Item - 2023.GG7.9

The General Government Committee recommends that:

1. City Council authorize the City to enter into lease extension agreements (the “Extension Agreements”) with 51 commercial tenants, as listed in Appendix A, for the use of approximately 37,390 square feet of area within the building known municipally as St. Lawrence Market South building located at 91-95 Front Street (the “Leased Premises”) for a further term of five years (the "Extension Term") from January 1, 2020, to December 31, 2024, substantially on the terms and conditions set out in Appendix B, and on such other terms and conditions as approved or amended 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 City to enter into a licence and a lease agreement with 8803552 Canada Inc. (operating as "ChocoSol Traders") (the “ChocoSol Agreements”), substantially on the terms and conditions set out in Appendix C, and on such other terms and conditions as approved or amended by the Executive Director, Corporate Real Estate Management, or their designate, and in a form acceptable to the City Solicitor.

3. City Council authorize the Executive Director, Corporate Real Estate Management, to negotiate, approve and enter into an interest-free rent deferral agreement with 8803552 Canada Inc., to defer rent payable from July 1, 2020, to October 31, 2022 (the “ChocoSol Rent Deferral Agreement”), and such agreement to be in a form satisfactory to the City Solicitor.

4. City Council authorize the Executive Director, Corporate Real Estate Management to further extend the initial rent deferral period from April 1, 2020, to December 31, 2020 (authorized under Item Number CC24.02), as extended until June 30, 2021 (authorized under Item Number EX21.2) until October 31, 2022, provided that such qualifying tenant or licensee had a lease or a licence that was in good standing prior to April 1, 2020.

5. City Council authorize the Executive Director, Corporate Real Estate Management and the Director, Property Management Services severally to execute and deliver the Extension Agreements, the ChocoSol Agreements, the ChocoSol Rent Deferral Agreement, the rent deferral agreements, and any related documents contemplated thereunder on behalf of the City.

6. City Council authorize the Director, Property Management Services, or their designate, to administer and manage the Extension Agreements, the ChocoSol Agreements, the ChocoSol Rent Deferral Agreement, the rent deferral agreements, and amendments, including the provision of any consents, approvals, waivers, notices, and notices of termination, provided that the Director, Property Management Services, may, at any time, refer consideration of such matters to City Council for its determination and direction.

The purpose of this report is to obtain City Council authority to enter into numerous real estate related agreements in connection with the operation of St. Lawrence Market (South) (the "South Market") to ensure the financial sustainability of the South Market and continued success of its tenants. This report specifically seeks Council authority to:

 - Enter into lease extension agreements (the "Extension Agreements") with 51 commercial tenants for the use of approximately 37,390 square feet of space at the building municipally known as St. Lawrence Market South Market Building located at 91-95 Front Street East (the "Leased Premises") for a further term of five years (the "Extension Term");

- Enter into a licence and a lease agreement with 8803552 Canada Inc. (operating as "ChocoSol Traders") (the “ChocoSol Agreements”);

- Negotiate, approve, and enter into an interest-free rent deferral agreement with 8803552 Canada Inc., to defer rent payable from July 1, 2020, to October 31, 2022 (the “ChocoSol Rent Deferral Agreement”); and

- Further extend the initial rent deferral period until October 31, 2022.

The tenants within the South Market have been occupying the Leased Premises on a month-to-month basis under lease agreements that have been in overhold since January 1, 2020. Although the City had initially planned to negotiate the extension of various leases during 2020, the onset of the COVID-19 pandemic resulted in an indefinite postponement and instead, focused on supporting tenants through the pandemic to stimulate business recovery and avoid vacancy loss. With the pandemic concluding and the recovery of both the retail and tourism sectors having substantially occurred, Corporate Real Estate Management ("CREM") engaged with South Market tenants throughout 2023 to negotiate and extend the lease agreements. The Extension Term aligns with the implementation of the recently finalized five-year strategic plan for the St. Lawrence Market District, developed in partnership with the St. Lawrence Market Precinct Advisory Committee ("SLMPAC), a civic committee that is an advocate for the Market Precinct and that assists the City in making key management decisions so that the Precinct maximizes its excellence as a vital, dynamic, and beautiful space that celebrates its heritage.