Item - 2009.EX36.12

City Council recessed its public session and met as Committee of the Whole in closed session on November 30, 2009, and considered confidential information on this Item as it relates to the security of the property of the municipality or local board.

The Executive Committee recommends that:

1.        City Council grant authority for the City, as vendor of the City-owned lands shown as Parts 1 and 2 on Figure 1 attached to the report (October 21, 2009) from Deputy City Manager, Cluster B, together with the Toronto Waterfront Revitalization Corporation (WT), as vendor of the WT-owned lands shown as Part 4 on Figure 1, attached to the aforementioned report, to enter into an Agreement of Purchase and Sale (APS) with Great Gulf (Downtown Properties) Ltd. (GGH), as purchaser, for:

a.         The sale of the City-owned lands shown as Part 1 on Figure 1 contained in the report.

b.          The sale of portions of Bonnycastle Street and Lake Shore Boulevard East shown as Part 2 on Figure 1 subject to Council authorizing the permanent closure of said portions of the public highways.

c.          An access easement in favour of GGH over the City-owned lands fronting onto Queens Quay East shown as Part 3 on Figure 1 until such time as the easement lands are dedicated as public highway.

d.          All other ancillary agreements including any licence, encroachment, easement, closing agreement, or other agreement, contemplated under the APS 

(collectively, the “Sale Transaction”) substantially on the terms and conditions set out in Attachment 2 of the report (October 21, 2009) from Deputy City Manager, Cluster B, together with such other terms and conditions as may be deemed appropriate by the Deputy City Manager whose responsibilities include Waterfront Revitalization in consultation with the Chief Corporate Officer and in a form satisfactory to the City Solicitor, subject to Part  2. of the aforementioned report.

2.        City Council direct that prior to the City entering into the APS, the following matters be completed or provided for to the satisfaction of the Deputy City Manager whose responsibilities include Waterfront Revitalization, in consultation with the City Solicitor and other City officials as appropriate:

a.         Council shall have authorized the permanent closure of the public highway lands shown as Part 2 on Figure 1 attached to the report (October 21, 2009) from Deputy City Manager, Cluster B, or in the alternative, the General Manager of Parks, Forestry and Recreation shall have settled the major terms and conditions for an encroachment by GGH of that part of Sherbourne Park being not greater than one metre along the western boundary of Parts 1 and 4 on Figure 1 of the aforementioned report for the purposes of below grade parking.

b.         WT and GGH having entered into the Development Agreement and WT shall have provided the City with an undertaking that WT will circulate all amendments to the Development Agreement and associated agreements to the City for input on all matters which materially affect the City’s interest as vendor.

c.         WT shall have provided an undertaking to the City that funds received from GGH under the Sale Transaction in accordance with Part 3 of the aforementioned report shall be used for re-investment in the revitalization of the waterfront in accordance with Policy and Finance Committee Report 9, Clause 1, headed “Governance Structure for Toronto Waterfront Revitalization” adopted by Council at its meeting of November 30, December 1 and 2, 2004.

d.         T shall have provided an undertaking to the City to pay, on behalf of the City, all costs and expenses payable or incurred by the City under the Sale Transaction, including purchase price adjustments, interest charges, costs of surveys and reference plans, registration and closing costs and out of pocket expenses pertaining to highway closings.

e.         WT shall have provided an undertaking to the City to take the lead in the management of the APS on behalf of both WT and the City as vendors under the APS, including monitoring the performance of GGH under the APS and consulting with the Deputy City Manager whose responsibilities include Waterfront Revitalization, in consultation with the City Solicitor and other City officials as appropriate.

f.          WT shall have provided confirmation to the City that it has completed a satisfactory due diligence review of GGH and its ability to complete its obligations under the Sale Transaction.

3.        City Council grant authority for the City to direct GGH to pay all deposits, the balance of the purchase price and all other amounts payable to the City under the Sale Transaction to WT.

4.       City Council direct the Waterfront Project Director that the following amounts shall be recognized as part of the City’s overall contribution to waterfront renewal, and be reported by WT in its quarterly funding reports submitted to the three orders of government as part of the Waterfront Renewal Accounting Protocol:

a.         The City’s proportionate share of the purchase price under the Agreement of Purchase and Sale (APS) based on the City’s land contribution of Parts 1 and 2 on Figure 1 attached to the report (October 21, 2009) from Deputy City Manager, Cluster Bas compared to WT’s land contribution of Part 4 on Figure 1.

b.         Any other amounts payable by GGH to the City for any ancillary agreements under the Sale Transaction.

c.         The value of the parkland contribution as would apply to the development parcels, being Parts 1 to 4 on Figure 1of the aforementioned report.

d.         The value of the affordable housing and infrastructure contribution as would apply to the development parcels, being Parts 1 to 4 on Figure 1 of the aforementioned report.

5.         City Council deem the values attributed to the parkland dedication as provided for in this transaction to satisfy all parkland dedication requirements for this development.

6.        City Council authorize the Deputy City Manager whose responsibilities include Waterfront Revitalization, in consultation with the Chief Corporate Officer and  City Solicitor, to have executed the APS, including any amendments in relation to the agreement not materially inconsistent with the major terms and conditions described in Attachment 2 attached to the report (October 21, 2009) from Deputy City Manager, Cluster B, as approved by Council.

7.        City Council direct that if the APS is not finalized and executed by December 31, 2010, the Deputy City Manager whose responsibilities include Waterfront Revitalization, be directed to report back to the Executive Committee with a recommended course of action.

8.         City Council grant authority for the Chief Corporate Officer, his successor/designate, in consultation with the Waterfront Project Director, to provide any consents, approvals, waivers, and notices under the APS provided that the Chief Corporate Officer may, at any time, refer consideration of such matters (including their content) to City Council for its determination and direction.

9.         City Council direct that subject to Part 10 of the report (October 21, 2009) from Deputy City Manager, Cluster B, and with the written consent of WT, the City consent to GGH acting as the City’s agent as owner of the City lands described in Part 1. of the aforementioned report to sign any planning or development applications and agreements in furtherance of the development and construction of the City-owned lands provided the APS has been executed and all requirements and obligations of GGH therein are in good standing; or alternatively, that the City itself execute such documentation solely in its capacity as owner of the lands, on terms satisfactory to the Deputy City Manager whose responsibilities include Waterfront Revitalization, and in form satisfactory to the City Solicitor.

10.       City Council direct that all actions described in the report (October 21, 2009) from the Deputy City Manager, Cluster Bshall be taken by or on behalf of the City in its capacity as land owner and not in its capacity as a planning authority under the Planning Act, the City of Toronto Act, 2006, or otherwise and such actions are not intended to and do not fetter the City’s planning and municipal rights and responsibilities.

11.       City Council direct that the City consent to WT acting as the City’s agent as owner of the City lands described in Part 1. attached to the report (October 21, 2009) from Deputy City Manager, Cluster Breport to sign any planning and development, infrastructure, servicing or any other applications and agreements including agreements with Toronto Hydro, Enbridge Gas or any third party utility provider, required for the development of the lands or alternatively that the City itself execute such documentation solely in its capacity as land owner, provided WT agrees to assume all obligations including costs and liabilities under such documentation and subject to such other terms satisfactory to the Deputy Manager whose responsibilities include Waterfront Revitalization, and in form satisfactory to the City Solicitor.

12.       City Council authorize severally the Chief Corporate Officer and the Deputy City Manager whose responsibilities include Waterfront Revitalization, to execute and deliver all such documentation described in Parts 9. and 11. attached to the report (October 21, 2009) from Deputy City Manager, Cluster B, on behalf of the City.

13.       City Council authorize the public release of the confidential information in Attachment 4 attached to the report (October 21, 2009) from Deputy City Manager, Cluster B, upon the completion of the development of the publicly-owned lands in East Bayfront (EBF) as determined by the Deputy City Manager whose responsibilities include Waterfront Revitalization.

14.      City Council authorize and direct the appropriate City officials to take the necessary action to give effect thereto.

The Toronto Waterfront Revitalization Corporation (WT), as Council’s designated revitalization lead in East Bayfront (EBF), has endorsed the sale of certain WT and City- owned lands included in the development parcel known as Parkside to Great Gulf (Downtown Properties) Ltd. (GGH), subject to the approval of Toronto City Council.

Parkside is the area bounded by Lower Sherbourne St., Queens Quay East, Bonnycastle St. and Lake Shore Boulevard East (see Figure 1).  The district will house Sherbourne Park (north) and the lands subject to this transaction identified as Parts 1 to 4 on Figure 1.  The City lands proposed to be conveyed in fee simple are Parts 1 and 2.  Together the City lands represent approximately 40% (0.41 acres) of the 0.97 acre development site.  The remaining 0.56 acres, shown as Part 4 on Figure 1, are in WT’s ownership and will also be conveyed to GGH in fee simple.  Part 3 represents a future widening block of Queens Quay East and will remain in the City’s ownership.  However, until such time as this parcel is dedicated as public highway, GGH will be granted an easement for access purposes.

This report provides the results of City staff’s review of WT’s proposal and seeks authorization to enter into a sale transaction, together with WT as vendors, with GGH, the major terms of which are contained in Attachment 2.  GGH is proposing a mixed-use development consisting of approximately 540,000 sq. ft. of residential, retail, child care and commercial/office uses.  In accordance with the governance structure for Waterfront Toronto, previously approved by Council, all funds from the sale will be reinvested by WT in waterfront revitalization.  

Terms relating to the construction and development of the site are set out in a Development Agreement between WT, as revitalization lead with responsibility for the overall coordination of waterfront projects and infrastructure, and GGH, as future owner and builder of the development.  The major terms of the Development Agreement are summarized in Attachment 3. Although the City is not a party to this agreement, many of the waterfront revitalization aspirations to be delivered by WT are secured through this agreement and addressed in this staff report.

As of the writing of this report, WT advises that it has in its possession, both the executed Agreement of Purchase of Sale (APS) and Development Agreement.  This signals that the negotiation has been successfully completed and all terms have been finalized by WT and GGH, subject to Toronto City Council approval. Once executed by the City, GGH will commence its design and approval process.