A project is underway to turn the old St. Thomas Psychiatric Hospital site into a mixed-use community, as Central Elgin aims to create housing in response to a predicted increase in demand from the new VW battery gigafactory.
The massive multi-billion dollar facility, scheduled for completion in 2027 under Volkswagen AG’s subsidiary Power Co, will create around 3,000 direct jobs and an estimated 30,000 indirect jobs once fully operational in northeast St. Thomas.
Officials in nearby Central Elgin say this development means not only exciting economic prospects but also a significant need for more homes. With over 130 hectares of mostly vacant land available, the former psychiatric hospital grounds present a viable option.
On Monday, Central Elgin councillors took the first step by approving a vision and guiding principles document for the redevelopment – laying the groundwork for a comprehensive project plan.
The document outlines plans for a mixed-use community that could accommodate up to 9,000 residents and provide more than 3,500 homes. The municipality expects most of this population growth will happen 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 being a key issue in recent elections, redeveloping these lands gives Central Elgin an opportunity to contribute solutions, according to Mayor Andrew Sloan.
A vision session held in January between council members and consultants from NPG Planning helped shape what features should be included in this new community.
“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.”
Community engagement will take place this fall, which will help determine factors such as types of housing and how parks and community services will fit into the plan, said Mary Lou Tanner, president of NPG Planning Solutions.
A directions report is expected by year’s end along with a public meeting slated for early 2026; this will lead to an Official Plan amendment that outlines policies and maps detailing how the community will be structured, Tanner noted.
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The former St. Thomas Psychiatric Hospital on Sunset Drive opened in 1939 and closed in 2013. (John Badcock/CBC)
When construction actually begins depends on when the province decides what it wants to do with the land since it still owns it.
“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 mentions that they hope Infrastructure Ontario provides direction soon regarding whether they’ll transfer ownership of the site to Central Elgin or sell it publicly. Regardless, Central Elgin has planning review authority either way.
“We’re part of the solution regardless if we own it or we’re working with someone that does own it; preferably we’d like to have a chance to own it ourselves,” Sloan said.
The total area occupied by former hospital grounds measures about 168 hectares; nearly 32 hectares are taken up by old hospital buildings along with facilities like SCFMHC and an OPP detachment.
Tanner indicated that it’s likely both mental health care facilities and OPP offices will stay put.</P
dir=”LTR”>“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 both municipalities saw Central Elgin gain 1 ,700 cubic metres per day of wastewater treatment capacity for hospital lands.
The former St. Thomas Psychiatric Hospital opened in 1939 , and was operated by province until 2001 when it was divested t o S t. Joseph ’s Health Care London. The facility closed i n 2013 w ith th e opening o f th e Southwest Centre fo r Forensic Mental Health nearby.
In 2021 , a Fifth Estate investigation revealed that from 1977 t o 1983 , men found either guilty or “not criminally responsible” fo r rape , murder an d other crimes had been sent t o th e hospital f rom Oak Ridge Psychiatric Unit t o serve as patient-teachers t o women w ith mental illness.
The report served as th e catalyst fo r class action lawsuit certified last year alleging psychological , physical , an d sexual abuse.
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