suburban office parks

Mixed uses to ease into suburban office parks

Proposed tweak to GGH Growth Plan opens way for non-employment infill
Tuesday, January 29, 2019
By Barbara Carss

Suburban office parks could be opened up for modest amounts of mixed-use development if a proposed new policy is enacted in the Growth Plan for the Greater Golden Horseshoe (GGH). The measure is among the plethora of Growth Plan amendments the Ontario government recently released for public comment, and would unlock opportunities that many developers now deem to be effectively impenetrable.

“Employment lands are protected and preserved so you can’t even propose non-employment uses no matter how impractical or obsolete those areas might be (for employment) or what the market demand is,” observes Mike Czestochowski, executive vice president of CBRE’s land services group.

Currently, prospective developers must rely on a single or upper-tier municipality in the GGH — for example, Toronto, Hamilton, Peel or York Region — to undertake a multi-step municipal comprehensive review (MCR) process before an employment area can be re-designated to accommodate non-employment land uses. In practice, that’s most likely to occur as part of the Official Plan review that municipalities conduct at approximately five-year intervals. Regardless, it’s a complex, time-consuming exercise that requires numerous supporting studies, public consultation and Provincial approval.

The proposed new policy is expressed in terms that might be read as a restriction, stating: “Existing office parks will be supported by ensuring that the introduction of any non-employment uses, if appropriate, would be limited and would not negatively impact the primary function of the area.” However, it’s actually loosening the rules.

“The new amendment is saying you can introduce non-employment uses, to a certain degree, without having to go through the MCR process,” explains Emelie Rowe, a planner with CBRE’s land services group.

Broadening interpretations of policy intent

This goes beyond the existing allowance for “an appropriate mix of amenities and open space to serve the workforce” to potentially make way for an expanded range of ventures for a wider customer base. The current Growth Plan gives local municipalities the flexibility to either prohibit big-box retail within employment areas or allow a controlled amount, capped at a maximum threshold, while residential uses are prohibited outright. The new policy would give developers a basis to challenge any local government’s veto of non-employment land uses in suburban office parks.

“A lot of this wording might seem like simple semantics, but any review at what was formerly known as the Ontario Municipal Board (now the Local Panning Appeal Tribunal) is, in essence, a legal cross-examination of intent and expectations of policy,” advises Dan Leeming, a senior advisor with the consulting firm, The Planning Partnership, and an adjunct professor at the University of Guelph’s School of Environmental Design. “Many of the amendments would leave it a little more open to interpretation than it had been.”

In any case, supporters of the proposed new policy maintain it’s aligned with the Growth Plan’s goals for intensification and “complete communities” that provide social and economic opportunities, support healthy lifestyles and use resources efficiently. Toronto’s inner suburban rings seem particularly well placed to deliver that vision.

“People like to live close to where they work today. As we add residential, the employment uses get more vibrant, and it would be adding other uses like hotels, restaurants and retail that also provide jobs,” Czestochowski submits. “In mature markets in the 416 or even the 905, the office parks might be getting a little long in the tooth, but a lot of them have good transit connections and are ripe for redevelopment or some strategic infill. I think we’ll have more institutional investors and landlords looking at the possibilities.”

“Developers would be interested in any office park where there is good transportation access, and owners would be amenable to anything that could add value to their site, including retail,” concurs Keith Reading, director of research with Morguard.

Redefining employment areas

A relatively innocuous tweak in suburban office parks is just a small piece of the Ontario government’s revised approach to employment lands. That’s defined in the amended Growth Plan’s explanatory notes as: “A modernized employment area designation system that ensures lands used for employment are appropriately protected, while unlocking land for residential development.”

Issues related to preserving industrial lands or, more fundamentally, how to define “employment uses” are likely to capture greater attention and/or spur more debate. As automation steadily shrinks manufacturing’s human workforce, other business interests are calling for a more representative share of protected lands.

“We’ve talked about expanding the definition of employment areas to include retail, which generally employs more people than industrial, but doesn’t typically qualify,” says Michael Brooks, chief executive officer of REALPAC, representing many of Canada’s largest commercial real estate companies and institutional investors. “Potentially allowing commercial-residential zoning in some of these areas would make a mixed-use complete community possible. It would help the housing crisis the Province says it wants to address, and maybe some workers could avoid having to drive a car.”

Barbara Carss is editor-in-chief of Canadian Property Management.

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