Item - 2020.GL12.12

The General Government and Licensing Committee recommends that:  

1.  City Council approve a new lease (the New Lease) between the City of Toronto, as landlord (the Landlord), Liberty Grand Entertainment Complex Inc., as tenant (the Tenant), and the Board of Governors of Exhibition Place, for a term of twenty (20) years commencing January 1, 2021 and ending December 31, 2040, substantially on the terms and conditions set out in Appendix A and Confidential Attachment 1 to the report (February 24, 2020) from the Deputy City Manager, Corporate Services and the Chief Executive Officer, Exhibition Place, and such other terms and conditions deemed appropriate by the Deputy City Manager, Corporate Services, and the Chief Executive Officer, Exhibition Place, and in a form satisfactory to the City Solicitor.

2.  City Council authorize the Executive Director, Corporate Real Estate Management, or his/her designate, and the Chief Executive Officer, Exhibition Place to execute the lease and any related documents on behalf of the Landlord and the Board, respectively.

3.  City Council direct that Confidential Attachment 1 to the report (February 24, 2020) from the Deputy City Manager, Corporate Services and the Chief Executive Officer, Exhibition Place remain confidential in its entirety and not be released publicly as it pertains to a proposed or pending acquisition or disposition of land by the City of Toronto or one of its local Boards.

The Board of Governors of Exhibition Place, as landlord, and 1309320 Ontario Inc. ("1309320"), as tenant, entered into a lease dated December 7, 2000, for premises known as the Ontario Government Building and certain adjacent lands. The lease was subsequently assigned by 1309320 to Liberty Grand Entertainment Complex Inc. with the Board's consent (such lease, as assigned, is hereinafter the "Existing Lease"). The term of the Existing Lease is twenty (20) years, commencing on January 1, 2001 and expiring on December 31, 2020 (the "Existing Term").

Throughout the Existing Term, the Tenant has undertaken significant renovations in the leased premises at a value of approximately $4.650 million excluding food and beverage equipment. Renovations to the roof, windows, heating, ventilation, and air conditioning systems, kitchen upgrades, washrooms, interior finishes, carpet, paint and other miscellaneous items over the last twenty (20) years have kept the facility in a state of good repair without having cost the Board and the City any financial resources.

The Tenant is requesting a new lease for a twenty (20) year term, commencing January 1, 2021 and expiring on December 31, 2040. Should such a lease be approved by City Council, the Tenant will invest an additional $8.025 million in improvements, primarily during the first five (5) years of the term, which will significantly improve the property.

This report recommends that City Council approve entering into a new lease with the Tenant on the terms and conditions provided in this report (Appendix A). The rent and other terms and conditions of the new lease reflect current market value according to market research and valuation conducted by Corporate Real Estate Management staff.