Item - 2020.GL19.11

The Government and Licensing Committee recommends that:

1.  City Council authorize the City, as Vendor, to enter into an Agreement of Purchase and Sale with the owners of 101 Spadina Avenue (DevGreat Inc.), as Purchaser/Developer, for:

a. a land exchange between the City and DevGreat Inc. of equal 214 square metre portions of land on 101 Spadina, 105 Spadina Avenue and 363 Adelaide Street West as outlined in Appendix A to the report (November 16, 2020) from the Deputy City Manager, Corporate Services, and the Acting President, Toronto Parking Authority;

b. the City sale to DevGreat Inc. of a 249 square meter portion of 363 Adelaide Street West as outlined in Appendix B to the report (November 16, 2020) from the Deputy City Manager, Corporate Services, and the Acting President, Toronto Parking Authority;

c. the City sale to DevGreat Inc. of the underground strata lands under the City park lands as outlined in Appendix C to the report (November 16, 2020) from the Deputy City Manager, Corporate Services, and the Acting President, Toronto Parking Authority with the result of the transactions described in a., b., and c.being that DevGreat Inc. will own the lands for the proposed development (the "Development Lands") and the City will own the strata lands for the new City park (the "Strata Park Lands");

d. the acquisition of stratified freehold title to portions of the underground parking garage containing a minimum of 70 parking spaces to be constructed by DevGreat Inc. to Toronto Parking Authority standards on the Development Lands (the "Public Parking Garage") as outlined in Appendix D to the report (November 16, 2020) from the Deputy City Manager, Corporate Services, and the Acting President, Toronto Parking Authority; and

e. the construction and delivery of a new public park at grade to be fully constructed by DevGreat Inc. and being approximately 1,000 square metres in area located at the corner of Spadina Avenue and Adelaide Street West within the Strata Park Lands (the "Public Park");

substantially on the terms and conditions set out in Appendix E to the report (November 16, 2020) from the Deputy City Manager, Corporate Services, and the Acting President, Toronto Parking Authority, including the confidential sale prices of the City sales and acquisition price for the Public Parking Garage and substantially in accordance with the estimated land values for the land exchange and estimated consideration for ancillary transactions, all as set out in Confidential Attachment 1 to the report (November 16, 2020) from the Deputy City Manager, Corporate Services, and the Acting President, Toronto Parking Authority, and together with such other terms and conditions as may be deemed appropriate by the Executive Director, Corporate Real Estate Management, in consultation with the Acting President, Toronto Parking Authority in respect of the Public Parking Garage and in consultation with the General Manager, Parks, Forestry and Recreation in respect of the Public Park, and in a form satisfactory to the City Solicitor.

2. City Council authorize the City to enter into all agreements and documentation contemplated under the Agreement of Purchase and Sale which require the City to be a party, solely in its capacity as land owner, including any construction and/or construction management agreements pertaining to the Public Parking Garage and/or the Public Park, easements, reciprocal cost sharing agreements, restrictive covenant agreements, limiting distance agreements, licence and/or occupancy agreements, closing documents and other agreements (the "Ancillary Transactions") on such terms and conditions as deemed appropriate by the Executive Director, Corporate Real Estate Management, in consultation with the Acting President, Toronto Parking Authority in respect of the Public Parking Garage and in consultation with the General Manager, Parks, Forestry and Recreation in respect of the Public Park, and in a form satisfactory to the City Solicitor.

3. City Council authorize the Executive Director, Corporate Real Estate Management, or their designate, in consultation with the Acting President, Toronto Parking Authority and the General Manager, Parks, Forestry and Recreation as applicable, to administer and manage the Agreement of Purchase and Sale and Ancillary Transactions, including the provision of any consents, approvals, waivers and notices, provided that the Executive Director, Corporate Real Estate Management may, at any time, refer consideration of such matters to City Council for its determination and direction.

4. City Council authorize any one of the Deputy City Manager, Corporate Services, the Executive Director, Corporate Real Estate Management, and the Director, Transaction Services, to execute and deliver the Agreement of Purchase and Sale and each of the Ancillary Transactions, on behalf of the City.  

5. City Council authorize the Executive Director, Corporate Real Estate Management, or their designate, to execute and deliver on behalf of the City, solely in its capacity as land owner, written consent to any planning or development application contemplated under the Agreement of Purchase and Sale, provided the applicant agrees to assume all obligations including costs and liabilities under such applications, and subject to such other terms and conditions deemed satisfactory to the Executive Director, Corporate Real Estate Management, and in form satisfactory to the City Solicitor.

6. City Council direct that any consent provided by the City, solely in its capacity as land owner, to a planning or development application shall not fetter the exercise by the City of all of its rights as a municipality, or impose any obligations on the City, in its role as a municipality, and the City shall not be prevented from or prejudiced in carrying out its statutory rights and responsibilities, including planning rights and responsibilities.

7. City Council direct that prior to all acquisitions by the City contemplated in these Recommendations, the City be in receipt of title opinions from the solicitors for DevGreat Inc., in form and content satisfactory to the City Solicitor.

8. City Council direct that the lands acquired for the Public Parking Garage be designated by bylaw for municipal parking purposes and managed by the Toronto Parking Authority.

9. City Council authorize the Executive Director, Corporate Real Estate Management, and the Executive Director, Housing Secretariat, to allocate all proceeds from transactions set out in this report, net of the funds required for the acquisition of the Public Park and the Public Parking Garage, to the Capital Revolving Reserve Fund for Affordable Housing (XR1058) with a commitment to the acquisition of affordable housing units in the area.  

10. City Council direct the Executive Director, Housing Secretariat, to work with the Chief Executive Officer, CreateTO, on a plan to redevelop the properties located at 15 Denison Avenue and 35 Bellevue Avenue for affordable housing use, and that consideration be given to selecting a not-for-profit partner as the development partner for both of these properties.

11. City Council direct the General Manager, Transportation Services, to work with the Acting President, Toronto Parking Authority, and the Chief Executive Officer, CreateTO, to locate replacement parking and implement the required by-law changes to compensate for the future loss in surface parking from both 15 Denison Avenue and 25 Bellevue Avenue.

12. City Council accept the acquisition of the 214 square metres of the land exchange component of the transaction so that all of the Public Park lands (including the City-retained lands for the Public Park) will be in City ownership prior to the issuance of the first above grade building permit, notwithstanding that the Public Park will be encumbered by an underground parking structure containing a Toronto Parking Authority operated facility in the upper levels, and may also be encumbered by Ancillary Transactions.

13. City Council approve a development charge credit against the Parks and Recreation component of the development charges for the design and construction by DevGreat Inc. of the above base park improvements to the satisfaction of the General Manager, Parks, Forestry and Recreation and in an amount that is the lesser of the cost to DevGreat Inc. of designing and constructing the above base park improvements, as approved by the General Manager, Parks, Forestry and Recreation, and the Parks and Recreation component of development charges payable for the development in accordance with the City's Development Charges By-law, as may be amended from time to time.

14. City Council approve that DevGreat Inc. will pay their cash-in-lieu of parkland dedication associated with the development site prior to the issuance of the first Above Grade Building Permit to fulfill its obligations under Section 42 of the Planning Act and Municipal Code Chapter 415, Article III.

15. City Council authorize the public release of Confidential Attachment 1 to the report (November 16, 2020) from the Deputy City Manager, Corporate Services, and the Acting President, Toronto Parking Authority, following the closing of the land exchange and sale transactions, the acquisition of the Public Parking Garage and the delivery of the Public Park, as identified in the report (November 16, 2020) from the Deputy City Manager, Corporate Services, and the Acting President, Toronto Parking Authority.

The purpose of this report is to obtain City Council's approval of the proposed terms of a property transaction involving two City-owned properties at 105 Spadina Avenue and 363 Adelaide Street West, and the privately owned property at 101 Spadina Avenue, owned by DevGreat Inc. The city-building benefits of this transaction are to create a new public park of 1,000 square meters (10,764 square feet), to significantly increase onsite below-grade public parking and to generate additional funds to be used for affordable housing.

As currently proposed, the transaction contemplates the partial land exchange and partial disposition of the City-owned surface parking lots at 105 Spadina Avenue and 363 Adelaide Street West to DevGreat Inc., the owner of the adjacent property at 101 Spadina Avenue.

Following the proposed land exchange and disposition, DevGreat Inc. will own the lands (the "Development Lands") for the development of a mixed-use high-rise development with public and private parking below-grade under both the proposed development site and the new public park (the "Proposed Development"). In respect of the retained strata public park in City ownership, the transaction requires DevGreat Inc. to construct a minimum 1,000 square meter park to base park condition with above grade improvements satisfactory to Parks, Forestry and Recreation. The Proposed Development consists of a 39-storey, mixed-use building with 28,107 square meters (302,541 square feet) of total gross floor area. A Zoning By-Law Amendment application has not yet been submitted by DevGreat Inc. and the final height of the development and mix of residential and non-residential gross floor areas are still to be finalized through the planning approval process, however as per the proposed transaction terms, the final height is not to exceed the currently proposed 39-storeys.

The 1,000 square meter stratified public park would be the result of the proposed real estate transaction between the City and DevGreat Inc. and is not to be considered the parkland dedication associated with the development application. The development application to be submitted by DevGreat Inc. will be subject to parkland dedication requirements to fulfill Section 42 of the Planning Act. For the development application, cash-in-lieu of parkland dedication will be required as per the Municipal Code Chapter 415, Article III. 

The new public park will be prominently placed at the southeast corner of Spadina Avenue and Adelaide Street West in a rectangular shape with good frontage and visibility from both abutting streets. The new public park is a positive addition to the downtown core as it regularizes the land parcels for both the City and DevGreat Inc. and creates a large green space amenity. DevGreat Inc., at their expense, will construct the retained City-owned public park to base park condition, inclusive of three (3) meters of soil depth, prior to the issuance of the first above grade building permit. DevGreat Inc. has agreed to construct the above base park improvements through a development charge credit against the Parks and Recreation component of the Development Charges applicable to the development site. The design of the public park will adhere to the City's Design Excellence standards. A minimum of 70 below-grade parking stalls will be constructed in accordance with Toronto Parking Authority specifications and operated by the Toronto Parking Authority as a municipal parking facility. As the proposed public park will be encumbered with a Toronto Parking Authority parking facility, City Council approval is required to accept these lands.

All remaining proceeds from this transaction are to be used by the Housing Secretariat and CreateTO to acquire an estimated 20-30 new affordable housing units in the area, with specific focus on potential affordable housing opportunities at the City-owned properties, 35 Bellevue Avenue and 15 Denison Avenue.

Staff conducted prior analysis and due diligence, and considered alternate options for unlocking the value of City assets at 105 Spadina Avenue and 363 Adelaide Street West. Given the financial and city-building merits of the proposal (including additional public parking spaces and public parkland in areas of significant deficiency), it was deemed to best meet the City's interest.