Mayor John Tory says he is “surprised” by developer opposition to the Scarborough subway and believes the city will prevail in a fight at the Ontario Municipal Board.

The Star reported Thursday that the powerful lobby group for developers and builders — Building Industry and Land Development Association or BILD — is challenging the city at the provincial land appeals body over development charges for the future subway extension.

“I’m optimistic that we handled this entirely properly and that our case will prevail in front of the OMB,” Tory said following an unrelated news conference in Scarborough on Thursday. He added it is BILD’s right to appeal the development charges, which they say were brought in too quickly and unfairly tax new homeowners across the city for east-end transit.

“I think the important thing to keep in mind here is that when you build transit, the land interests of those who own land around transit increases. And I think it’s only fair that those who are going to benefit pay some of the costs of servicing this land with new transit. That’s the principle we operated on. We operated within the law and the appeal will take its course.”

In May, council voted to add new citywide development charges for the Scarborough subway, applied when a building permit is issued, despite pushback from BILD over the phase-in of the fees.

BILD’s president and CEO Bryan Tuckey told the Star that based on the projected ridership, the area would be better served by light rapid transit.

Those numbers are at the centre of a long-standing debate at city hall over what type of higher-order transit in Scarborough is needed to replace the outdated RT.

In 2013, council — led by subway champion Rob Ford — voted to scrap plans for the approved seven-stop LRT, fully funded by the province, in favour of a three-stop subway costing at least $3.56 billion.

Documents submitted by BILD in their appeal question the need for a subway and the ridership numbers used to calculate the development charges — which they say should be significantly reduced.

The city has to raise just under a third — some $910 million — to pay for the subway itself, not including future operating and maintenance costs. Council approved two funding streams: $745 million through a special Scarborough subway levy applied to all residents’ property tax bills for the next 30 years and $165 million expected to be raised through development charges.

Tory defended the new development charges.

“Those who are going to benefit from the increase in the value of land because you put transit or other services there paid for by the taxpayers, should pay a fair portion of the cost of doing that,” he said. “They are going to be the beneficiaries, ultimately, when they sell that land whether it’s in the form of condominiums or houses, and so I just think it should be fair, fair to everybody, fair to the developers but also fair to the taxpayers who otherwise end up funding all of this on their own backs.”

He said the city needs to be mindful of how development charges get passed down to home buyers, but called the new development charge a “modest adjustment.”