The case for a downtown Toronto casino just got harder for OLG chair Paul Godfrey to make — now that the commercial property company he chairs has come out against it.

Three of the city’s largest commercial property owners and developers — including RioCan, where Godfrey is chair of the board — want Toronto to abandon plans for a downtown site, saying it would cause more harm than good.

A letter sent to city manager Joe Pennachetti from the trio cautions against “taking a risk” and “potentially jeopardizing” the “success of our downtown.”

“In our view, the risk of the potential negative impacts from developing a mega casino in the downtown outweighs the potential benefits,” said the letter, which is signed by RioCan CEO Edward Sonshine, Allied Properties CEO Michael Emory and Diamond Corp. president Stephen Diamond.

As chair of OLG, Godfrey is not only the face of the organization, he’s been the one leading the casino crusade.

Reached on Tuesday, Godfrey downplayed the awkward optics.

“Look, that’s a management decision. Not a board issue. (Sonshine) made it quite clear to me that that’s what he thought, and that’s fine,” said Godfrey, who got a heads-up about the letter Monday.

“I’ve encouraged people on both sides of this issue to make their positions quite clear. If you’ve followed any of the speeches I’ve given, I’ve said until all the facts come in, one shouldn’t jump to any conclusions.”

Sonshine says the concern is not with the casino itself, just the traffic implications with a downtown site.

“It’s cars coming into the core. The big problem would be infrastructure issues,” said Sonshine. “I don’t think it’s in anybody’s interest to create something where a lot more vehicles are coming into the downtown core.”

OLG has said it is going to build a casino somewhere in the GTA, although its preference is Toronto — and ideally downtown.

The three most likely sites are: the Port Lands, Exhibition Place and the Metro Toronto Convention Centre. The latter option is what has spooked the three commercial property companies.

In mid-December, RioCan, Allied and Whitecastle (which is managed by Diamond Corp.) jointly purchased about 3 hectares of land at the foot of Spadina Ave., a few blocks west of the convention centre. The group plans to build a major multi-use development with as much as half a million square feet of retail and upwards of 950,000 square feet of office, plus some residential.

“We met about a month ago. (Stephen Diamond) said: You know, we’ve really got to take a position on this because if it’s built in the downtown it could have a really negative impact … on the traffic and eventually (these 3 hectares of land).”

Asked if RioCan’s concerns were valid, Godfrey said it’s impossible to know until the city has finished its report on the casino issue.

Pennachetti, who is leading the investigation, confirmed he received the developers’ letter, but he has not had time to review it.

“My key thing is to get all the input possible. I have to read this, see what their arguments are and digest all of this,” said the city manager. “There’s opinions that vary from one extreme to the other. This is what this issue is about. There’s a lot of pros and cons.”

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Among the potential pros is an estimated 6,000 construction jobs, 12,000 permanent “well paid jobs,” and a tourism boom, said Godfrey. Toronto also stands to earn a “hosting fee,” which an October report from Ernst & Young predicted could be as high as $168 million annuallyas high as $168 million annually. OLG has since pegged the amount in the $50 million to $100 million range.

Meanwhile, the Toronto Board of Health has released its second report on the health implications of building a casino. The first highlighted risks associated with addiction and problem gambling.

This one found that while a casino could have significant economic benefits, such as increased employment and income levels, the extra traffic could cause pollution-related illnesses.

Councillor Adam Vaughan, one of the leading opponents of a casino, couldn’t resist taking a dig at Godfrey.

“He couldn’t convince his own board,” said Vaughan. “They know that in the healthiest downtown of any North American city, dropping a casino in is like dropping a grenade in a crowded room.”