Enquiry into the Section 37 Agreement for the Historic Mimico Train Station

The Issue

A community group called Mimico Station Community Organization (“MSCO”) began a project in 2004 to relocate and restore a historic train station originally built by the Grand Trunk Railroad in 1916 (the “Station”). MSCO hoped to complete the work by 2016, in time to celebrate the Station’s 100th year.  

In late 2008, a condominium developer submitted a rezoning application to allow it to build condominium units on a property across from the City of Toronto park into which MSCO had moved the Station. City staff recommended that City Council approve the application as well as a Section 37 agreement between the City and the developer. 

A Section 37 agreement may be used when a developer wishes to add height and/or density to a given project, as long as the proposed development constitutes good planning. The developer undertakes to contribute some negotiated form of community benefit, such as park improvements or public art, either through cash or in-kind. In this case, the negotiated benefit was that the developer would rehabilitate the Station, including the interior and exterior. The Section 37 agreement required the developer to give the City a Letter of Credit to cover the work and create a Rehabilitation Plan based on MSCO’s Heritage Impact Statement before the City would give site plan approval. 

The City gave site plan approval in July, 2016 without having received either the Letter of Credit or the Rehabilitation Plan. The developer went into receivership in February 2017. The development property was then sold to a new owner. The Station currently sits empty and is structurally unsafe.

Our Enquiry

As a part of our Enquiry, we:

• Requested and reviewed extensive documentation from the City Planning and Parks, Forestry and Recreation (“PF&R”) divisions, and from MSCO.
• Interviewed representatives of MSCO and staff from the City’s PF&R and City Planning divisions, including employees in Community Planning and Heritage Preservation Services (“Heritage”), both units within City Planning, as well as the Ward Councillor.
• Conducted a site visit at the Station.

What We Found

An Enquiry by Ombudsman Toronto found that three issues caused or contributed to problems that arose when the City attempted to implement the Section 37 Agreement: poor communication, failure to enforce the terms of the Agreement, and failure to adequately resolve implementation issues.

Our Recommendations

Ombudsman Toronto made a number of recommendations to prevent problems with Section 37 agreements in the future. These include:

• Assigning a staff lead to all future Section 37 agreements, with clearly outlined responsibilities from the time of negotiations to the completion of the community benefits.
• Where a community organization is involved, the organization’s role should be explicitly stated in the agreement and the City should consult with the community organization and keep it up to date on the project’s progress.  
• City’s Parks, Forestry and Recreation division, with other City staff as needed, formulate a plan for future use of the Station and present that plan to City Council’s Parks & Environment Committee in early 2019.

The City’s Response

The City agreed with all the Enquiry’s findings, accepted all the recommendations and has begun to implement them. Ombudsman Toronto will follow up on the implementation of its recommendations.