Ford government releases Ontario Place lease, including rent and parking details

The Ford government has finally released the terms of the lease it signed in 2022 with the Austrian company responsible for building a massive waterfront spa at Ontario Place, including rental payments that will be based on the company’s revenues.

Infrastructure Ontario published the lease it signed with Therme on Thursday, with the government touting the benefits it claims the deal will bring for taxpayers and underscoring the fact the public land has been lent to the spa company, not sold.

Details of the lease, first reported by Global News last year, show the government has agreed on a 75-year deal with Therme, with the option to extend the deal by a further 20 years. The lease is set to begin in 2025.

“Our government is proud to have Therme Canada as a development partner on this once‐in‐a‐generation project,” Kinga Surma, Minister of Infrastructure, who was not available for questions about the lease on Thursday, said in a statement.

As the government had previously highlighted, the deal won’t allow Therme to run a shopping mall, casino or condo towers at the Ontario Place site.

The company is also set to pay full property taxes to the City of Toronto.

The government estimates Therme will pay close to $2 billion over the course of the 95-year lease, including rental payments and maintenance payments for the land.

Therme is expected to pay $1.1 billion in rent payments while it runs a waterpark and spa on the site, and it is also committed to a further $855 million in maintenance payments to the government.

Therme is tied to two rent payments, the lease suggests.

The first, minimum rent, will be 3.5 per cent of the assessed value of Ontario Place, indexed to inflation and estimated to be $1.95 million in 2032.

In years when the company brings in higher revenues, beginning in 2034, it will also pay a so-called performance rent, which the government calculates could be an extra $2.07 million per year.

Between 2034 and 2044, the government expects Therme to pay $84 million: $47 million in rent and $37 million in maintenance payments.

The lease also confirms the government agreed to provide Therme with at least 1,800 parking spaces, with plans to build a garage with a total of 2,500 spaces.

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If the government fails to provide parking in time for Therme to open, potentially in 2030, then it is set to pay a penalty of $5 per space, per day, with the total fee around $2.2 million for every year it doesn’t have parking in place.

Infrastructure Ontario said the lease means the government can use temporary parking within 650 metres of the site while it builds the new garage, but it hopes to build the parking lot before the spa begins operating.

Huge questions remain over where the parking garage will be located. The government originally planned to build the parking underground beside the lake but more recently Ontario Premier Doug Ford has mused about building the structure on the grounds of Exhibition Place.

“We haven’t confirmed the underground parking space because it costs so much to build underground,” Ford said in July. “We’d like to build as much on top without prohibiting the view.”

Those conversations, Infrastructure Ontario said Thursday, are still ongoing.

During its release of the lease, the Ford government was at pains to stress the public parkland benefits the deal would bring.

In the lease, Therme has committed to creating almost 16 acres of new parkland facility, which amounts to roughly 20 football fields. The new parkland, the province said, would more than double the size of Trillium Park, which currently sits at the site.

Therme has also committed to maintaining free public access to the entire shoreline. The government said Therme is spending around $200 million on parkland, while the facility itself is meant to cost about $500 to build.

While the government is adamant that those benefits will be provided by Therme and that it won’t help the company with its construction costs, public money has already been spent on the site.

Government officials touted the benefits of Therme’s project, including $294 million toward Ontario’s GDP, 2,000 jobs during the construction phase and $84 million in revenue to the province from Therme for rent and maintenance payments from 2034 to 2044.

On Thursday, Infrastructure Ontario CEO Michael Lindsay said the government had spent “hundreds of millions” to get the site ready for the private company to build.

That includes cutting down trees, which Lindsay said has started now that it is October because birds and bats are no longer in their nesting season.

“All trees are replaced at a two-to-one ratio, and mature trees are going to be replaced at a six-to-one ratio,” Lindsay said. “The net effect of all this is 1,300 additional trees.”

After answering the question about tree removals, the moderator of the technical briefing cut in to say officials would be taking no more questions on trees.

Why the Ford government decided to release the contract with Therme more than two years after it was agreed is unclear.

Officials with Infrastructure Ontario were ordered to begin work on releasing the contract roughly two weeks ago by the Ministry of Infrastructure, which ultimately controls the political decision.

“When Infrastructure Ontario received direction from the ministry to release the lease? We’ve been planning to do so for the past couple of weeks,” Lindsay told reporters Thursday. “I would refer you to the Ministry of Infrastructure for specifics in respect to dates of direction.”

Lindsay also said it “had always been the position of Infrastructure Ontario that details of the Therme lease would be made public” but did not explain the logic behind the timing.

A spokesperson for the Minister of Infrastructure did not respond to questions over the timing from Global News in time for publication.

Ontario has the right to terminate the lease early — with five years’ notice — after the Therme facility has been in operation for 10 years.

An official opening date has not been set for the attraction, with 2030 a mooted date for the completion of the parking garage included in the lease.

On Thursday Therme also didn’t give a date but said that construction would begin as soon as the site was ready and that it was hoping to get that stage finished as quickly as possible.

— with files from The Canadian Press