plan, and that this land use designation did not permit residential uses, either as a stand-alone use or as one component in a mixed-use development.
However, in addition to its land use designations, the City's Official Plan also includes an urban structure map that identifies various key structural components of the City's land base. Among these broad structural elements are Avenues, which are identified as "important corridors along major streets where reurbanization is anticipated and encouraged to create new housing and job opportunities…", as well as Employment Districts, which are identified as "large districts comprised exclusively of lands where the Employment Areas land use designation applies" and "will be protected and promoted exclusively for economic activity". In describing these structural components more generally, the Official Plan also identifies both as "growth areas", but clearly distinguishes them by stating that "the mixed use Avenues will emphasize residential growth, while the Employment Districts will focus on job intensification".
Although most of the lands within the City of Toronto that are designated as "Employment Areas" fall within the Employment Districts, approximately 9% of the lands designated as "Employment Areas", representing roughly 660 hectares scattered throughout the entire City, are not located within the Employment Districts as shown on the City's urban structure map.
In this case, there was no dispute that the subject property was within the Avenues and immediately adjacent to an Employment District. There was, however, disagreement as to the applicability of the Employment District policies, with the City contending that because the subject property was adjacent to an Employment District and the underlying land use designation was "Employment Areas" the long-term employment objectives of the Employment District policies should apply.
Meanwhile, the applicants' assertion was that the protections afforded to "employment areas" in both the PPS and the Growth Plan were intended to apply to those larger, strategic employment areas that have been identified for a municipality's long-term employment objectives, which, in the case of the City of Toronto, equate to those lands within its Employment Districts and not all lands that might simply carry an "Employment Areas" designation. In other words, in this case, although the lands were designated in the Official Plan as "Employment Areas" the applicants contended that the property did not constitute an "employment area" for the purposes of the PPS and Growth Plan.
In the end, the Board accepted the applicants' position, concluding that although the subject property was designated as "Employment Areas" in the City's Official Plan it was not an "employment area" as defined by the PPS and the Growth Plan, and was therefore not subject to the so-called conversion policies in those documents. Accordingly, the Board determined that it could consider the proposed redesignation of the lands without the need for a (municipal) comprehensive review. Having made this determination, the Board then proceeded to assess the merits of the application relative to all other relevant planning considerations and ultimately concluded that the application to redesignate the site from "Employment Areas" to "Mixed Use Areas" warranted approval.
The City subsequently requested a review of this decision by the OMB Chair, alleging that the hearing panel had erred by misunderstanding and misapplying the Avenues policies in the Official Plan, such that the Board had elevated these policies to a level equal to, if not superior to, the land use designation policies and, in doing so, erred in concluding that the subject property did not constitute an "employment area" for the purposes of the PPS and Growth Plan.
In a decision issued November 24, 2009, the Board denied the City's request for a review of the original decision, concluding that the City had failed to meet the threshold to warrant a review, that the request was simply an attempt to re-argue issues that had been canvassed and decided at the hearing, and noting that the Chair would not, in any event, have reached a different decision.
The story, however, does not end there. The City has now sought leave to appeal the Chair's decision to deny its request to review the original decision and to dismiss the applicants' appeal, with a hearing before the Divisional Court anticipated in the spring of 2010. Stay tuned.
Mark R. Flowers, Partner, Davies Howe Partners - Counsel to the applicants, Dorsay Investments Limited and 1666500 Ontario Inc.