Item - 2021.EX27.5

The Executive Committee recommends that:  

1. City Council authorize the Executive Director, Corporate Real Estate Management and the City Solicitor to negotiate with the Silver Hotel Group for the sale of the Subject Property based on the appraised value of Subject Property A as outlined in Confidential Attachments 1 and 2 to the report (October 13, 2021) from the Deputy City Manager, Corporate Services and City Council authorize severally each of the Executive Director, Corporate Real Estate Management and the Director, Transaction Services, Corporate Real Estate Management to accept, on behalf of the City, an Offer to Purchase from the Silver Hotel Group that meets the requirements set out in Confidential Attachments 1 and 2 to the report (October 13, 2021) from the Deputy City Manager, Corporate Services and is otherwise in a form and substance acceptable to the City Solicitor.

2. City Council declare a portion of the City-owned property at 249 Queens Quay West surplus, with the intended manner of disposal to be by way of a stratified interest to Silver Hotel Group and City Council direct staff to take all steps necessary to comply with the City of Toronto's real estate disposal process in Article 1 of City of Toronto Municipal Code Chapter 213, Real Property.

3. City Council authorize the Executive Director, Corporate Real Estate Management to engage a third party property surveyor to determine the stratified interest of Subject Property A to be conveyed as a result of any purchase.

4. City Council authorize the Executive Director, Corporate Real Estate Management to use a portion of the net proceeds from the sale of Subject Property A for due diligence work, including surveying work for both Subject Property A and B, and to ensure that the Silver Hotel Group's account in respect of its lease of Subject Property A is reconciled and that the lease is in good standing prior to the closing of any proposed transaction.

5. City Council authorize the Executive Director, Corporate Real Estate Management, in consultation with the Chief Executive Officer, CreateTO and the General Manager, Economic Development and Culture, to work with the Harbourfront Centre and the Federal Government on a mutually agreeable arrangement in relation to the Implementation Agreement with respect to the allocation of the sale proceeds from the Subject Property as set out in Confidential Attachment 2 to the report (October 13, 2021) from the Deputy City Manager, Corporate Services.

6. City Council direct the Controller to transfer a portion of the proceeds, identified in Confidential Attachment 1 to the report (October 13, 2021) from the Deputy City Manager, Corporate Services, from the disposal of Subject Property A to the Land Acquisition Reserve Fund (XR1012) and designate that these proceeds are to be used for the Multi-Unit Residential Acquisitions Program managed by the Executive Director, Housing Secretariat with support from the Executive Director, Corporate Real Estate Management.

7. City Council authorize the General Manager, Economic Development and Culture, in consultation with CreateTO, to develop a strategy with Harbourfront Centre to identify new revenue generation opportunities by leveraging the real estate assets on their site.

8. City Council authorize the public release of Confidential Attachments 1 and 2 to the report (October 13, 2021) from the Deputy City Manager, Corporate Services following the closing of the transaction.

CreateTO and Corporate Real Estate Management, in partnership with Economic Development and Culture, the Housing Secretariat, and with support from the Harbourfront Centre, have been pursuing an opportunity to explore the disposal of a stratified interest in the City owned property located at 249 Queens Quay West, shown on the site profile attached hereto as Appendix 1 ("Subject Property A"). Subject Property A was identified by the City of Toronto as an under-leveraged asset that could be better utilized to support other city building opportunities. Subject Property A is owned by the City of Toronto and is tenanted by 1548383 Ontario Limited, o/a Silver Hotel Group (the "Silver Hotel Group"). The Silver Hotel Group operates the Radisson Admiral Hotel Toronto Harbourfront on Subject Property A.

CreateTO and Corporate Real Estate Management, working with the Housing Secretariat, identified the opportunity to dispose Subject Property A to support the 2020 direction from Council to establish an ongoing Municipal Small Sites Rental Housing Acquisition Program. After completing a successful pilot project to protect rooming houses for long-term affordability, the Housing Secretariat is bringing forward a report, the New Multi-Unit Residential Acquisition (MURA) Program to Protect Existing Affordable Rental Homes that establishes and outlines the implementation of an acquisition program to Planning and Housing Committee in October 2021. The MURA program will grant funds to non-profit housing organizations or community land trusts to facilitate the purchase and conversion of at-risk private market affordable rental housing into permanently affordable housing. The net proceeds resulting from the disposal of Subject Property A would be designated as a funding source for MURA.

The City acquired Subject Property A through an implementation agreement (the "Implementation Agreement") dated October 6, 1992 between Harbourfront Corporation (now Harbourfront Corporation (1990)) and Her Majesty the Queen in Right of Canada, as represented by the Minister of Public Works (now the Minister of Public Services and Works) (the "Federal Government").  As part of the Implementation Agreement, the City is to deposit the net income or net proceeds realized by the City from the use of Subject Property A to the Harbourfront Foundation. However, Staff and the Harbourfront Centre have reached agreement on a proposal that would allow the City to satisfy its obligations under the Implementation Agreement and provide significant support to this important cultural institution while at the same time, retain a portion of the net proceeds of the sale to support funding for the Multi-Unit Residential Acquisitions Program.

An initial property to be assessed for acquisition under MURA is the Parkview Arms Hotel, a rooming house offering 58 furnished rooms at 935 Queen Street West (“Subject Property B”) as shown on the site profile attached hereto as Appendix 3, also owned by the Silver Hotel Group.

The strategic disposal of Subject Property A and potential acquisition of Subject Property B would support Council's goals set out in the HousingTO 2020-203 Action Plan and direction set in 2020 to establish a program to acquire small sites for affordable housing purposes. These transactions follow the principles set out in the City-Wide Real Estate Model, namely that the City should consider selling a real estate asset if it maximizes its value to the City, and net proceeds are to be invested into real estate assets to support City programs.