The city is trying to reach a partnership agreement with a company that’s run by the chairperson of Maple Leaf Sports and Entertainment, Larry Tanenbaum.

City hall has an ambitious plan that would clean up and re-develop the London Hydro property at Horton and Ridout Streets.

What lies beneath the surface of the parking lot behind Hydro headquarters is a multi-million-dollar question.

The 14-acre property is being assessed for redevelopment, but the soil contamination anticipated on the site may be more serious than first thought.

“People may have been surprised at how deep and difficult that may be, but it is not impossible,” said Coun. Joe Swan.

Last summer, Toronto-based Kilmer Brownfield expressed interest in the site.

Headed by Tannenbaum, the company envisions a $200-million mix of high-rise, residential, office space and stores facing a riverfront boardwalk.

Also in on the discussions are representatives from Labatt Brewery. 

Labatt, located beside the property, wants to ensure any development proposal is compatible.

“We don't want to prejudge the work that the city is undertaking now. We just want to make sure that on a go-forward basis, that we can continue to be good neighbours and the city is moving forward sensibly,” says Chris Morley of Labatt Breweries of Canada.

A consulting firm is now conducting a reach study of the river to determine the property's flood line and its level of contamination.

Kilmer Brownfield's business model assumes environmental risk attached with cleaning up contaminated sites. The profits are then shared with the city when the value of the cleaned up property rises.

Mayor Joe Fontana says if the reach study confirms the land is more heavily contaminated than originally thought, the city might have to consider accepting some of the risk.

“Let’s find out what the facts are. Then let’s find out what the development potential is. Then let’s figure out who will take what risk, depending on how much money everyone puts in,” he says.

Swan says in the event the Hydro property isn't suitable for Kilmer Brownfield, a pair of other high profile properties have been shown to the company. The former South Street Hospital site and the psychiatric hospital lands in the east end are on the list.

“Let’s let our environmental professionals tell us the facts and then from there we can make really wise decisions,” Swan says.

City staff estimate the reach study will be completed in March.