The company behind a controversial waterpark and spa that’s set to take over a major portion of Ontario Place has signed a 95-year lease with the province of Ontario — a long-term contract that the company argues is necessary in order to recoup its multi-million-dollar investment.
Global News has learned that, as part of a multi-year lease, Therme agreed to a cost-sharing deal to maintain the property for 95 years, suggesting plans to have the facility in place for the next century.
Neither Therme nor the Ford government would publicly confirm the details of the contract, citing confidentiality.
The Austrian company behind the project told Global News, however, it’s investing nearly half-a-billion dollars into Ontario Place — $350 million for the 65,000-square-feet private-access spa and $100 million for the public-access portions — and needed a long-term horizon to earn back the initial investment.
“It’s a multi-year lease because, again, we’re investing $100 million in the public realm and ($350 million) in our own building, so we are looking for something commensurate with that investment,” Simon Bredin, spokesperson for Therme, said.
Bredin declined to comment on the length of the lease between Therme and the province.
“It’s a standard commercial lease…. It’s a multi-year lease,” he said. “What I can tell you is it commits us to the long-term maintenance and payment for the public realm … around the West Island.”
Concerns about the length of the lease
Premier Doug Ford unveiled his government’s final vision and design of Ontario Place, which will be anchored by three attractions: the Therme spa, a Live Nation year-round concert venue and a newly built Ontario Science Centre.
According to the agreement involving Therme and Live Nation, the Ontario government will be responsible for contracting out and organizing maintenance of the public space — which is set to include a beach and washrooms — funded by the private companies with long-term leases.
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“They’re going to maintain outside the area of Therme and Live Nation,” Ford said on April 18. “They’ve been an incredible partner so far.”
The near-century-long lease, however, immediately raised questions about the future of the public space and what control future governments would have over Ontario Place.
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Norm Di Pasquale, co-chair of Ontario Palace For All, told Global News that 95 years is a “shockingly big number” given that Therme would have exclusive rights to Ontario Place until the 2100s.
“In 90 years is anyone going to be interested in the spa? Is this a fad that will pass in 10 years? What happens then?” Di Pasquale asked.
“This is a long time to be giving up our waterfront for.”
Chris Glover, the local Ontario NDP MPP, also balked at the details.
“I worry about a 95-year lease to Therme — that’s a long lease, it’s a real concern,” he said.
“Ontario Place (is) owned by and paid for by the taxpayers of this province. And we, as taxpayers, have a right to have a say in the future changes that are made there. And we have not been given that in Ontario Place at all.”
Lease length uncommon but not unheard of
Ontario’s Ministry of Infrastructure refused to comment on the length of the contract, but defended the deal.
Citing the need to “protect the integrity of future negotiations,” officials suggested the upfront costs of the Therme mega-spa justified the lengthy contract.
“The tenants are making significant investments into the improvement, maintenance and repair of the surrounding public spaces to help keep the site clean and beautiful all-year long,” a spokesperson for Infrastructure Minister Kinga Surma said in an email.
The City of Toronto — which does not own the land but will be required to approve future construction requests — declined to weigh in on a provincially held lease.
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A spokesperson said approximately four to five per cent of city-held leases have term lengths that span a century.
“Some examples of leases that are 98 years or longer would include Harbourfront Centre, Humber College South Campus Parking and Sinai Health,” a spokesperson told Global News.
Another example is the Ontario Science Centre, which Ford is set to move from its Don Mills and Eglinton Avenue to Ontario Place.
The city and the Toronto Region Conservation Authority jointly leased the property to the Ontario Science Centre in 1965 on a 99-year lease for $1 per year, the city said in a statement.
Glover, whose Spadina-Fort York riding includes Ontario Place, said other long-term contracts suggested the Therme deal could be a problem.
“The only other lease that I’ve heard that’s that long … was the 407,” Glover pointed out. “That’s a long lease and it’s a real concern.”
Critics unsure of impacts if lease ends early
Senior officials in the Ford government recently told Queen’s Park journalists that the province doesn’t plan on backing out on the deal with Therme and acknowledged that the government would have to pay a kill fee if it reneged on the deal.
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The details of that fee, as well as the overall financial contractual details, have yet to be revealed.
Bredin said Therme was “obviously very, very committed” to the project.
“Just to be clear, the government isn’t selling the land, we’re one tenant as part of the government’s revitalization of Ontario Place — and we’re here to stay,” he said.
While stressing the company’s plans to stay in Toronto for the long term, Bredin said the Ontario Place lands would revert back to the government if the spa packed up before the end of its long-term lease.
Glover, however, expressed concerns about the future of the Ontario Place lease if Therme did decide to end its business at some point in the future.
“What happens if we give Therme a 95-year lease and they go under? They go bankrupt? What happens to that lease?” Glover asked.
“Is that something that they can then sell to another private vendor or does it come back to the people of Ontario? That’s a really fundamental question about that contract that should be answered.”
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Global News put that question to officials at the Ministry of Infrastructure, but it was not addressed in the statement sent by the Ford government.
While neither Therme nor the province will divulge in detail what would happen to the property should the company choose to exit Ontario Place in the future, Di Pasquale said his Ontario Place advocacy group received an answer when the question came up during at the Toronto East York Community Council.
“Should the spa fail, then the province likely would put forward a business plan for something else that the city would have to consider,” Di Pasquale said.
Lease latest twist in Ontario Place redevelopment
Ontario Place opened for the first time in 1971 — and holds a key place in the childhood memories and experiences of many who grew up in Toronto during the ’70s, ’80s and beyond.
It was closed to the public in 2012 after years of financial losses. At that time, the government said attendance fell to about 300,000 from a peak of around 2.5 million.
The Cinesphere was renovated in recent years and continues to operate year-round, showcasing films. Also, a 240-slip marina is open for use between May and October.
More recently, the site has hosted festivals and drive-in events.
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Ford — who has spearheaded the major changes at Ontario Place — is not the first Ontario politician to promise that the now-underused space sitting on the edge of Lake Ontario will be brought back to its former glory. He has, however, made it a central and controversial pledge during his time in office.
Therme has said it plans for its spa and waterpark to be a key part of that revitalization.
“We’re really bringing that family fun aspect of it back,” Bredin said, referencing the history and nostalgia around Ontario Place.
“About two-thirds of the location on the West Island is going to be dedicated to those water slides, wave pools, really fun kind of experiences for kids.”
Ford’s signature transit project, the Ontario Line, is set to terminate at Ontario Place, with Ford touting the project as a link to the venue. He has also promised to revitalize the space through a series of announcements and private-sector partnerships.
In the summer of 2021, Ontario announced three attractions would come to Ontario Place as part of its revitalization. At the time, the province suggested construction could be completed by 2030.
A public consultation on Ontario Place for the future design of its public spaces is set to take place online on the evening of April 27 between 5 and 7 p.m.
— with files from The Canadian Press