I see the point about continuing a subway under Bank, south of Billings Bridge Shopping Mall. With the continued development of retail ‘mini-malls’ and future residential increases, the strip will definitely need good transit.
That said, I am a fan of on-surface, visible, transit, with closely-spaced stops for ‘Main Streets’ (which is what I think that you are envisioning for Bank south). I would recommend buses (ideally electric) to run up and down the entire length of Bank, from Queen to Hunt Club. This would be the ‘Local’ transit and it would connect to the more regional LRT/Subway at transfer stations – one of which would be Billings Bridge Station.
The Bank Street Subway (which I have arbitrarily called Line 3), north of the Billings Bridge Transfer Station, and the surface-running LRT south of that (which would still be part of Line 3), would have, relatively, widely spaced stations. This line would be used by people who need to get to a different area of the city – not just a different block on the same street.
The southern section of Bank will, indeed, densify. The numbers might be in the low thousands, but those transit riders will still be spread out in a long line along the road. In contrast, the redevelopment of the Federal area bordered by Riverside Drive, Data Centre Road, the Airport Parkway, and Brookfield Road could house tens of thousands of people. And, those people will, likely, be arriving from places that are further away than local buses can go.
I would like to see the City and the Federal Government actually design a transit node that can service the large number of people that can fit in that area – and then to have the Feds actually develop an area that has good transit connections. Local buses can easily handle the transit requirements of the retail and residences along Bank Street.
This image shows a lot of the available land in the area and a possible routing for Line 2, Line 3 (Bank Subway – but just in trench behind CRA building and along the Bronson ramp), and the Baseline BRT (which no longer needs to use Data Centre Road).
If nothing else, I suggest that, while the City is doing work to grade-separate the rail lines, it also builds the BRT overpass, since this could provide a ‘Fare-Paid’ transfer point between the BRT and Line 2 – even if there is no future Line 3.