Item - 2021.GL25.8

The General Government and Licensing Committee recommends that:

1. City Council authorize the City to enter into a lease (the "Lease") with Her Majesty the Queen in Right of Ontario as Represented by The Minister of Government and Consumer Services, as Represented by Ontario Infrastructure and Lands Corporation (the "Tenant"), for a term of ten (10) years commencing September 1, 2018 with the option to extend for an additional five (5) years, for part of the City-owned building at 111 Wellesley Street East, substantially on the major terms and conditions as set out in Appendix A to the report (August 31, 2021) from the Executive Director, Corporate Real Estate Management, including such other terms and conditions as may be deemed appropriate by the Executive Director, Corporate Real Estate Management, or their designate, and in a form acceptable to the City Solicitor.

2. City Council authorize the Executive Director, Corporate Real Estate Management, or their designate, from time to time, to administer and manage the Lease, including the provision of any consent, approval, waiver, notice, and notice of termination, provided that the Executive Director, Corporate Real Estate Management may, at any time, refer consideration of such matter (including the content) to City Council.

The purpose of this report is to obtain authority to enter into a retroactive lease agreement with Her Majesty the Queen in Right of Ontario as Represented by The Minister of Government and Consumer Services, as Represented by Ontario Infrastructure and Lands Corporation (the "Tenant"), for the lease of approximately 7,085 square feet of dedicated space (the "Leased Premises") and the use of approximately 8,563 square feet of shared space (the "Tenant's portion of the Shared Facilities") within portions of the first, second, and third floors of the City-owned building at 111 Wellesley Street East, Toronto, totalling 15,648 square feet, for the purposes of co-locating Toronto Employment and Social Services and Ontario Disability Support Program for a term of ten (10) years with the option to extend for an additional five (5) years commencing September 1, 2018 (the "Lease"). Due to operational demands in 2018 and the subsequent COVID-19 pandemic, staff were unable to move forward with the negotiation and execution of a lease agreement with the Tenant prior to the occupancy of Ontario Disability Support Program within the Leased Premises. As such, the Lease will be executed after the commencement date.

The City completed renovations of 111 Wellesley Street East to accommodate the shared Toronto Employment and Social Services and Ontario Disability Support Program uses at this location and the Tenant has already fully paid its proportionate share of the renovation costs to the City. The Tenant has been occupying the Leased Premises since the summer of 2018. The rent and other terms and conditions of the Lease over the ten (10) year term reflect market conditions at the time of negotiations in 2018 according to market research and valuation conducted by Corporate Real Estate Management staff.