Item - 2020.GL14.3

The General Government and Licensing Committee recommend that:

1. City Council authorize a new lease agreement between the City of Toronto (the "City"), as tenant, and FCHT Holdings (Ontario) Corporation, as landlord, for Units 21 and 22, 85 Ellesmere Road, Scarborough, for a twenty (20) year term, substantially on terms and conditions set out in Appendix A to the report (June 19, 2020) from the Executive Director, Corporate Real Estate Management and the City Librarian.

2. City Council pass a By-law pursuant to Section 252 of the City of Toronto Act, 2006, providing authority to:

a.  enter into a Municipal Capital Facility Agreement with FCHT Holdings (Ontario) Corporation, the landlord, that will lease Units 21 and 22 at 85 Ellesmere Road (the "Leased Premises") comprising of approximately 11,760 square feet to the City of Toronto, to be used for a public library; and

b.  exempt the Leased Premises from taxation for municipal and school purposes, with the tax exemption being effective from the latest of:

1. the commencement date of the Lease;

2. the date the Municipal Capital Facility Agreement is entered into; and

3. the date the Tax Exemption By-law is enacted.

3. City Council direct the City Clerk to give written notice of the amended By-law to the Minister of Finance, the Municipal Property Assessment Corporation, the Toronto District School Board, the Toronto Catholic District School Board, le Conseil scolaire Viamonde, and le Conseil scolaire catholique MonAvenir.

The purpose of this report is to obtain City Council authority to enter into a new lease agreement with FCHT Holdings (Ontario) Corporation (the "Landlord), for approximately 11,760 square feet of space, at 85 Ellesmere Road, Scarborough (the "Leased Premises"), for the purpose of expanding the Toronto Public Library, Maryvale Branch. The report also seeks authority to designate the Leased Premises as Municipal Capital Facility, and to provide an exemption from municipal and education taxes.

The current Toronto Public Library branch, which is located in Parkway Mall at 85 Ellesmere Road, Scarborough, occupies 4,998 square feet. The proposed expansion will add 6,762 square feet, for a total of 11,760 square feet in a different and improved location within the mall. The proposed lease has favourable terms as the size of the branch will increase by 135 percent, but the gross annual cost of the lease is expected to increase by less than 70 percent. The lease proposal also includes a significant landlord contribution that will fund 30 percent of the capital costs. The proposed term for the lease is for twenty (20) years, and is expected to commence on June 1, 2021 (the “Commencement Date”). The rent and other terms and conditions of the proposed new lease reflect current market value according to market research and valuation conducted by Corporate Real Estate Management staff.

The current Municipal Capital Facility designation provides a tax exemption for 4,998 square feet, and will be cancelled when the Library vacates the current location space. The requested Municipal Capital Facility designation would provide tax exemption for the new, expanded space.