Item - 2017.EX27.12

The Executive Committee recommends that:

1.  City Council delegate the approval and signing authorities for real estate matters as set out in Appendix A to the report (September 12, 2017) from the Deputy City Manager and Chief Financial Officer, and the Chief Corporate Officer, effective January 1, 2018, thereby amending the existing delegated approval and signing authorities adopted by City Council on May 11 and 12, 2010 in Item EX43.7 in the manner indicated in Appendix A.

2.  City Council direct that, subject to the exclusions in Appendix B, all City Divisions, and the City Agencies identified in Appendix B ("Listed Agencies"), operate in accordance with the City's new real estate service delivery model, updated delegated authority approval process as set out in Appendix A to the report (September 12, 2017) from the Deputy City Manager and Chief Financial Officer, and due diligence procedures, effective January 1, 2018 and, if Council approval is required for any real estate matters proposed by such Division or Listed Agencies, that the related request for Council authorization be made by way of a joint report to City Council together with the Chief Corporate Officer or, where the Chief Corporate Officer deems appropriate, the Toronto Realty Agency.

3.  City Council direct that, pending the implementation of Recommendation 2 above, all Listed Agencies inform the Chief Corporate Officer of any ongoing negotiations in relation to proposed real property transactions and, where a binding commitment has not yet been entered into in relation to such proposed transaction, seek direction from the Chief Corporate Officer as to whether a review by Real Estate Services staff is required prior to entering into such commitment.

4.  City Council direct that all City Divisions and Listed Agencies, effective January 1, 2018:

a.  work with the Toronto Realty Agency in such manner as the Chief Corporate Office directs when engaging in the development of real estate portfolio planning strategies, leasing strategies, land development strategies, staff accommodation plans, real estate Request for Proposals (RFP) / Request for Expressions of Interest (REOI), joint venture proposals, and real estate policies; and

b.  provide Toronto Realty Agency with such information as it may request from time to time concerning current, upcoming or planned real estate projects or transactions, for the purpose of enabling Toronto Realty Agency to develop an understanding of existing projects and practices, and develop strategic objectives.

5.  In order to establish appropriate authority for the Toronto Realty Agency over Build Toronto Inc. ("Build Toronto") and the Toronto Port Lands Company ("TPLC") and their respective holding subsidiaries and activities, City Council direct the City Manager, in consultation with the City Solicitor, Chief Corporate Officer, and the chief executive officers of Build Toronto and Toronto Port Lands Company, to review and report back to the Executive Committee in the 4th quarter of 2017 with recommendations for:

a.  amending or replacing Council's existing directions to each of Build Toronto and Toronto Port Lands Company regarding real estate matters as required to implement the new real estate model;

b.  authorizing the Toronto Realty Agency to provide management services pursuant to an agreement with each of Build Toronto and Toronto Port Lands Company; and

c.  implementing the appropriate amendments to Build Toronto's and Toronto Port Lands Company's respective shareholder directions to confirm that:

i.  all land transfers to Build Toronto or Toronto Port Lands Company, or their respective subsidiary corporations shall be subject to the terms of a transfer agreement approved by City Council; and

ii.  the members of the permanent board of directors of the Toronto Realty Agency appointed by Council shall also be appointed as the members of the board of directors of each of Build Toronto and Toronto Port Lands Company.

6.  City Council direct that the Chief Corporate Officer, in consultation with the City Solicitor, and with input from the chief executive officers of the Toronto Transit Commission ("TTC"), Toronto Parking Authority ("TPA") and Board of Governors of Exhibition Place ("Exhibition Place"), review and report back to the Executive Committee in the 4th quarter of 2017 on the appropriate Council directions to be rescinded and replaced and amendments to Municipal Code Chapters 279 (Toronto Transit Commission), 179 (Parking Authority), and 63 (Exhibition Place), to ensure that all real estate transactions are directed through the City's new real estate service delivery model, the updated delegated authority approval process and due diligence procedures, effective January 1, 2018, while recognizing the need to preserve their ability to continue with the day to day management of real property assets falling under their respective jurisdictions.

7.  City Council direct that, subject to the exclusions in Appendix B to the report (September 12, 2017) from the Deputy City Manager and Chief Financial Officer, each of the Toronto Transit Commission, Toronto Parking Authority and Exhibition Place work directly with the Chief Corporate Officer on all new or ongoing real estate transactions until the amendments referred to in Recommendation 6 come into effect on January 1, 2018 and, where a binding commitment has not yet been entered into in relation to such proposed transaction, seek direction from the Chief Corporate Officer as to whether a review by Real Estate Services staff is required prior to entering into such commitment.

8.  City Council rescind the delegated approving and signing authorities in Clause 4 of Economic Development and Parks Committee Report No. 2, entitled "Process for the Approval and Execution of Leases, Licences and Other Agreements Within the Economic Development, Culture and Tourism Department (City Wide)", as adopted by City Council at its meeting on March 6, 7 and 8, 2001, effective as of January 1, 2018.

9.  City Council direct that the Chief Corporate Officer, in consultation with the City Solicitor and with input from the General Manager, Parks, Forestry and Recreation, review and report back to the Executive Committee in the 4th quarter of 2017 on the appropriate delegation of approval and signing authorities to the General Manager, Parks, Forestry and Recreation for short term licence and permit arrangements with respect to recreation, parks and open space areas, in order to preserve their ability to continue with the day to day management, programming and public/commercial use of parks spaces.

10.  City Council amend the consent given to the Toronto Public Library Board to enter into certain leases in Clause 11 of Administration Committee Report No. 6, entitled "Toronto Public Library Board Leases", as adopted by City Council at its meeting on October 26 and 27, 1999, effective as of January 1, 2018, such that City Council's consent is conditional upon the Toronto Public Library Board complying with the updated delegated authority approval process set out in Appendix A and the City's due diligence procedures, and direct the Chief Corporate Officer to seek input from the City Librarian on measures and processes to be implemented to provide appropriate service levels and support to the Toronto Public Library Board in respect of its leasing requirements.

11.  City Council direct the Chief Corporate Officer to work with the affected City Divisions and Listed Agencies to establish appropriate service levels, support and business continuity for their real estate portfolio requirements, on an immediate and ongoing basis.

12.  City Council authorize an amendment to the definition of "sale" in Chapter 213, Sale of Real Property of the City of Toronto Municipal Code to clarify the manner in which the term of a lease of City property is calculated for the purposes of same, by specifying that a lease of City property constitutes a sale only in circumstances where the unexpired term of the lease, including any rights of renewal or extension, exceeds 21 years, and authorize the Chief Corporate Officer and City Solicitor to take such steps as are required to give effect to this amendment including the introduction in Council of any bills necessary to give effect thereto.

Staff is recommending that Council align authorities for real estate matters with the new City-wide real estate model approved by City Council in May 2017.

The recommendations in the City-Wide Real Estate Transformation report were adopted by City Council on May 24, 2017 (with amendments).  With a City-building focus, the new model will centralize real estate and facilities management activities across the City over a three-year incubation period (not including Toronto Community Housing Corporation and Toronto Hydro at this time). The new model will launch on January 1, 2018, and will include:

-  the Real Estate Services and Facilities Management Divisions under the current Chief Corporate Office, with an expanded city-wide scope and mandate, including the execution and coordination of day-to-day real estate transactions and facilities management; and

-  a new agency to manage the City's real estate strategy, develop City buildings and lands for municipal purposes and deliver client-focused real estate solutions to City Divisions, Agencies and Corporations (includes operational consolidation of Build Toronto and Toronto Port Lands Company).

The model will work in an integrated fashion to execute the best real estate solutions for the City as a whole. To effectively enable the City-wide centralized model, the following is required:

-  centralizing and streamlining of current real estate authorities delegated to City Divisions, Agencies and Corporations.  This includes recommendations to rescind or amend the current delegations of authority for real estate matters as required, including, but not limited to Parks, Forestry and Recreation, Toronto Transit Commission, Toronto Parking Authority, Toronto Public Library, and Exhibition Place; and

-  minor amendments to the current Delegation of Authority Framework for Real Estate Matters.  The consolidated delegated authority framework will co-ordinate, consolidate and harmonize various delegations previously approved by Council for various City Divisions and Agencies.

For the purposes of relieving Committee and Council Agendas of frequently routine real estate reports, facilitating situations involving critical deadlines, improving the stage on which the City conducts its real estate transactions, and avoiding delay in the implementation of approved transactions, Council has delegated authority to approve and sign certain real estate matters where funding has been made available in an approved budget. Staff is recommending that such delegation be updated to co-ordinate, consolidate and harmonize various delegations previously approved by Council.

By centralizing and streamlining the City's decision making framework for real estate matters, the City is expected to realize a number of benefits, including:

-  enhanced real estate oversight, analysis, and process efficiency in decision-making;

-  consistency in due diligence practices and application of City-wide real estate standards;

-  improved coordination and collaboration among City Divisions, Agencies and Corporations in driving real estate solutions;

-  improved opportunities for co-location, space sharing, value maximization and real estate cost savings; and

-  centralized City-wide reporting of real estate activities on an annual basis to City Council.

Overall, addressing real estate authorities is one step in the implementation of the City-wide centralized model.  A model that is designed to better support City programs in delivering service and pursue opportunities in the public interest.  This includes driving major City-building and revitalization projects, unlocking value for City priorities (e.g., community, social, economic, and environmental opportunities), and delivering better service solutions to residents and visitors of the city.

As a next step, the City Manager and the Chief Corporate Officer, in consultation with the City Solicitor and with input from the impacted Divisions, Agencies and Corporations, will review and report back to Council in the fourth quarter of 2017 on specific amendments to Council directions and Municipal Code chapters; and the Chief Corporate Officer will continue to consult with the affected Divisions and Agencies on transition plans to support business continuity during the transition period.

Once the City-wide real estate service delivery model is launched on January 1, 2018, the new Toronto Realty Agency and the Chief Corporate Officer will engage with one another on real estate needs, with service levels maintained and/or improved through the maturity of the new model.