Item - 2022.EP22.10

The Board of Governors of Exhibition Place:

1.  Authorized the Chief Executive Officer to request the necessary City of Toronto authorities to arrange for the City of Toronto’s consent, as landlord, to the assignment by 16730801 Ontario Inc. of the tenant’s interest in the lease dated May 1, 2020 between the City of Toronto, as landlord, 16730801 Ontario Inc., as tenant, and The Board of Governors of Exhibition Place, to QET Operations Ltd.

The Board and 16730801 Ontario Inc. (the "Tenant") entered into a lease for the Queen Elizabeth Theatre (the "QET") dated May 1, 2008, as amended by a Lease Amending Agreement dated May 1, 2010 and a Lease Amending Agreement dated May 9, 2018 which expired on April 30, 2020.

At its meeting of June 13, 2019 the Board approved, subject to City of Toronto ("City") authorization, a new lease between the City as Landlord and the Tenant for a term of ten (10) years commencing May 1, 2020 and ending April 30, 2030.

At its meeting of September 19, 2019, the Board approved a new lease between the City as Landlord and the Tenant for the Fountain Dining Room located adjacent to the QET, which is also currently leased by the Tenant. The approved term of this new lease was also for ten (10) years commencing May 1, 2020 and ending April 30, 2030.

At its meeting of February 11, 2020, the Board, approved a new lease for the Queen Elizabeth Theatre between the City, as landlord, 16730801 Ontario Inc., as tenant, and the Board, for a term of ten (10) years commencing May 1, 2020 and ending April 30, 2030, with an option to extend the Lease in favour of the Tenant for a further term of ten (10) years from May 1, 2030 to April 30, 2040. Subsequently, the parties entered into a lease on these terms and conditions (the "Lease").

The Board also approved at its meeting of February 11, 2020 a term of ten (10) years for the Fountain Dining Room lease, with an option to extend the Lease in favour of the Tenant for a further term of ten (10) years from May 1, 2030 to April 30, 2040, which would make both leases coterminous. The parties entered into a lease on these terms and conditions. The tenant is also requesting an assignment of Fountain Dining Room lease which is the subject of a separate report.

By letter dated October 4, 2021, the Tenant provided a written request for consent to an assignment of the Lease to QET Operations Ltd., a single purpose subsidiary of the MRG Group ("MRG"), pursuant to an asset purchase agreement between the Tenant and MRG. Article 16.2 of the Lease provides that the Tenant shall not assign, in whole or in part, this Lease or the leasehold interest of the Tenant in the Leased Property, or otherwise dispose of same, without first obtaining the written consent of the Landlord, which consent may be unreasonably withheld.

The Board approve in principle the assignment by 16730801 Ontario Inc. as Tenant of its interest in the Lease to QET Operations Ltd and recommend that the City, as Landlord, approve the assignment of the Lease.

Staff have reviewed certain information provided by MRG to Exhibition Place and City Corporate Real Estate Management staff and are satisfied with recommending this assignment of the Lease to QET Operations Ltd.