Just around a year after Toronto-based Republic Developments and private equity firm Harlo Capital listed their massive Scarborough Junction project last year, as first reported by STOREYS, the project has found a buyer. Kind of.
Instead of selling the project outright, Republic and Harlo have formed a joint venture with the Government of Ontario, which is making an equity investment of $178 million into the project through the Building Ontario Fund — the arms-length board-governed Crown agency established by the Government of Ontario in 2024.
In an announcement published yesterday, the Government of Ontario said the investment “is advancing a project that was previously stalled” and that after their investment is repaid, the Building Ontario Fund will “reinvest into other projects that would not otherwise get built across six priority areas.”
Those six priority areas are affordable housing, energy, transportation, long-term care, municipal and community infrastructure, and critical minerals.
Earlier this year, the Building Ontario Fund also invested $300 million towards a $1.3 billion fund created by Toronto-based High Art Capital to buy unsold condos in the Greater Toronto Area to convert into rental units.
“To support our plan to protect Ontario, our government is delivering long-term affordable housing in a rapidly growing area of the Greater Toronto Area,” said Ontario’s Minister of Finanace Peter Bethlenfalvy. “Through the Building Ontario Fund, we are leveraging innovative financing tools to unlock rental housing supply that otherwise would not be delivered and transforming underused land into a vibrant transit-connected community.”
“What matters most to me is how this investment reflects BOF’s mandate in action: using public capital responsibly to catalyze projects that wouldn’t otherwise proceed, while delivering clear, long‑term benefits for communities,” added Building Ontario Fund CEO Michael Fedchyshyn on LinkedIn. “In this case, that means new rental supply, long‑term affordability, and the revitalization of underused land in Scarborough.”
Scarborough Junction
The Scarborough Junction project is set for a land assembly immediately west of the Scarborough GO Station. The site is roughly bounded by St. Clair Avenue East on the north, the railway corridor on the east, a few commercial properties to the south, and Danforth Avenue on the west.
The site consists of of 11 legal parcels — 411-415 Kennedy Road, 636-663 Danforth Avenue, and 3569-3595 St. Clair Avenue East — that total to 26.24 acres. The various properties are currently occupied by warehouses, a large sports complex, and several commercial buildings.
Republic Developments and Harlo Capital submitted a development application in 2020, revised the application in 2022, then went through the Ontario Land Tribunal appeal process and reached a settlement with the City of Toronto in February 2024.
The Scarborough Junction site (left) and phasing plan (right). (Colliers)
Approved for the site is a total of 7,655 units — 5,398,796 sq. ft of residential floor space — across 12 towers between 19 to 58 storeys, and 206,191 sq. ft of commercial space, for a grand total of 5,661,108 sq. ft of gross floor area. The project will also include 3,478 parking spaces and 425 new trees, with 15% of the project site to be dedicated as parkland.
The project was listed for sale last May by Jeremiah Shamess, Matthew Soper, Reid Taylor, and Johann Rodrigues of Colliers on an unpriced basis.
“To be honest, our business plan from the get-go was always to zone and sell the land, and we’re really just following through on our business plan,” Republic Developments President & CEO Matt Young told STOREYS. “There was always a potential that we could stay in the deal, if we raise enough capital or have a joint venture partner who came in, and those are all still options and possibilities.”
That possibility has now come to fruition and the Building Ontario Fund said on Wednesday that their investment will kickstart the project, which they noted “will deliver approximately 1,700 new rental homes, including a minimum target of 20% affordable units secured at below-market rents for 40 years.”
“Building Ontario Fund’s investment represents a bold and innovative partnership that we believe can become a model for how transformative housing projects are delivered in Canada,” said Young in yesterday’s press release. “This first-of-its-kind partnership has helped unlock the opportunity to build one of the most ambitious and thoughtfully designed master-planned communities in the country, centered around affordability, connectivity, and long-term community building. We’re incredibly excited about what this means for the future of Scarborough.”
