Plans in the works to redevelop former St. Thomas psychiatric hospital land into housing

A plan to redevelop the former St. Thomas Psychiatric Hospital grounds into a multi-use community is beginning to take shape, as Central Elgin looks to build housing to meet an anticipated spike in demand from the VW battery gigafactory.

The new multi-billion dollar plant, set to open in 2027 under Volkswagen AG subsidiary PowerCo, will support up to 3,000 direct jobs and a projected 30,000 indirect jobs when fully operational in the northeast St. Thomas.

Officials in neighbouring Central Elgin say that won't just mean unprecedented economic opportunities, but also a drastic need for new homes. With more than 130 hectares of land sitting largely vacant, the former psychiatric hospital grounds are a promising solution.

On Monday, Central Elgin councillors got the ball rolling, endorsing a vision and guiding principles document for the redevelopment — a first step in the planning process to create a larger project roadmap.

The document envisions a mixed-use community, potentially housing as many as 9,000 residents and over 3,500 homes. The municipality anticipates it will see most of the additional population growth in the area over the next 25 years.

"Given current population and employment growth implications of the VW plant, future development of the Hospital Lands is critical to supporting the quick delivery of housing for direct and indirect employees," the document says.

With housing the top issue in recent elections, redeveloping the lands is a chance for Central Elgin to be part of the solution, Mayor Andrew Sloan said.

A so-called vision session held in January between council and consultants from NPG Planning laid the groundwork for the document when it comes to what a new community should include.

"People really want to see a mix of commercial," Sloan said. "There's a lot of interest in having a downtown area with parks and opportunities to walk, ride bikes … different levels of people from incomes as well as age."

Council and community engagement will come in the fall which will help determine things like housing types, and how parks and community services will be incorporated, said Mary Lou Tanner, president of NPG Planning.

A directions report will be tabled by year's end, and a public meeting will be held in early 2026, followed with an Official Plan amendment, creating the policies and mapping how the community will be laid out, Tanner said.

When residents might actually see shovels in the ground depends on the province, which owns the land.

"At this point, it is dependent on when the province divests itself of the lands. That is the linchpin to getting moving on shovels in the ground," Tanner said.

Sloan says the municipality hopes to get direction from Infrastructure Ontario soon about whether they'll divest the site to Central Elgin, or sell it on the open market. Either way, Central Elgin has planning review authority.

"We're part of the solution regardless if we own it, or we're working with someone that does own it, but preferably, we'd like to have a chance to own it ourselves," Sloan said.

The total former hospital grounds cover roughly 168 hectares of land. Nearly 32 hectares is occupied by the former hospital buildings, the Southwest Centre for Forensic Mental Health Care SCFMHC and an OPP detachment.

Tanner says it's expected the current mental health care facility and OPP detachment will remain.

"We are working to plan for the whole site," including the former hospital buildings, "but what ultimately gets sold will be the province's decision," Tanner said.

CBC News has reached out to Infrastructure Ontario for comment.

The redevelopment plans are largely possible thanks to the VW battery plant.

In 2023, the province passed legislation allowing St. Thomas to annex 607 hectares of farmland from Central Elgin to attract the German automaker.

A roughly $80 million settlement reached last year between the two municipalities saw Central Elgin gain 1,700 cubic metres per day of wastewater treatment capacity for the hospital lands.

The former St. Thomas Psychiatric Hospital opened in 1939, and was operated by the province until 2001 when it was divested to St. Joseph's Health Care London. The facility closed in 2013 with the opening of the Southwest Centre for Forensic Mental Health nearby.

In 2021, a Fifth Estate investigation revealed that from 1977 to 1983, men found either guilty or "not criminally responsible" for rape, murder and other crimes had been sent to the hospital from Oak Ridge Psychiatric Unit to serve as patient-teachers to women with mental illness.

The report served as the catalyst for a class action lawsuit, certified last year, alleging psychological, physical, and sexual abuse.