Bombardier Inc. is selling its sprawling Downsview manufacturing site to a public sector pension board for a whopping $816 million, prompting local officials to demand assurances that lost jobs will be replaced by new ones at the site.

But Canada’s biggest aerospace firm isn’t packing up just yet. Its sale of the 148-hectare site to the Public Sector Pension Investment Board includes a lease agreement that will see Bombardier remain there for up to three years after completion of the sale, plus two optional one-year extensions.

Bombardier, which has about 3,500 workers at Downsview, also revealed Tuesday it has signed an agreement with the Greater Toronto Airports Authority for long-term lease of a site at Pearson International Airport to build an assembly plant for Global business jets.

The Public Sector Pension Investment Board, which manages almost $140 billion in assets for retired federal employees including Canadian Armed Forces and RCMP personnel, is keeping any plans for the Downsview property, north of Wilson Blvd., under wraps.

In a statement, chief executive Neil Cunningham called the deal “a perfect fit for PSP as it supports our long-term real estate investment strategy,” and track record with “large complex projects.”

The news release noted the land is “surrounded by world-class research and innovation centres and benefits from proximity and connectivity” to highways and a new TTC subway station.

The board’s real estate managing director, Kristopher Wojtecki, said executives “look forward to listening to and collaborating with all stakeholders in Toronto, Ontario and Canada.”

Maria Augimeri, the city councillor for the area, welcomed the new owner, saying pension plans typically make long-term investments rather than “flipping something for a fast buck.”

“I’m surprised they paid as much as they did,” Augimeri said of the deal, adding the new owner has not shared any plans for the site, which is designated “employment areas” — commercial uses including manufacturing, but not residential — in the city’s official plan and secondary plan.

Early sales talk suggested the land could host a lucrative residential component, she said, adding any attempts to get the land rezoned residential would be shut down by city hall.

“The employments lands are the backbone of the city of Toronto’s tax base. We would lose much more (in commercial tax revenues) than the value of the property if the lands were to be converted” to homes, said Augimeri, who is running in Ward 9 for re-election in the October 22 civic vote.

Augimeri plans to tell the Public Sector Pension Investment Board its land should be combined with adjacent federal property to create a high-tech manufacturing and office hub, with long-term leases for innovative companies already banging on her door to move to Downsview.

Mayor John Tory told reporters Thursday the city was not involved in the sale but “will be involved in what happens in the future.” He supports the policy to keep the site for jobs and noted any attempts to change that would have to go through the “normal” city process.

One commercial real estate expert, however, said “mixed use” development — high-density residential, office and “flex space” industrial — makes the most sense for a site so well served by highways and public transportation.

“You are going to attract office tenants with the transit and I can see what people wanting to live on the subway,” said Mike Czestochowski, executive vice-president of the land services group of CBRE Canada.

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“When you pay that kind of money, the economics work a lot better when you can get some mixed use out of it, and it makes for a more dynamic community with people living and working there,” said Czestochowski, who was not involved in the sale.

If condos can’t be part of the mix, Czestochowski said the pension board’s next best plan could be attracting and building for big office tenants, given that Toronto has a shortage of contiguous large-scale offices.

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