Metrolinx will rely on the private sector to fund the construction of new GO Transit stations, in a shift in strategy that could reduce public costs, but subject the timing and delivery of public transportation infrastructure to the vagaries of the real estate market.

A brief report that will be discussed at the provincial transit agency’s board meeting next Thursday recommends the board adopt a “market-driven strategy for the implementation of transit infrastructure.”

It calls for the public agency to partner with third parties such as private developers, who would fund the design and construction of stations and other infrastructure in exchange for benefits such as the right to build their own projects on the station sites.

Metrolinx argues this type of “transit-oriented development” would allow the agency to “reduce the funding required from the province for transit expansion,” while also providing transit stops with built-in ridership.

In October the agency revealed plans to partner with a private developer to construct a new station building and other amenities at the Mimico GO stop. In exchange building the facilities, the Vandyk Group, a Mississauga-based developer, will erect a mixed-use development on the site. The company and Metrolinx have yet to release details of the new development.

The province is now expanding that approach to all future projects, including 12 new GO stations being built as part of the GO Transit regional express rail plan. Eight of the stops are within Toronto, and six are considered part of Mayor John Tory’s SmartTrack plan.

A request for qualifications to build the stations and related facilities was issued in March, but Conservative Transportation Minister Jeff Yurek has ordered it withdrawn. The report going to the Metrolinx board next week recommends directing the agency’s CEO Phil Verster to undertake negotiations with third parties to advance the station construction instead.

While touting the benefits of the market-driven approach, the Metrolinx report notes that it comes with risks related to project timing and real estate market conditions.

“As this is a market driven approach, we expect the stations will be delivered based on market demand, which means they could be delivered sooner or possibly later,” said Metrolinx chief planning and development office Leslie Woo in an email.

Stations under regional express rail plan had been scheduled for completion by 2025.

Asked what will happen if no developers come forward to build on some sites, Woo said the agency believes “there is a strong market demand for this approach,” but the new strategy “does not affect the government’s decision-making prerogative to fund or build transit infrastructure,” should it choose to do so.

Metrolinx would not say how much money the strategy is expected to save the government, but each new GO station can cost upwards of $100 million.

In April, city council approved spending up to $1.46-billion on the SmartTrack stations in Toronto. It’s not clear what will happen to that funding if it’s not needed under the new model.

“City staff will be reviewing the implications of this approach,” said Don Peat, Mayor Tory’s spokesperson, in an email.

“This could potentially allow us to move more quickly, more cost-effectively and be more nimble in many cases, when it comes to station construction. This could also help achieve our other objectives, like intensification on those sites and building more affordable housing.”

Jessica Bell, MPP for University-Rosedale and the transportation critic for the Ontario NDP, said the opposition party supports transit-oriented development in theory.

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“But transit-oriented development needs to factor in the fact that we have an affordable housing crisis in our region. New developments should have an affordable housing component so families and lower income people can afford to live in our cities,” she said. “I don’t see that here.”

Woo said that any new transit development would be subject to municipal planning rules, which set out requirements for affordable housing.

Ben Spurr is a Toronto-based reporter covering transportation. Reach him by email at bspurr@thestar.ca or follow him on Twitter: @BenSpurr

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