Item - 2011.EX7.1

Tracking Status

  • City Council adopted this item on July 12, 2011 with amendments.
  • This item was considered by Executive Committee on June 20, 2011 and was adopted with amendments. It will be considered by City Council on July 12, 2011.
  • See also By-law 1128-2011

EX7.1 - Restructuring of Relationship with Lakeshore Lions Arena Incorporated

Decision Type:
ACTION
Status:
Amended
Ward:
6 - Etobicoke-Lakeshore

City Council Decision

City Council on July 12, 13 and 14, 2011, adopted the following:

 

1.         City Council adopt the business case in Attachment 1 of the report (June 6, 2011) from the Deputy City Manager and Chief Financial Officer and the General Manager, Parks, Forestry and Recreation and establish a new city services corporation named Lakeshore Arena Corporation (the "Corporation"), pursuant to Section 148 of the City of Toronto Act, 2006, and Ontario Regulation 609/06 (City Services Corporation Regulation) and the Ontario Business Corporations Act, to assume the leasehold interest in the 4-pad Arena located at 400 Kipling Avenue from the Lakeshore Lions Arena Inc. (LLAI) and to manage and operate the Arena.

 

2.         City Council grant authority to consent to the assignment by LLAI of its leasehold interest in the Arena to the Corporation, and to the assignment by LLAI of all related rights and agreements, including subleases, the Naming Rights Agreements, and the Municipal Capital Facilities Agreement, to the Corporation.

 

3.         The Corporation assume the leasehold interest of LLAI and the following balance of project construction debt:

 

a.         $20,771,834 in fixed rate debt and $18,838,379 in floating rate debt with Pacific and Western Bank of Canada (the "Lender");

b.         $1,200,000  as a payment to Giffels Corporation ("Giffels"); and

c.         $1,000,000 Energy Efficiency Loan with the City.

 

4.         The Corporation assume:

 

a.         All unaudited trade liabilities of LLAI as at May 31, 2011 (estimated at $535,267);

b.         All cash and unaudited trade receivables of LLAI  as at May 31, 2011 (estimated at $490,481); and

c.         All additional trade liabilities the Arena incurs in the normal course of business until the incorporation date, which have been approved by the City in accordance with the Memorandum of Understanding dated June 2, 2011 between the City and the Lakeshore Lions Arena Incorporated.

 

5.         The Corporation assume such other reasonable business-related liabilities of LLAI in respect to the construction, management and operations of the Arena as may be identified by a currently on-going review of the liabilities of LLAI.

 

6.         City Council authorize a short-term interest-only loan to the Corporation in an amount not to exceed $20,039,000, plus any subsequent accrued and capitalized interest at the rate of 3% compounded semi-annually, for the purpose of discharging, in whole or in part and on a date or dates determined at the discretion of the Deputy City Manager and Chief Financial Officer, the three existing Floating Rate Credit Facilities with the Lender, and the payment to Giffels, to be funded from the City's own working capital.

 

7.         City Council authorize a line of credit to the Corporation in an amount not to exceed $1,000,000, with interest at the rate of 3% annually calculated monthly, for the purpose of covering periodic operating working capital cash shortfalls, to be repaid in full, and to be funded from the City's own working capital.

 

8.         City Council deem the loans to the Corporation recommended in Parts 6 and 7 above, to be in the interests of the City.

 

9.         Despite the standard composition established by Council under item 2011.EX4.7, City Council establish the board composition of the Corporation consisting of:

 

a.         The General Manager of Parks, Forestry and Recreation, or her designate, as the Chair of the Board;

b.         The Chief Corporate Officer or his designate;

c.         The Deputy City Manager and Chief Financial Officer or his designate;

d.         A representative of the tenants; and,

e.         Two members of the public with expertise and a background in sports and entertainment, finance, and/or marketing.

 

10.       City Council authorize the Board, once established, to recruit the tenant representative and citizen representatives identified in Parts 9d. and e. above, and report back to Council with the recommended appointees.

 

11.       The City release the directors and members of Lakeshore Lions Arena Inc. and the Lakeshore Lions Club from any claims arising from their role as directors or members in respect of the Arena with the exception of any claims arising from fraud, misrepresentation, negligence, or criminal acts of any kind, and indemnify and save harmless the directors and officers of the Corporation from time to time against any claims they may incur in their roles as board directors and officers.

 

12.       City Council amend the Unanimous Shareholder Declaration set out in Attachment 2 of the report (June 6, 2011) from the Deputy City Manager and Chief Financial Officer and the General Manager, Parks, Forestry and Recreation by:

 

a.         Deleting Paragraph 10; and

b.         Amending Paragraph 7 to read:

 

Refer the request of the Lakeshore Lions Club to permit the existing interior and exterior signage bearing the symbol of the Lakeshore Lions Club to continue to be displayed, to the General Manager, Parks, Forestry and Recreation, the local Councillor, and the new Board of Management for review and a decision.

 

13.       As the sole shareholder, City Council approve the Unanimous Shareholder Declaration as set out in Attachment 2 of the report (June 6, 2011) from the Deputy City Manager and Chief Financial Officer and the General Manager, Parks, Forestry and Recreation, as amended by Part 12 above, and the By-Law No. 1 for the Corporation as set out in Attachment 3 of the report (June 6, 2011) from the Deputy City Manager and Chief Financial Officer and the General Manager, Parks, Forestry and Recreation, effective upon the establishment of the Corporation.

 

14.       The Corporation assume from LLAI employment contracts and other existing service contracts for the continued operation of the Arena.

 

15.       City Council request the General Manager of Parks, Forestry and Recreation, in conjunction with the Deputy City Manager and Chief Financial Officer, to report back to the Executive Committee at the appropriate time on a long-term strategy for the long-term self-supporting viability of the Arena.

 

16.       City Council grant authority to enter into any agreements or documents, including amendments to existing agreements, between the City and the Corporation, LLAI, the Lender, Giffels, any tenants of the Arena, or any other parties as may be required, desirable, or necessary in relation to the implementation of the recommendations of this report,  all on such terms and conditions as are set out in this report and as are satisfactory to the Deputy City Manager and Chief Financial Officer in consultation with the General Manager of Parks, Forestry and Recreation, and in a form acceptable to the City Solicitor.

 

17.       City Council direct the Deputy City Manager and Chief Financial Officer and the General Manager, Parks, Forestry and Recreation to report to the Executive Committee at its meeting on October 3, 2011, on the status of the business plan for the Lakeshore arena, and on an appropriate procurement process for management of the facility or to divest the City's interest.

 

18.       City Council thank the Lakeshore Lions for their decades of community service.

 

19.       City Council direct that Confidential Attachment 1 to the report (July 5, 2011) from the Deputy City Manager and Chief Financial Officer and the General Manager, Parks, Forestry and Recreation, remain confidential in its entirety as it relates to labour relations or employee negotiations.

 

Confidential Attachment 1 to the report (July 5, 2011) from the Deputy City Manager and Chief Financial Officer and the General Manager, Parks, Forestry and Recreation (EX7.1a) remains confidential in its entirety in accordance with the provisions of the City of Toronto Act, 2006, as it relates to labour relations or employee negotiations.

Confidential Attachment - Labour relations or employee negotiations

Background Information (Committee)

(June 6, 2011) Staff Report - Restructuring of Relationship with Lakeshore Lions Arena Incorporated
https://www.toronto.ca/legdocs/mmis/2011/ex/bgrd/backgroundfile-38923.pdf
Attachment 3 to Staff Report: By-Law of the Lakeshore Arena Corporation
https://www.toronto.ca/legdocs/mmis/2011/ex/bgrd/backgroundfile-38924.pdf

Background Information (City Council)

(July 5, 2011) Supplementary report from the Deputy City Manager and Chief Financial Officer and the General Manager, Parks, Forestry and Recreation on Lakeshore Lions Arena Incorporated Review of Liabilities, Employment and Service Contracts (EX7.1a)
https://www.toronto.ca/legdocs/mmis/2011/cc/bgrd/backgroundfile-39440.pdf
(July 5, 2011) Confidential Attachment 1 to the report from the Deputy City Manager and Chief Financial Officer and the General Manager, Parks, Forestry and Recreation

Communications (Committee)

(June 18, 2011) E-mail from Peter Clarke (EX.New.EX7.1.1)

Motions (City Council)

1a - Motion to Amend Item (Additional) moved by Councillor Mark Grimes (Carried)

That City Council adopt the following additional recommendations contained in the report (July 5, 2011) from the Deputy City Manager and Chief Financial Officer and General Manager, Parks, Forestry and Recreation [EX7.1a]:

 

1.         City Council not authorize the public release of the confidential information in Attachment 1.

 

2.         The new city services corporation named Lakeshore Arena Corporation (the "Corporation") assume:

 

a.         All unaudited trade liabilities of LLAI as at May 31, 2011 (estimated at $535,267);

b.         All cash and unaudited trade receivables of LLAI  as at May 31, 2011 (estimated at $490,481); and

c.         All additional trade liabilities the Arena incurs in the normal course of business until the incorporation date, which have been approved by the City in accordance with the Memorandum of Understanding dated June 2, 2011 between the City and the Lakeshore Lions Arena Incorporated.

Vote (Amend Item (Additional)) Jul-14-2011 10:27 AM

Result: Carried Majority Required - EX7.1 - Grimes - motion 1a
Total members that voted Yes: 37 Members that voted Yes are Paul Ainslie, Maria Augimeri, Ana Bail„o, Michelle Berardinetti, Shelley Carroll, Raymond Cho, Gary Crawford, Vincent Crisanti, Janet Davis, Glenn De Baeremaeker, Mike Del Grande, Frank Di Giorgio, Sarah Doucette, Paula Fletcher, Doug Ford, Rob Ford, Mary Fragedakis, Mark Grimes, Doug Holyday, Norman Kelly, Mike Layton, Chin Lee, Gloria Lindsay Luby, Giorgio Mammoliti, Josh Matlow, Pam McConnell, Mary-Margaret McMahon, Joe Mihevc, Ron Moeser, Frances Nunziata, Cesar Palacio, John Parker (Chair), Gord Perks, Jaye Robinson, Michael Thompson, Adam Vaughan, Kristyn Wong-Tam
Total members that voted No: 1 Members that voted No are David Shiner
Total members that were Absent: 7 Members that were absent are Josh Colle, John Filion, Peter Milczyn, Denzil Minnan-Wong, James Pasternak, Anthony Perruzza, Karen Stintz

1b - Motion to Amend Item moved by Councillor Mark Grimes (Carried)

That City Council delete Recommendation 11 and replace it with a new Recommendation 11:

 

Recommendation 11 to be deleted:

 

11.       The Unanimous Shareholder Declaration set out Attachment 2 of the report (June 6, 2011) from the Deputy City Manager and Chief Financial Officer and the General Manager, Parks, Forestry and Recreation be amended by:

 

a.         Deleting Paragraph 10; and

b.         Deleting the words, "and permit the existing interior and exterior signage bearing the symbol of the Lakeshore Lions Club to continue to be displayed" from Paragraph 7.

 

New Recommendation 11:

 

11.       The Unanimous Shareholder Declaration set out in Attachment 2 of the report (June 6, 2011) from the Deputy City Manager and Chief Financial Officer and the General Manager, Parks, Forestry and Recreation be amended by:

 

a.         Deleting Paragraph 10; and

b.         Amending Paragraph 7 to read:  Refer the request of the Lakeshore Lions Club to permit the existing interior and exterior signage bearing the symbol of the Lakeshore Lions Club to continue to be displayed, to the General Manager, Parks, Forestry and Recreation, the local Councillor, and the new Board of Management for review and a decision.

 

Vote (Amend Item) Jul-14-2011 10:26 AM

Result: Carried Majority Required - EX7.1 - Grimes - motion 1b
Total members that voted Yes: 34 Members that voted Yes are Paul Ainslie, Maria Augimeri, Ana Bail„o, Michelle Berardinetti, Shelley Carroll, Raymond Cho, Josh Colle, Gary Crawford, Vincent Crisanti, Janet Davis, Glenn De Baeremaeker, Frank Di Giorgio, Sarah Doucette, Paula Fletcher, Doug Ford, Rob Ford, Mark Grimes, Doug Holyday, Norman Kelly, Mike Layton, Chin Lee, Gloria Lindsay Luby, Giorgio Mammoliti, Josh Matlow, Pam McConnell, Mary-Margaret McMahon, Joe Mihevc, Ron Moeser, Frances Nunziata, Cesar Palacio, John Parker (Chair), Michael Thompson, Adam Vaughan, Kristyn Wong-Tam
Total members that voted No: 4 Members that voted No are Mike Del Grande, Mary Fragedakis, Gord Perks, David Shiner
Total members that were Absent: 7 Members that were absent are John Filion, Peter Milczyn, Denzil Minnan-Wong, James Pasternak, Anthony Perruzza, Jaye Robinson, Karen Stintz

2 - Motion to Amend Item moved by Councillor Doug Holyday (Carried)

That:

 

1.         City Council amend Executive Committee Recommendation 10 to include the following words:

 

"…with the exception of any claims arising from fraud, misrepresentation, negligence, or criminal acts of any kind, …"  so that the recommendation now reads as follows:

 

"10.      The City release the directors and members of Lakeshore Lions Arena Inc. and the Lakeshore Lions Club from any claims arising from their role as directors or members in respect of the Arena with the exception of any claims arising from fraud, misrepresentation, negligence, or criminal acts of any kind, and indemnify and save harmless the directors and officers of the Corporation from time to time against any claims they may incur in their roles as board directors and officers.

Vote (Amend Item) Jul-14-2011 10:24 AM

Result: Carried Majority Required - EX7.1 - Holyday - motion 2
Total members that voted Yes: 37 Members that voted Yes are Paul Ainslie, Maria Augimeri, Ana Bail„o, Michelle Berardinetti, Shelley Carroll, Raymond Cho, Josh Colle, Gary Crawford, Vincent Crisanti, Janet Davis, Glenn De Baeremaeker, Mike Del Grande, Frank Di Giorgio, Sarah Doucette, Paula Fletcher, Doug Ford, Rob Ford, Mary Fragedakis, Mark Grimes, Doug Holyday, Norman Kelly, Mike Layton, Chin Lee, Gloria Lindsay Luby, Giorgio Mammoliti, Josh Matlow, Pam McConnell, Mary-Margaret McMahon, Joe Mihevc, Ron Moeser, Frances Nunziata, Cesar Palacio, John Parker (Chair), Gord Perks, David Shiner, Michael Thompson, Adam Vaughan
Total members that voted No: 1 Members that voted No are Kristyn Wong-Tam
Total members that were Absent: 7 Members that were absent are John Filion, Peter Milczyn, Denzil Minnan-Wong, James Pasternak, Anthony Perruzza, Jaye Robinson, Karen Stintz

3 - Motion to Amend Motion moved by Councillor David Shiner (Lost)

That City Council amend motion 1b by Councillor Grimes by deleting the words "and a decision" and replacing them with the words "and a recommendation to City Council, through the Executive Committee by December 2011", so that Recommendation 11b now reads:

 

11.b.    Amending Paragraph 7 to read:  Refer the request of the Lakeshore Lions Club to permit the existing interior and exterior signage bearing the symbol of the Lakeshore Lions Club to continue to be displayed, to the General Manager, Parks, Forestry and Recreation, the local Councillor, and the new Board of Management for review and a recommendation to City Council, through the Executive Committee by December 2011.

Vote (Amend Motion) Jul-14-2011 10:25 AM

Result: Lost Majority Required - EX7.1 - Shiner - motion 3
Total members that voted Yes: 11 Members that voted Yes are Shelley Carroll, Raymond Cho, Janet Davis, Mike Del Grande, Sarah Doucette, Rob Ford, Mary Fragedakis, Chin Lee, John Parker (Chair), Gord Perks, David Shiner
Total members that voted No: 27 Members that voted No are Paul Ainslie, Maria Augimeri, Ana Bail„o, Michelle Berardinetti, Josh Colle, Gary Crawford, Vincent Crisanti, Glenn De Baeremaeker, Frank Di Giorgio, Paula Fletcher, Doug Ford, Mark Grimes, Doug Holyday, Norman Kelly, Mike Layton, Gloria Lindsay Luby, Giorgio Mammoliti, Josh Matlow, Pam McConnell, Mary-Margaret McMahon, Joe Mihevc, Ron Moeser, Frances Nunziata, Cesar Palacio, Michael Thompson, Adam Vaughan, Kristyn Wong-Tam
Total members that were Absent: 7 Members that were absent are John Filion, Peter Milczyn, Denzil Minnan-Wong, James Pasternak, Anthony Perruzza, Jaye Robinson, Karen Stintz

4 - Motion to Amend Item (Additional) moved by Councillor Paula Fletcher (Carried)

That City Council thank the Lakeshore Lions for their decades of community service.

Vote (Amend Item (Additional)) Jul-14-2011 10:27 AM

Result: Carried Majority Required - EX7.1 - Fletcher - motion 4
Total members that voted Yes: 36 Members that voted Yes are Paul Ainslie, Maria Augimeri, Ana Bail„o, Michelle Berardinetti, Shelley Carroll, Raymond Cho, Josh Colle, Gary Crawford, Vincent Crisanti, Janet Davis, Glenn De Baeremaeker, Sarah Doucette, Paula Fletcher, Doug Ford, Rob Ford, Mary Fragedakis, Mark Grimes, Doug Holyday, Norman Kelly, Mike Layton, Chin Lee, Gloria Lindsay Luby, Giorgio Mammoliti, Pam McConnell, Mary-Margaret McMahon, Joe Mihevc, Ron Moeser, Frances Nunziata, Cesar Palacio, John Parker (Chair), Gord Perks, Jaye Robinson, David Shiner, Michael Thompson, Adam Vaughan, Kristyn Wong-Tam
Total members that voted No: 2 Members that voted No are Frank Di Giorgio, Josh Matlow
Total members that were Absent: 7 Members that were absent are Mike Del Grande, John Filion, Peter Milczyn, Denzil Minnan-Wong, James Pasternak, Anthony Perruzza, Karen Stintz

Motion to Adopt Item as Amended (Carried)

Vote (Adopt Item as Amended) Jul-14-2011 10:28 AM

Result: Carried Majority Required - EX7.1 - Adopt the item as amended
Total members that voted Yes: 38 Members that voted Yes are Paul Ainslie, Maria Augimeri, Ana Bail„o, Michelle Berardinetti, Shelley Carroll, Raymond Cho, Josh Colle, Gary Crawford, Vincent Crisanti, Janet Davis, Glenn De Baeremaeker, Frank Di Giorgio, Sarah Doucette, Paula Fletcher, Doug Ford, Rob Ford, Mary Fragedakis, Mark Grimes, Doug Holyday, Norman Kelly, Mike Layton, Chin Lee, Gloria Lindsay Luby, Giorgio Mammoliti, Josh Matlow, Pam McConnell, Mary-Margaret McMahon, Joe Mihevc, Ron Moeser, Frances Nunziata, Cesar Palacio, John Parker (Chair), Gord Perks, Jaye Robinson, David Shiner, Michael Thompson, Adam Vaughan, Kristyn Wong-Tam
Total members that voted No: 1 Members that voted No are Mike Del Grande
Total members that were Absent: 6 Members that were absent are John Filion, Peter Milczyn, Denzil Minnan-Wong, James Pasternak, Anthony Perruzza, Karen Stintz

Motion to Limit Debate moved by Councillor Mary-Margaret McMahon (Lost)

That, in accordance with Section 27-80 of Chapter 27, Council Procedures, of the City of Toronto Municipal Code, City Council limit debate on this Item to permit only 3 minutes of speaking time.

Vote (Limit Debate) Jul-13-2011 6:44 PM

Result: Lost Two-Thirds Required - EX7.1 - McMahon - Limit debate to 3 minutes
Total members that voted Yes: 18 Members that voted Yes are Gary Crawford, Vincent Crisanti, Mike Del Grande, Frank Di Giorgio, Doug Ford, Rob Ford, Doug Holyday, Norman Kelly, Chin Lee, Gloria Lindsay Luby, Giorgio Mammoliti, Mary-Margaret McMahon, Denzil Minnan-Wong, Ron Moeser, Frances Nunziata (Chair), Cesar Palacio, James Pasternak, David Shiner
Total members that voted No: 20 Members that voted No are Michelle Berardinetti, Shelley Carroll, Raymond Cho, Janet Davis, Glenn De Baeremaeker, Sarah Doucette, John Filion, Paula Fletcher, Mary Fragedakis, Mark Grimes, Mike Layton, Josh Matlow, Pam McConnell, Joe Mihevc, John Parker, Gord Perks, Anthony Perruzza, Michael Thompson, Adam Vaughan, Kristyn Wong-Tam
Total members that were Absent: 7 Members that were absent are Paul Ainslie, Maria Augimeri, Ana Bail„o, Josh Colle, Peter Milczyn, Jaye Robinson, Karen Stintz

EX7.1 - Restructuring of Relationship with Lakeshore Lions Arena Incorporated

Decision Type:
ACTION
Status:
Amended
Ward:
6 - Etobicoke-Lakeshore

Committee Recommendations

The Executive Committee recommends that:

 

1.         City Council adopt the business case in Attachment 1 of the report (June 6, 2011) from the Deputy City Manager and Chief Financial Officer and the General Manager, Parks, Forestry and Recreation and establish a new city services corporation named Lakeshore Arena Corporation (the "Corporation"), pursuant to Section 148 of the City of Toronto Act, 2006, and Ontario Regulation 609/06 (City Services Corporation Regulation) and the Ontario Business Corporations Act, to assume the leasehold interest in the 4-pad Arena located at 400 Kipling Avenue from the Lakeshore Lions Arena Inc. (LLAI) and to manage and operate the Arena.

 

2.         City Council grant authority to consent to the assignment by LLAI of its leasehold interest in the Arena to the Corporation, and to the assignment by LLAI of all related rights and agreements, including subleases, the Naming Rights Agreements, and the Municipal Capital Facilities Agreement, to the Corporation.

 

3.         The Corporation assume the leasehold interest of LLAI and the following balance of project construction debt:

 

a.         $20,771,834 in fixed rate debt and $18,838,379 in floating rate debt with Pacific and Western Bank of Canada (the "Lender");

b.         $1,200,000  as a payment to Giffels Corporation ("Giffels"); and,

c.         $1,000,000 Energy Efficiency Loan with the City.

 

4.         The Corporation assume, such other reasonable business-related liabilities of LLAI in respect to the construction, management and operations of the Arena as may be identified by a currently on-going review of the liabilities of LLAI.

 

5.         City Council authorize a short-term interest-only loan to the Corporation in an amount not to exceed $20,039,000, plus any subsequent accrued and capitalized interest at the rate of 3% compounded semi-annually, for the purpose of discharging, in whole or in part and on a date or dates determined at the discretion of the Deputy City Manager and Chief Financial Officer, the three existing Floating Rate Credit Facilities with the Lender, and the payment to Giffels, to be funded from the City's own working capital.

 

6.         City Council authorize a line of credit to the Corporation in an amount not to exceed $1,000,000, with interest at the rate of 3% annually calculated monthly, for the purpose of covering periodic operating working capital cash shortfalls, to be repaid in full, and to be funded from the City's own working capital.

 

7.         City Council deem the loans to the Corporation recommended in Recommendations 5 and 6 above, to be in the interests of the City.

 

8.         Despite the standard composition established by Council under item 2011.EX4.7, City Council establish the board composition of the Corporation consisting of:

 

a.         The General Manager of Parks, Forestry and Recreation, or her designate, as the Chair of the Board;

b.         The Chief Corporate Officer or his designate;

c.         The Deputy City Manager and Chief Financial Officer or his designate;

d.         A representative of the tenants; and,

e.         Two members of the public with expertise and a background in sports and entertainment, finance, and/or marketing.

 

9.         City Council authorize the Board, once established, to recruit the tenant representative and citizen representatives identified in Recommendations 8(d) and (e) above, and report back to Council with the recommended appointees.

 

10.       The City release the directors and members of Lakeshore Lions Arena Inc. and the Lakeshore Lions Club from any claims arising from their role as directors or members in respect of the Arena, and indemnify and save harmless the directors and officers of the Corporation from time to time against any claims they may incur in their roles as board directors and officers.

 

11.       The Unanimous Shareholder Declaration set out Attachment 2 of the report (June 6, 2011) from the Deputy City Manager and Chief Financial Officer and the General Manager, Parks, Forestry and Recreation be amended by:

 

a.         Deleting Paragraph 10; and

b.         Deleting the words, "and permit the existing interior and exterior signage bearing the symbol of the Lakeshore Lions Club to continue to be displayed" from Paragraph 7.

 

12.       As the sole shareholder, City Council approve the Unanimous Shareholder Declaration as set out in Attachment 2 of the report (June 6, 2011) from the Deputy City Manager and Chief Financial Officer and the General Manager, Parks, Forestry and Recreation, as amended by Recommendation 11 above, and the By-Law No. 1 for the Corporation as set out in Attachment 3 of the report (June 6, 2011) from the Deputy City Manager and Chief Financial Officer and the General Manager, Parks, Forestry and Recreation, effective upon the establishment of the Corporation.

 

13.       The Corporation assume from LLAI employment contracts and other existing service contracts for the continued operation of the Arena.

 

14.       City Council request the General Manager of Parks, Forestry and Recreation, in conjunction with the Deputy City Manager and Chief Financial Officer, to report back to the Executive Committee at the appropriate time on a long-term strategy for the long-term self-supporting viability of the Arena.

 

15.       City Council grant authority to enter into any agreements or documents, including amendments to existing agreements, between the City and the Corporation, LLAI, the Lender, Giffels, any tenants of the Arena, or any other parties as may be required, desirable, or necessary in relation to the implementation of the recommendations of this report,  all on such terms and conditions as are set out in this report and as are satisfactory to the Deputy City Manager and Chief Financial Officer in consultation with the General Manager of Parks, Forestry and Recreation, and in a form acceptable to the City Solicitor.

 

16.       City Council direct the Deputy City Manager and Chief Financial Officer and the General Manager, Parks, Forestry and Recreation to report to the Executive Committee at its meeting on October 3, 2011, on the status of the business plan for the Lakeshore arena, and on an appropriate procurement process for management of the facility or to divest the City's interest.

 

 

Decision Advice and Other Information

The Executive Committee requested the following reports directly to Council:

 

1.         the General Manager of Parks, Forestry and Recreation and the Deputy City Manager and Chief Financial Officer, with recommendations arising from the currently ongoing review of the liabilities of LLAI, including any additional funding that may be required as a result.

 

2.         the City Manager, on the employment and service contracts and other service contracts for the continued operation of the arena, particularly in regard to the length of the contracts, and the notice required by the City to cancel any of these contracts.

Origin

(June 6, 2011) Report from the Deputy City Manager and Chief Financial Officer and the General Manager, Parks, Forestry and Recreation

Summary

Lakeshore Lions Arena Inc. (the "LLAI") is a not for profit corporation which operates a four-pad Arena at 400 Kipling Avenue.  The facility, which  has a 50 year land lease from the Toronto District School Board (the "TDSB"), opened in September 2009, and carries a debt of $43.425 million, of which $35.5 million is guaranteed by the City of Toronto. Lakeshore Lions Club (the "Club") appoints the Board of Directors of LLAI from Club members and governs all activities of the Arena.

 

 

The new Lakeshore Lions Arena (the "Arena") is 4-pad arena complex located at 400 Kipling Avenue and was constructed to replace the dated single-pad facility and to address an under-supply of ice time in the City.  The last indoor municipal arena in Toronto was constructed 30 years ago, and 70% of City arenas are more than 45 years old.  In addition, the 3 NHL size and 1 Olympic size rinks at the Arena provide opportunities to host other major events and continue to be the practice facility for the Toronto Maple Leafs and Marlies, which leverages other uses and interests.

 

The City has an annual allocation of prime time ice at community rates, escalating to 800 hours per year in the fifth and subsequent years of the term, and has accessed its allotment hours in the first two start-up years. The TDSB has access to 500 hours of non-prime time ice annually at no charge.

 

The community and city-wide benefits of this facility include:

 

a.         Addressing an under-supply of ice time;

b.         Access and reduced rates for City and TDSB use of the facility;

c.         Community use; and

d.         A state-of-the-art facility with energy efficient design.

 

Lakeshore Lions Arena Inc. was able to meet its operating and debt service obligations for the first two years of its operations. Approximately half of the debt is by way of a variable interest rate loan. Due to a number of factors including an increase in interest rates, delays in maximizing commercial opportunities, and the approaching due date for some of the loans, the arena will not be able to meet its operating and debt service obligations.

 

Without intervention, default of the Lakeshore Lions Arena Inc. is projected to occur by summer, and which would result in the City's loan guarantee for this project being called upon.  Disruption of service would also displace the current tenants and facility users, putting additional pressure on already scarce ice time. It would also put revenue streams from tenants and users at risk.

 

To protect the City's financial interest and avoid the loss that would arise from a default, this report recommends that a city services corporation be established to assume the leasehold interest, ownership of the asset, project construction debt of the LLAI, and to operate and manage the Arena.  The City Services Corporation  would stabilize the operation by receiving loans from the City to provide working capital and discharge the existing floating rate loans with the lender, and put in place skills based board members with the necessary expertise to maximize the potential of the Arena over the next 2-3 years.  Following that period, the City would seek an operator to take over the leasehold interest with minimal to no loss to the City.

 

In addition to approval by Toronto City Council, the recommended arrangement will be subject to approval by Pacific and Western Bank of Canada, Giffels Corporation and Lakeshore Lions Arena Inc., all of whom have indicated consent in principle.

Background Information

(June 6, 2011) Staff Report - Restructuring of Relationship with Lakeshore Lions Arena Incorporated
https://www.toronto.ca/legdocs/mmis/2011/ex/bgrd/backgroundfile-38923.pdf
Attachment 3 to Staff Report: By-Law of the Lakeshore Arena Corporation
https://www.toronto.ca/legdocs/mmis/2011/ex/bgrd/backgroundfile-38924.pdf

Communications

(June 18, 2011) E-mail from Peter Clarke (EX.New.EX7.1.1)

Speakers

John Knifton, Director of Real Estate, Canlan Ice Sport
Ken Male, V.P., Partnership Solutions, Canlan Ice Sports Corp
Councillor Janet Davis
Councillor Frances Nunziata
Councillor Pam McConnell

Motions

1 - Motion to Amend Item moved by Councillor Mike Del Grande (Carried)

That the report (June 6, 2011) from the Deputy City Manager and Chief Financial Officer and General Manager, Parks, Forestry and Recreation be amended by:

 

1.  Amending Recommendation 6 by deleting "$800,000" and inserting "$1,000,000" so that the recommendation now reads:

 

"6.         City Council authorize a line of credit to the Corporation in an amount not to exceed $1,000,000, with interest at the rate of 3% annually calculated monthly, for the purpose of covering periodic operating working capital cash shortfalls, to be repaid in full, and to be funded from the City's own working capital."

 

2.  Deleting Recommendation 7.


2 - Motion to Amend Item moved by Councillor David Shiner (Carried)

That The Unanimous Shareholder Declaration set out Attachment 2 of the report (June 6, 2011) from the Deputy City Manager and Chief Financial Officer and the General Manager, Parks, Forestry and Recreation be amended by:

 

a.         Deleting Paragraph 10; and

b.         Deleting the words, "and permit the existing interior and exterior signage bearing the symbol of the Lakeshore Lions Club to continue to be displayed" from Paragraph 7.

 


3 - Motion to Amend Item (Additional) moved by Councillor David Shiner (Carried)

That the City Manager report directly to Council on the employment and service contracts and other service contracts for the continued operation of the arena, particulary in regard to the length of the contracts and the notice required by the City to cancel any of these contracts.


4 - Motion to Amend Item (Additional) moved by Councillor Giorgio Mammoliti (Carried)

That the Deputy City Manager and Chief Financial Officer and the General Manager, Parks, Forestry and Recreation report to the Executive Committee at its meeting on October 3, 2011 on the status of the business plan for the Lakeshore arena, and on an appropriate procurement process for management of the facility or to divest the City's interest.


5 - Motion to Adopt Item as Amended moved by Councillor Mike Del Grande (Carried)
Source: Toronto City Clerk at www.toronto.ca/council