Item - 2021.RA20.6

The Board of Directors of CreateTO:

1.  Directed the Interim Chief Executive Officer to report back to the next meeting of the CreateTO Board with a revised report that reflects any changes required as a result of the input of the Board from this meeting and consult with the City Manager in order to provide direction from the City of Toronto to CreateTO with respect to City priorities and strategic initiatives in the area of the proposed development at 11 Bay Street.

2.  Authorized the public release of the information in Confidential Attachment 1 to the report (December 23, 2020) from the Interim Chief Executive Officer, Create TO, when and if a finalized lease extension or notice of the lease extension is registered on title, and at the discretion of the Chief Executive Officer.

The Board of Directors of CreateTO recessed its public session to meet in closed session to consider the item as it pertains to a proposed or pending acquisition or disposition of land by the Board of Directors of CreateTO.

The Interim Chief Executive Officer, CreateTO gave a presentation on 11 Bay Street - Proposed Transaction.

The purpose of this report is to seek comments from the Board of CreateTO on the proposed lease terms negotiated between staff of CreateTO and QuadReal Property Group Limited Partnership ("QuadReal") and Barney River Investments Limited ("Barney River"), the managers acting on behalf for the tenant, in connection with a proposed long-term lease renewal/new lease agreement (“Lease Extension”) to permit redevelopment of the City-owned property at 11 Bay Street (the "Subject Property"). QuadReal and Barney River have proposed a complete redevelopment of the Subject Property which will result in a new office tower and rebuilt convention centre at grade. 

The current term of the existing ground lease between the City of Toronto, as landlord ("City") and SCG Aquarius Toronto Hotel, Inc., as tenant and SCG Aquarius Toronto Hotel, Inc., in its capacity as General Partner for SWA Toronto L.P., as beneficial tenant (collectively the "Tenant") for 11 Bay Street expires on May 31, 2030, with the option of two subsequent 5 year renewal terms. These options may be exercised by the Tenant in accordance with the terms of the ground lease, but the City has retained the absolute discretion on whether or not to grant the renewal options. At the end of the lease term, the Tenant is required to surrender the Subject Property and all buildings and improvements thereon to the City.

As part of this proposed Lease Extension, CreateTO has been working with the City's Parks, Forestry and Recreation, Community Planning and Economic Development divisions to understand the opportunities that exist within this proposal for the Subject Property itself, and within the broader public realm in the Central Waterfront. Along with a new office tower and rebuilt convention centre, there is an opportunity to leverage this City owned asset to partially fund significant public realm improvements in the Central Waterfront area, along with negotiating into the lease agreement, obligations for design excellence, sustainability and connectivity along with ground level activation.

CreateTO and Community Planning have identified this redevelopment of the Subject Property as an excellent candidate to help advance the Mayor and Council's Urban Design Initiative.