Honestly I think moving Lisgar makes more sense. Then we would not need to bother with a grade separation at Tenth Line. If we cast our minds forward, there will be a 407 transitway built in some form. That transitway should have a connection to the Milton Line at Ninth Line, about 1.5km away from Lisgar GO. Lisgar could be moved closer to Winston Churchill, which would have more natural ~2km stop spacing between Meadowvale and Ninth Line. The employment lands owned by Smartcentres at Argentia/Winston Churchill is slated for conversion to mixed use for high density redevelopment. It's not included in that review, but there is a grocery store at that intersection that could be redeveloped into a TOC station (in partnership with the current owner). This site is much closer to the highway for GO Bus connections, Steeles BRT, etc. and makes the station more accessible for the industrial uses on the north side of the 401 (and the thousands of warehouse workers). Lisgar's current site is not ideal for TOD as it is located next to the hydro ROW that occupies much of its walkshed.
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Everything north of the tracks will never see residential development or TOD under the current thinking of council. There was a proposal last year to change the plaza across the street from the grocery store to a TOD and the city refused it outright as they wanted to leave it as employment land, and it would create more traffic issues. Even the locals were split on that issue
When Lisgar was built, there wasn't anything around it with a plan to grade separate Tenth line at a future date. Today, several employment places have been built along with roads.
If you move the station to the 403 area, you have several issues doing so from how getting transit to it, how well people who walk to the station now get to it considering local transit is poor in the first place other than driving if they have access to a car? The area is low density in the first place.
Moving the station to the grocery store site will require the store to relocate, must build a parking structure to house parking with traffic becoming a greater nightmare for that intersection than it is today which is bad and more so when the 401 goes down.
I stand to be corrected, but the CPKC mainline is 3-4 at Lambton yard with one track being used as a storage track. There is no room to the south for another track without major exportation for it
As for the fly under location, there are two options for the Humber River area. The first one is on the east side that has a curve starting to the east of the river and ending east of the arena. The other option is west of the river to Royal York/Dundas. I would need to see the area to be sure than solely relying on the map to say this where it should be built.
If CPKC abandon Lambton Yard, a flyover will work there with no issue. A flyover will work at the west end of the yard starting west of Jane and ending west of Scarlett Rd
Lambton current mainline will be a pinch point for 15-minute service without a second track as well reinstalling the second track into the Weston Subdivision that used to be there.