Yes, as mentioned above, the reason why this parcel of land is included in the UGB is that it was intended to be used as a cemetery. I'm not 100% sure if this designation was originally from the former London Township (pre-1993) or if this was a city designation.
Cemeteries can be designated as "Open Space" (the same designation for parks, etc), which in this case was the designation for this land.
When the city was developing the UGB in the late 90s (after the 1993 annexation, which included the lands north and south of Sunningdale), the city did not want to include this parcel in the UGB, but they were forced to after a provincial tribunal decision (
source).
Auburn ended up buying the lands, and is obviously wishing to develop the land as a subdivision.
When looking at a map of the UGB (that jammer shared above), this specific parcel (which I shaded blue) certainly does look out-of-place, as this parcel is the only land included in the UGB, north of Sunningdale, and west of Wonderland.
I read in another article that the city will be revisiting the need to change the UGB either this year or next year, so we may see the UGB in this area being addressed.
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