Item - 2024.EX15.1

The Executive Committee recommends that:

1. City Council authorize the City Manager, in consultation with the Chief Planner and Executive Director, City Planning, the Executive Director, Transit Expansion, the General Manager, Transportation Services and the City Solicitor, to conclude negotiations and enter into and execute a site-specific Transit Oriented Communities Agreement with the Province of Ontario as represented by the Minister of Infrastructure and the Ontario Infrastructure and Lands Corporation, including provisions relating to the transfer of funding provided by Cadillac Fairview and the Province for the construction of new City infrastructure and coordination of infrastructure projects in the area, based on the terms outlined in Attachment 2 to the report (June 4, 2024) from the Deputy City Manager, Infrastructure Services and such other terms and conditions satisfactory to the City Manager, on condition that the Contribution Agreement between the Province and Cadillac Fairview (the "Owner) is amended as necessary to ensure consistency with the terms of site-specific Transit Oriented Communities Agreement and that the Transit Services/Operating Agreement has been entered into between Metrolinx and Cadillac Fairview, and to enter into any such ancillary or related agreements, amendments, extensions and renewals as may be necessary, on such terms and conditions as are satisfactory to the City Manager, in consultation with the above named City officials, all in a form satisfactory to the City Solicitor.

2. City Council authorize the City Manager, in consultation with the Deputy City Manager, Infrastructure Services and the City Solicitor, to conclude negotiations and execute Project Delivery Agreements with Waterfront Toronto, on terms and conditions satisfactory to the Deputy City Manager, Infrastructure Services, and in a form satisfactory to the City Solicitor, for the full implementation of the Preferred Design of the Broadview Eastern Flood Protection project Environmental Assessment, including completion of design and construction, subject to City Council budget approvals.

3. City Council authorize the City Manager, in consultation with the Chief Planner and Executive Director, City Planning, the General Manager, Parks, Forestry and Recreation, the General Manager, Children's Services and the City Solicitor, to conclude negotiations, enter into and execute a Development Agreement with Cadillac Fairview and the Province of Ontario as represented by the Minister of Infrastructure and the Ontario Infrastructure and Lands Corporation to secure among other matters two childcare centres and a community recreation centre, based on the terms outlined in Attachment 3 to the report (June 4, 2024) from the Deputy City Manager, Infrastructure Services and such other terms and conditions satisfactory to the City Manager and in a form satisfactory to the City Solicitor.

4. City Council authorize the City Manager, in consultation with the Executive Director, Housing Secretariat, the Chief Planner and Executive Director, City Planning and the City Solicitor, to conclude negotiations, enter into and execute an Affordable Housing Agreement with Cadillac Fairview and its related nominees/corporations and the Province of Ontario as represented by the Minister of Infrastructure and the Ontario Infrastructure and Lands Corporation based on the terms outlined in Attachment 4 to the report (June 4, 2024) from the Deputy City Manager, Infrastructure Services and such other terms and conditions satisfactory to the City Manager and in a form satisfactory to the City Solicitor and to enter into and execute any ancillary and related site-specific affordable housing agreements in consultation with the Executive Director, Housing Secretariat, the Chief Planner and Executive Director, City Planning and the Chief Financial Officer and Treasurer all in a form satisfactory to the City Solicitor, but only provided that the aforementioned agreements are able to be registered on title and binding on successor owners, to the satisfaction of the City Solicitor.

5. City Council authorize the Executive Director, Housing Secretariat, in consultation with the Chief Financial Officer and Treasurer and the City Solicitor, to execute any security or financing documents as they relate to the Affordable Housing Agreement with Cadillac Fairview and its related nominees/corporations and the Province of Ontario as represented by the Minister of Infrastructure and the Ontario Infrastructure and Lands Corporation and any site-specific affordable housing agreement, or any other documents required to facilitate the affordable housing development and related activities, construction and secure conventional financing, where required, including any postponement, confirmation of status, discharge or consent documents where and when required during the term of the applicable affordable housing agreement, as required by normal business practices, and provided that such documents do not give rise to financial obligations on the part of the City that have not been previously approved by City Council, all in a form satisfactory to the City Solicitor, but only provided that the aforementioned agreements are able to be registered on title and binding on successor owners, to the satisfaction of the City Solicitor.

6. In accordance with the delegated approval under By-law 229-2000, as amended, City Council be advised that the Chief Planner and Executive Director, City Planning or delegate intends to approve the Draft Plan of Subdivision as generally illustrated in Attachment 6d to the report (June 4, 2024) from the Deputy City Manager, Infrastructure Services subject to:

a. the conditions as generally listed in Attachment 6e to the report (June 4, 2024) from the Deputy City Manager, Infrastructure Services which, except as otherwise noted, must be fulfilled prior to final approval and the release of the Plan of Subdivision for registration; and

b. any such revisions to the proposed subdivision plan or any such additional modified conditions as the Chief Planner and Executive Director, City Planning may deem to be appropriate to address matters arising from the on-going technical review of this development.

7. Notwithstanding Chapter 415-28 of the Municipal Code, City Council authorize the conveyance of Phase 2 parkland, being Block 11 on the Draft Plan of Subdivision shown on Attachment 6d to the report (June 4, 2024) from the Deputy City Manager, Infrastructure Services to occur prior to issuance of the final building permit for any building within Phase 2 of the Plan of Subdivision.

8. Notwithstanding Section 415-26B of the Municipal Code, City Council authorize the conveyance of Block 26 on the Draft Plan of Subdivision containing infrastructure to service Block 11 on the Draft Plan of Subdivision, as shown on Attachment 6d to the report (June 4, 2024) from the Deputy City Manager, Infrastructure Services, to the satisfaction of the General Manager, Parks, Forestry and Recreation and the City Solicitor.

9. City Council authorize the appropriate City officials to enter into a limiting distance agreement, if necessary, with the Owner of the lands to address the relationship between the future development on Block 4 and Block 26 of the Draft Plan of Subdivision as shown on Attachment 6d to the report (June 4, 2024) from the Deputy City Manager, Infrastructure Services and determine that the facilitation of appropriate municipal servicing and associated land ownership be due consideration, all to the satisfaction of the General Manager, Parks, Forestry and Recreation, in consultation with the City Solicitor.

10. City Council authorize the General Manager, Parks, Forestry and Recreation, the General Manager, Transportation Services and the Executive Director, Corporate Real Estate Management to accept the conveyance of the East Harbour Flood Protection Landform and Buffer Zone, including the portion of Street East that traverses the East Harbour Flood Protection Landform, on terms acceptable to the General Manager, Transportation Services, the General Manager, Parks, Forestry and Recreation and the Executive Director, Corporate Real Estate Management, in consultation with the City Solicitor, which may include a restrictive covenant in favour of the Toronto Region Conservation Authority or other form of encumbrance with the purpose of protecting the structural integrity of the flood protection landform.   

11. City Council approve development charge credits or exemptions for the proposed development at East Harbour as follows:

a. a development charge credit against the Parks and Recreation component of the Development Charges for the design and construction by the Owner of the Above Base Park Improvements to the satisfaction of the General Manager, Parks, Forestry and Recreation; the development charge credit shall be in an amount that is the lesser of the cost to the Owner for the design and construction of the Above Base Park Improvements as approved by the General Manager, Parks, Forestry and Recreation and the Parks and the Recreation component of development charges for Phases 2 and 3 respectively, payable for the development in accordance with the City's Development Charges By-law, as may be amended from time to time;

b. a Development Charge credit against the Storm Water Management component of the Development Charges applicable to the development, for the design and construction by the Owner of the eligible upsizing of stormwater infrastructure to the satisfaction of the Chief Engineer and Executive Director, Engineering and Construction Services; the development charge credit shall be in an amount that is the lesser of the eligible cost to the Owner of the eligible upsizing the stormwater infrastructure and the Storm Water Management component of the development charges payable for the development as approved by the General Manager, Toronto Water, in consultation with the Chief Planner and Executive Director, City Planning, in accordance with the City’s Development Charges By-law, as may be amended from time to time, to a maximum of $3.3 million;

c. a Development Charge credit against the Sanitary Sewer component of the Development Charges applicable to the development, for the design and construction by the Owner of the eligible upsizing of sanitary infrastructure to the satisfaction of the Chief Engineer and Executive Director, Engineering and Construction Services; the development charge credit shall be in an amount that is the lesser of the eligible cost to the Owner of the eligible upsizing the sanitary infrastructure and the Sanitary Sewer component of the development charges payable for the development as approved by the General Manager, Toronto Water in accordance with the City’s Development Charges By-law, as may be amended from time to time, to a maximum of $1.4 million;

d. a Development Charge credit against the Transit Component of the development charge for the design and construction by the Owner of the eligible Toronto Transit Commission base infrastructure within the Broadview Avenue Extension right of way to the satisfaction of the Toronto Transit Commission but only as necessary to address costs incurred by the Owner in excess of $5 million in relation to this work; the development charge credit shall be in an amount that is the lesser of the eligible cost to the Owner of constructing the transit base infrastructure within the Broadview Avenue Extension right of way that is above $5 million, as approved by the Toronto Transit Commission and the Transit component of the development charges payable for the development in accordance with the City’s Development Charges By-law, as may be amended from time to time; and

e. a Development Charge exemption for the Community Recreation Centre and the portions of any building containing a Child Care Facility or alternate community use.

12. City Council authorize the City Manager, in consultation with the Chief Financial Officer and Treasurer, the Chief Engineer and Executive Director, Engineering and Construction Services, the General Manager, Parks, Forestry and Recreation and the City Solicitor, to enter into and execute appropriate agreements to secure the development charge credits or exemptions as identified in Recommendations 11.a. to e. above, in appropriate agreements.

13. City Council authorize the Deputy City Manager, Infrastructure Services to negotiate and enter into an agreement between the City and the Owner to reimburse the Owner for the eligible design and construction costs to a value of $10 million for the East Harbour Flood Protection Landform, as approved by the Toronto and Region Conservation Authority and the Director, Waterfront Secretariat, and upon acceptance by the City, the reimbursement will be funded through a development charge credit against the East Harbour Port Lands Flood Protection and/or a development charge credit against the Storm Water Management component of the Development Charge payable for the development in accordance with the City's Development Charges By-law, as may be amended from time to time and/or through the approved budget for Broadview Eastern Flood Protection.

14. City Council accept deviations from the City’s Policy for Accepting Potentially Contaminated Lands to be Conveyed to the City under the Planning Act (2015) for the East Harbour lands being 21 Don Valley Parkway, 30 Booth Avenue and 375 and 385 Eastern Avenue, as set out below:

a. exempt the conveyance of lands comprising the future widening of the Don Roadway, being Block 13 on the Draft Plan of Subdivision shown on Attachment 6d to the report (June 4, 2024) from the Deputy City Manager, Infrastructure Services, from the Policy for Accepting Potentially Contaminated Lands to be Conveyed to the City under the Planning Act (2015), or as may be amended, and authorize City staff accept the conveyance of such lands in its current physical condition; 

b. exempt the conveyance of lands for future parks (Blocks 10, 11 and 26) and the East Harbour Flood Protection Landform (Blocks 15 and 25) as shown on the Draft Plan of Subdivision in Attachment 6d to the report (June 4, 2024) from the Deputy City Manager, Infrastructure Services from the application of Sections 5.1.2, 5.4.3, and 5.4.5 of the Policy for Accepting Potentially Contaminated Lands to be Conveyed to the City under the Planning Act (2015), or as may be amended, and any other sections that may be required to implement the conditions of draft plan approval, and authorize City staff to accept the conveyance of such lands that may be subject to Risk Management Measures that require ongoing monitoring of groundwater by the City and/or vapour mitigation during construction, following conveyance for such lands; and

c. exempt the conveyance of lands for future public roads as shown on the Draft Plan of Subdivision in Attachment 6d to the report (June 4, 2024) from the Deputy City Manager, Infrastructure Services from the application of Sections 5.1.2, 5.4.3, and 5.4.5 of the Policy for Accepting Potentially Contaminated Lands to be Conveyed to the City under the Planning Act (2015), or as may be amended, and any other sections that may be required to implement the conditions of draft plan approval, and authorize City staff to accept the conveyance of such lands that may be subject to Risk Management Measures that require ongoing monitoring of groundwater by the City and/or vapour mitigation during construction, following conveyance for such lands.

15. City Council authorize the City Manager, in consultation with the Chief Planner and Executive Director, City Planning, the General Manager, Transportation Services and the City Solicitor, to conclude negotiations, enter and execute a Toronto Transit Commission Infrastructure Agreement with the Owner and the Toronto Transit Commission to secure the construction by the Owner of base transit right of way improvements within Broadview Avenue between the rail corridor and Lake Shore Boulevard East on such terms and conditions satisfactory to the City Manager and in a form satisfactory to the City Solicitor.

16. If the Committee of Adjustment approves minor variances as described in the Implementing Agreements Section of the report (June 4, 2024) from the Deputy City Manager, Infrastructure Services, City Council require the Owner to enter into an Amended and Restated Section 37 Agreement, pursuant to Section 37 of the Planning Act (as it read the day before the date Section 1 of Schedule 17 of the COVID-19 Economic Recovery Act, 2020, came into force), to amend the existing Section 37 Agreement registered on title to the lands to implement the Committee’s decision, all to the satisfaction of the City Solicitor and the Chief Planner and Executive Director, City Planning.

17. City Council request the Toronto Port Lands Company Board of Directors to authorize any agency approvals necessary to enable the delivery and, once completed, the conveyance to the City of Broadview Avenue from the East Harbour lands to Lakeshore Boulevard East on Toronto Port Lands Company lands.

18. City Council direct staff to request that CreateTO, acting on behalf of Toronto Port Lands Company, negotiate and enter into a licence agreement for construction access and laydown with Cadillac Fairview Corporation Limited over portions of Toronto Port Lands Company lands, being described in PIN 21077-0147, located south of the Transit Oriented Community lands, which are necessary to enable delivery of the Transit Oriented Community development and improvements described in the report (June 4, 2024) from the Deputy City Manager, Infrastructure Services.

19. City Council delegate to the Executive Director, Corporate Real Estate Management the authority to approve, in consultation with the General Manager, Transportation Services, all necessary transactions required to effect the acquisition, and lease or licence if required, by the City of Toronto from the Toronto Port Lands Company of lands required to effect the extension of Broadview Avenue and such other road allowance extensions, as may be required, from the Transit Oriented Community lands to Lake Shore Boulevard East, at nominal consideration, upon the satisfaction of all requirements imposed upon the Owner in respect of same, and that such authority include the negotiation and execution of all agreements and documents as may be reasonably required to give effect thereto the terms of which shall be consistent with the intent set out herein and the financial parameters determined and approved by City Council.  

20. City Council authorize the appropriate City officials to enter into a limiting distance agreement, if necessary, with the Owner of the lands, to address the relationship between the 4C Building and the new City-owned Community Recreation Centre only and determine that a commensurate portion of the value of the Community Recreation Centre being constructed by the Owner to be due consideration.

21. City Council authorize the Deputy City Manager, Development and Growth Services and the Deputy City Manager, Infrastructure Services to engage in discussions with the Province and Cadillac Fairview related to Cadillac Fairview's request for further changes to land use permissions at East Harbour, based on the following initial conditions:

a. the provision of 20 percent of all new housing units as affordable housing for a term of 99 years and depending on the density increase in the area and on the same terms as the affordable housing provided for the first part of the East Harbour Transit Oriented Community;

b. the provision of additional community benefits at a rate of up to 10 percent on the value of new development;

c. a firm commitment to the protection of employment development at East Harbour, the phasing of employment development to coincide with residential development, and a specific approach to develop the film sector at East Harbour; and

d. a commitment to fully integrate the Toronto Port Lands Company owned Keating Lands into the revised East Harbour master plan and to acquire the lands to support important benefits, including an increase in affordable housing and expanding the Community Recreation Centre.

22. City Council request the Deputy City Manager, Development and Growth Services and the Chief Planner and Executive Director, City Planning to report back to City Council on the results of the discussions with the Province and Cadillac Fairview and to seek appropriate negotiating authorities as required.

23. City Council authorize the appropriate City officials to take such actions as are necessary to implement City Council's decision.

The Executive Committee held a statutory public meeting on June 18, 2024 and notice was given in accordance with the Planning Act.

This report presents the outcome of negotiations with the Province and Cadillac Fairview related to the East Harbour Transit Oriented Community (TOC) development.  In addition, the report seeks City Council approval to conclude a series of agreements based on the negotiated terms and advises Council of the Chief Planner's intention to issue Draft Plan of Subdivision approval subject to conditions (Draft Plan Conditions). The report also seeks City Council authority to continue discussions with the Province and Cadillac Fairview on an emerging proposal to adjust the current ratio of employment and residential permissions by increasing the amount of mixed use and residential development at East Harbour.

An essential element for the East Harbour TOC development is the East Harbour Transit Hub (the Transit Hub). The Transit Hub is a priority project for the City and the Province. Along with other major infrastructure investments in the area, the Transit Hub will be an economic catalyst creating opportunities for new employment and housing development in the broader area, as well as being essential for the East Harbour TOC development. City Council provided direction in April 2022 confirming City priorities for the East Harbour TOC, including the negotiated community benefits and affordable housing. Based on this direction, City staff have negotiated an overarching approach with the Province and Cadillac Fairview that effectively addresses City interests and requirements at East Harbour.

The East Harbour TOC development is based on terms outlined in a Contribution Agreement between the Province and Cadillac Fairview. The City is not a party to the Contribution Agreement and is restricted in its ability to negotiate given the key terms pre-determined by the Contribution Agreement. The Contribution Agreement establishes several Conditions Precedent (CPs) to be satisfied in order for Cadillac Fairview to release $300 million in cash and in-kind contributions to the City. The majority of the CPs relate to actions to be taken by the City, while certain other CPs relate to actions to be taken by the Provincial government and Metrolinx. Cash contributions will flow through the Province to the City according to the terms of the Contribution Agreement.

In April 2022, following City Council's approval of negotiating direction, the Province issued a Ministerial Zoning Order (MZO) to give effect to the TOC, granting Cadillac Fairview residential development permissions of 302,000 square metres (3.25 million square feet) at East Harbour. With the introduction of residential development at East Harbour, City staff have been guided by an overarching objective to create a liveable, functional mixed-use community, with appropriate supportive community services and facilities, parks and open space, affordable housing, and transportation and servicing infrastructure. Key objectives for City staff have been to ensure City interests are properly reflected in the terms of agreements with the Province and Cadillac Fairview, and to effectively manage financial and other risks to the City.  This includes a focus on limiting the impact of the TOC development on the remaining employment lands on the site and in the vicinity as directed by City Council.

As noted above, this report outlines the terms of several key agreements required by the CPs and seeks City Council authority to conclude and execute the agreements:

-A Site-Specific TOC Agreement between the City and the Province to set out the CPs and the manner in which the CF funds will flow to the city, details respecting Provincial and City funding commitments for infrastructure works and governance terms for the delivery of the Broadview Eastern Flood Protection project and the Broadview Avenue extension;

-A Development Agreement between the City, Cadillac Fairview and the Province related to requirements for the delivery of in-kind contributions including a community centre and two childcare centres and other aspects of the TOC development;

-An Affordable Housing Agreement between the City and Cadillac Fairview establishing the key terms for the delivery of 215 affordable housing units for 99 years at East Harbour; and

-Amendments to the existing Section 37 Agreement to reflect changes in the location and timing of the delivery of certain benefits.

The report also outlines conditions related to the Draft Plan of Subdivision and a Pre-Servicing Agreement with Cadillac Fairview. These also relate to CPs identified in the Contribution Agreement.

The New Deal between the City and Province includes terms regarding two key infrastructure projects in East Harbour – the Broadview Avenue Extension north of the rail corridor to Eastern Avenue, and the Broadview Eastern Flood Protection project.  The New Deal outlines commitments to funding for the delivery of these City infrastructure projects and provides direction relating to the design approach as well as roles and responsibilities of the City and the Province. This report provides more detail on an updated approach to implementing the Broadview Eastern Flood Protection project.

The outcomes of negotiations described in this report are based on Cadillac Fairview's existing East Harbour master plan. The master plan reflects 926,000 square metres (10 million square feet) of employment development approved by City Council in 2018 and the addition of 302,000 square metres (3.25 million square feet) of residential development approved through the Provincial MZO in 2022.

Cadillac Fairview's previous employment conversion request as part of the recent Municipal Comprehensive Review is being considered by Planning and Housing Committee in June 2024 to coincide with this broader East Harbour TOC report.  That report recommends the maintenance of the employment lands at East Harbour, except for the particular sites where the MZO provides for residential development.

While Cadillac Fairview has confirmed their commitment to concluding these negotiations, in late May 2024, Cadillac Fairview informed the Province and the City that with market conditions related to the office development and the costs of financing the East Harbour development, it intends to pursue with the Province further changes to the employment lands to allow more mixed use and residential development. 

The City has been clear throughout these TOC negotiations that any future change in the balance of residential and employment permissions on the East Harbour site will require additional affordable housing and other community benefits.  This report seeks guidance for City staff discussions with the Province and Cadillac Fairview.  City staff will report back to City Council with further information on the Cadillac Fairview proposal as it becomes available and will seek any required City Council direction.

Several initial City conditions are fundamental to this discussion and should be articulated to the Province and Cadillac Fairview as discussions begin. City staff recommend that City Council endorse several key conditions related to any changes to allow more residential development:

-Depending on the proposed density increase, City Council has set a target of 20% of all new housing units as affordable housing on the same 99 year affordability period as the affordable housing provided for the first part of the East Harbour TOC;

-The provision of additional community benefits at a rate of up to 10% on the new development, depending on what the market can bear

-A firm commitment to the protection of employment development, the phasing of employment development to coincide with residential development, and a specific approach to develop the film sector at East Harbour

-A commitment to fully integrate the Keating Lands into the revised East Harbour master plan and to acquire the lands to support important benefits, including an increase in affordable housing and expanding the Community Recreation Centre.