Item - 2009.EX36.3

Tracking Status

  • City Council adopted this item on November 30, 2009 without amendments.
  • This item was considered by Executive Committee on November 2, 2009 and was adopted with amendments. It will be considered by City Council on November 30, 2009.

EX36.3 - Exhibition Place Hotel Development Plan and Agreement to Lease

Decision Type:
ACTION
Status:
Adopted

City Council Decision

City Council on November 30, December 1, 2, 4 and 7, 2009, adopted the following:

 

1.         City Council approve of the Board of Governors entering into a 49-year lease agreement with HKH substantially on the terms and conditions contained in Appendix “A” in the report (October 14, 2009) from the Chief Executive Officer, Exhibition Place, and in the Confidential Attachment 1 to the aforementioned report, and such other terms and conditions satisfactory to the Board’s Chief Executive Officer and the City Solicitor.

 

2.         City Council direct that the confidential information contained in Attachment 1 to the report (October 14, 2009) from the Chief Executive Officer, Exhibition Place, not be released publicly in order to protect the competitive position and future economic interests of Exhibition Place and the City of Toronto.

 

3.         City Council approve the HKH Design Proposal for the first phase of a hotel development consisting generally of a podium and tower (approximately 26 floors for the tower) as set out in the proposed design plan and situated on the Phase I lands all as provided in Appendices “A”, “B” and “C” attached to the report (October 14, 2009) from the Chief Executive Officer, Exhibition Place, subject to the alternative site plan review process developed for Exhibition Place by City Planning.

 

4.         City Council request the City of Toronto to complete all necessary steps to declare the hotel lands surplus.

 

5.         City Council direct that the Hotel make provisions for a taxi stand on site, large enough to accommodate the needs of hotel patrons and related venues.

 

Confidential Attachment 1 to the report (October 14, 2009) from the Chief Executive Officer, Exhibition Place, remains confidential in its entirety, in accordance with the provisions of the City of Toronto Act, 2006, as it relates to the security of the property of the municipality or local board.

Confidential Attachment - The security of the property of the municipality or local board

Background Information (Committee)

(October 14, 2009) Report from the Chief Executive Officer, Exhibition Place - Exhibition Place Hotel Development Plan and Agreement to Lease
https://www.toronto.ca/legdocs/mmis/2009/ex/bgrd/backgroundfile-24463.pdf
(September 25, 2009) Appendix A - Letter of Intent
https://www.toronto.ca/legdocs/mmis/2009/ex/bgrd/backgroundfile-24464.pdf
(August 10, 2009) Appendix B - HKH Design
https://www.toronto.ca/legdocs/mmis/2009/ex/bgrd/backgroundfile-24465.pdf
Appendix C - HKH Plans
https://www.toronto.ca/legdocs/mmis/2009/ex/bgrd/backgroundfile-24466.pdf
Appendix D - C. Hawkins - Current Climate Re Hotel
https://www.toronto.ca/legdocs/mmis/2009/ex/bgrd/backgroundfile-24467.pdf
(September 28, 2009) Appendix E Horwath - Hospitality Industry
https://www.toronto.ca/legdocs/mmis/2009/ex/bgrd/backgroundfile-24468.pdf
(September 29, 2009) Appendix F - Toronto Tourism Support
https://www.toronto.ca/legdocs/mmis/2009/ex/bgrd/backgroundfile-24469.pdf
(October 2, 2009) Appendix G - City/Economic Development, Culture Tourism Support
https://www.toronto.ca/legdocs/mmis/2009/ex/bgrd/backgroundfile-24470.pdf
(October 5, 2009) Appendix H - City Planning Support
https://www.toronto.ca/legdocs/mmis/2009/ex/bgrd/backgroundfile-24471.pdf

Background Information (City Council)

(November 23, 2009) Supplementary report from the Integrity Commissioner (EX36.3a)
https://www.toronto.ca/legdocs/mmis/2009/cc/bgrd/backgroundfile-25455.pdf
Appendix 1 to Integrity Commissioner's supplementary report - Chronology of Events
https://www.toronto.ca/legdocs/mmis/2009/cc/bgrd/backgroundfile-25456.pdf
Appendix 2 to Integrity Commissioner's supplementary report - Relevant Provisions of the Code of Conduct Complaint Protocol Restricted Definition) and the Code of Conduct for Members of Local Boards
https://www.toronto.ca/legdocs/mmis/2009/cc/bgrd/backgroundfile-25457.pdf
(November 6, 2009) Supplementary report from the Chief Executive Officer, Exhibition Place (EX36.3b)
https://www.toronto.ca/legdocs/mmis/2009/cc/bgrd/backgroundfile-25611.pdf

Communications (Committee)

(July 16, 2007) Letter from Paul Clifford, President, UNITE HERE Local 75 (EX.Main.EX36.3.1)

Communications (City Council)

(November 30, 2009) E-mail from Ross Bobak (CC.New.EX36.3.2)

Motions (City Council)

1 - Motion to Receive Item moved by Councillor Rob Ford (Lost)
That the Item be received for information.

Vote (Receive Item) Nov-30-2009 4:04 PM

Result: Lost Majority Required - EX36.3 - Ford - Motion 1
Total members that voted Yes: 4 Members that voted Yes are Rob Ford, Denzil Minnan-Wong, Frances Nunziata, Case Ootes
Total members that voted No: 36 Members that voted No are Brian Ashton, Maria Augimeri, Sandra Bussin (Chair), Shelley Carroll, Raymond Cho, Janet Davis, Glenn De Baeremaeker, Frank Di Giorgio, John Filion, Paula Fletcher, Adam Giambrone, Suzan Hall, A.A. Heaps, Doug Holyday, Cliff Jenkins, Norman Kelly, Chin Lee, Gloria Lindsay Luby, Giorgio Mammoliti, Pam McConnell, Joe Mihevc, Peter Milczyn, David Miller, Ron Moeser, Howard Moscoe, Cesar Palacio, Joe Pantalone, John Parker, Gord Perks, Anthony Perruzza, Kyle Rae, Bill Saundercook, Karen Stintz, Michael Thompson, Adam Vaughan, Michael Walker
Total members that were Absent: 5 Members that were absent are Paul Ainslie, Mike Del Grande, Mike Feldman, Mark Grimes, David Shiner

Motion to Adopt Item (Carried)

Vote (Adopt Item) Nov-30-2009 4:05 PM

Result: Carried Majority Required - EX36.3 - Adopt the Item
Total members that voted Yes: 36 Members that voted Yes are Brian Ashton, Maria Augimeri, Sandra Bussin (Chair), Shelley Carroll, Raymond Cho, Janet Davis, Glenn De Baeremaeker, Frank Di Giorgio, John Filion, Paula Fletcher, Adam Giambrone, Suzan Hall, A.A. Heaps, Doug Holyday, Cliff Jenkins, Norman Kelly, Chin Lee, Gloria Lindsay Luby, Giorgio Mammoliti, Pam McConnell, Joe Mihevc, Peter Milczyn, David Miller, Ron Moeser, Howard Moscoe, Cesar Palacio, Joe Pantalone, John Parker, Gord Perks, Anthony Perruzza, Kyle Rae, Bill Saundercook, Karen Stintz, Michael Thompson, Adam Vaughan, Michael Walker
Total members that voted No: 4 Members that voted No are Rob Ford, Denzil Minnan-Wong, Frances Nunziata, Case Ootes
Total members that were Absent: 5 Members that were absent are Paul Ainslie, Mike Del Grande, Mike Feldman, Mark Grimes, David Shiner

EX36.3 - Exhibition Place Hotel Development Plan and Agreement to Lease

Decision Type:
ACTION
Status:
Amended

Confidential Attachment - The security of the property of the municipality or local board

Committee Recommendations

The Executive Committee recommends that:

 

1.         City Council approve of the Board of Governors entering into a 49-year lease agreement with HKH substantially on the terms and conditions contained in Appendix “A” in the report (October 14, 2009) from the Chief Executive Officer, Exhibition Place, and in the Confidential Attachment 1 to the aforementioned report, and such other terms and conditions satisfactory to the Board’s Chief Executive Officer and the City Solicitor.

 

2.         City Council direct that the confidential information contained in Attachment 1 to the report (October 14, 2009) from the Chief Executive Officer, Exhibition Place, not be released publicly in order to protect the competitive position and future economic interests of Exhibition Place and the City of Toronto.

 

3.         City Council approve the HKH Design Proposal for the first phase of a hotel development consisting generally of a podium and tower (approximately 26 floors for the tower) as set out in the proposed design plan and situated on the Phase I lands all as provided in Appendices “A”, “B” and “C” attached to the report (October 14, 2009) from the Chief Executive Officer, Exhibition Place, subject to the alternative site plan review process developed for Exhibition Place by City Planning.

 

4.         City Council request the City of Toronto to complete all necessary steps to declare the hotel lands surplus.

 

5.         City Council direct that the Hotel make provisions for a taxi stand on site, large enough to accommodate the needs of hotel patrons and related venues.

Decision Advice and Other Information

The Executive Committee:

 

1.         Referred the following motion by Mayor Miller, on behalf of Councillor Minnan-Wong, to the Integrity Commissioner, with a request that she:

 

i.          meet with Councillor Minnan-Wong to determine what facts, if any, he can provide to her in support of his motion;

 

ii.          meet with Mr. Rocco Maragna to determine if his actions were in accordance with the relevant Code of Conduct;

 

iii.         undertake such other steps as she deems appropriate; and

 

            submit a report directly to City Council on November 30, 2009, on her findings.

 

            Motion by Mayor Miller, on behalf of Councillor Minnan-Wong:

 

That the Integrity Commissioner be requested to investigate and report back to the Executive Committee on the involvement of Mr. Rocco Maragna in this matter; and that the report (October 14, 2009) from the Chief Executive Officer, Exhibition Place, be deferred until such time as the Integrity Commissioner reports and makes recommendations.

 

2.         Referred the issues surrounding the Ukrainian Community raised by Councillor Lindsay Luby, together with a copy of the report entitled "Recalling Canada's first national internment operations: Annual report of the Canadian First World War Internment Recognition Fund", provided by Councillor Lindsay Luby, to the Board of Governors of Exhibition Place with a request that the Chief Executive Officer, Exhibition Place, submit a report directly to City Council.

Origin

(October 14, 2009) Report from the Chief Executive Officer, Exhibition Place

Summary

In November 2006, a Request for Expressions of Interest for a Hotel Development at Exhibition Place (REOI) was released publicly through City of Toronto Purchasing Department.  Three proposals were received.  One term of the REOI stated that only proponents responding to the REOI would be considered qualified to respond to the subsequent Request for Proposal (RFP).  

 

A RFP was released through the City of Toronto Purchasing on April 17, 2007.  Both of the two hotel developers short-listed through the previous REOI process submitted a proposal and the Board approved HK Hotels LLC (“HKH”) as the successful proponent.  In March 2008, the Board approved a Letter of Intent (LOI) between the Board and HKH which set out general terms along with an exclusivity to negotiate.

 

In the summer of 2008, a Stage 2 Archeological Investigation was conducted on the proposed hotel site by Archeological Services Inc. engaged jointly by Exhibition Place and HKH.  The full archeological report was received from the consultant in March 2009.

 

Subsequent to receipt of the full Stage 2 Archeological Study, HKH engaged an architect, Maragna Architects Inc., to do a preliminary hotel design for the first phase of the proposed hotel.  A summary of the proposed design plan is attached as Appendix “B” to this report along with a full set of drawings as Appendix “C”. HKH has also engaged Archeological Services Inc. to provide input to the design of the heritage elements and how the project relates to these elements and has engaged Urban Strategies to address planning issues.

 

Also attached to this report is:

 

1.         Appendix “D” is an opinion by the Board’s consultant, Cameron Hawkins & Associates Inc., on the economics of constructing a hotel in Toronto and at Exhibition Place in 2009.

 

2.         Appendix “E” from the Board’s hospitality industry consultant, Horwath HTL, outlines the potential uplift to business opportunities at Direct Energy Centre and Allstream Centre from an on-site hotel.

 

3.         Appendix “F” is a letter of support from Mr. David Whittaker, Tourism Toronto.

 

4.         Appendix “G” is a letter from Mr. Williams, General Manager, Economic Development, Culture & Tourism.

 

5.         Appendix “H” is a letter from Mr. Wright, Chief Planner & Executive Director, City Planning.

 

6.         Appendix “I” is an assessment by Cameron Hawkins & Associates Inc., on the direct and indirect economic impact of the hotel construction and operations.

 

Finally, Appendix “J” is a confidential report from the Board’s consultant on the rental structure proposed in the LOI.

 

Since the meeting of the Exhibition Place Business Development Committee on September 3, 2009, meetings have been held to present the proposal and receive input - with the community on September 14, 2009, the archeological community on September 10, 2009 and City Planning staff on September 25 and 28, 2009.

 

The Confidential Attachment I details the financial terms of the proposed lease with a report from the Board’s consultant reviewing these terms.

Financial Impact

The financial terms of the LOI as set out in the Confidential Attachment provide both a fixed minimum rent and additional percentage rent to the Board increasing over the initial 49-year term.  In addition, it is estimated that the Hotel will pay approximately $700,000 annually in property taxes (municipal share is 50%).

 

The positive economic impact from this project is as follows:

 

  1. During the construction period the hotel will create the equivalent of 628 full-time jobs and generate almost $27.0M in total tax revenues.

 

  1. On an ongoing basis and based on Year 2 operations of the hotel with 65% occupancy, the hotel operations will create 186 full-time jobs and $7.9M in total tax revenues.

 

As important as the positive financial return to the Board in the form of rent and percentage rent and the economic impact for the City of Toronto, as detailed below, the hotel will be a huge marketing benefit for Direct Energy Centre and Allstream Centre.

 

Finally, with respect to parking inventory which will be displaced because of the hotel construction and operations, the Phase I hotel footprint represents a temporary loss of 700 parking spaces in Lot 1 during construction.  However, it is likely that these vehicles will be relocated to other parking lots and thus no lost income will result to Exhibition Place. 

Background Information

(October 14, 2009) Report from the Chief Executive Officer, Exhibition Place - Exhibition Place Hotel Development Plan and Agreement to Lease
https://www.toronto.ca/legdocs/mmis/2009/ex/bgrd/backgroundfile-24463.pdf
(September 25, 2009) Appendix A - Letter of Intent
https://www.toronto.ca/legdocs/mmis/2009/ex/bgrd/backgroundfile-24464.pdf
(August 10, 2009) Appendix B - HKH Design
https://www.toronto.ca/legdocs/mmis/2009/ex/bgrd/backgroundfile-24465.pdf
Appendix C - HKH Plans
https://www.toronto.ca/legdocs/mmis/2009/ex/bgrd/backgroundfile-24466.pdf
Appendix D - C. Hawkins - Current Climate Re Hotel
https://www.toronto.ca/legdocs/mmis/2009/ex/bgrd/backgroundfile-24467.pdf
(September 28, 2009) Appendix E Horwath - Hospitality Industry
https://www.toronto.ca/legdocs/mmis/2009/ex/bgrd/backgroundfile-24468.pdf
(September 29, 2009) Appendix F - Toronto Tourism Support
https://www.toronto.ca/legdocs/mmis/2009/ex/bgrd/backgroundfile-24469.pdf
(October 2, 2009) Appendix G - City/Economic Development, Culture Tourism Support
https://www.toronto.ca/legdocs/mmis/2009/ex/bgrd/backgroundfile-24470.pdf
(October 5, 2009) Appendix H - City Planning Support
https://www.toronto.ca/legdocs/mmis/2009/ex/bgrd/backgroundfile-24471.pdf

Communications

(July 16, 2007) Letter from Paul Clifford, President, UNITE HERE Local 75 (EX.Main.EX36.3.1)

Speakers

Mr. Fred Braida, Chairman, Carlton International (Submission Filed)
Ms. Kathy Traill
Councillor Gloria Lindsay Luby, Ward 4, Etobicoke Centre (Submission Filed)
Councillor Denzil Minnan-Wong, Ward 34, Don Valley East
Source: Toronto City Clerk at www.toronto.ca/council