Item - 2024.EX18.4

The Executive Committee recommends that:

1. City Council approve the preferred development proponent identified in Confidential Attachment 3 (the “Preferred Proponent”) and the key terms as set out in Confidential Attachment 4 (the “Key Terms”) to the report (October 15, 2024) from the Chief Executive Officer, CreateTO for the redevelopment of 610 Bay Street and 130 Elizabeth Street.

2. City Council authorize the Board of Directors, CreateTO to direct the Chief Executive Officer, CreateTO, in consultation with the Executive Director, Housing Secretariat and the Executive Director, Corporate Real Estate Management, to negotiate transaction agreements, including one or more ground leases, one or more municipal housing facility agreements ("Contribution Agreements"), and such other documents as may be necessary to finalize the arrangements with the Preferred Proponent (the "Agreements"), substantially on the terms identified in Confidential Attachment 4 to the report (October 15, 2024) from the Chief Executive Officer, CreateTO and such other terms and conditions deemed appropriate by the Chief Executive Officer, CreateTO, the Executive Director, Housing Secretariat and the Executive Director, Corporate Real Estate Management.

3. City Council authorize the Executive Director, Corporate Real Estate Management, in consultation with the Chief Executive Officer, CreateTO and the Executive Director, Housing Secretariat, to execute, on behalf of the City, one or more ground leases and such other documents as may be necessary to finalize the arrangements with the Preferred Proponent, substantially on the major terms and conditions set out in Confidential Attachment 4 to the report (October 15, 2024) from the Chief Executive Officer, CreateTO, and such other terms as deemed appropriate by the Executive Director, Corporate Real Estate Management, in consultation with the Chief Executive Officer, CreateTO,  the Executive Director, Housing Secretariat, and in a form satisfactory to the City Solicitor.

4.  City Council authorize the Executive Director, Housing Secretariat, in consultation with the Chief Executive Officer, CreateTO and the Executive Director, Corporate Real Estate Management, to execute, on behalf of the City, one or more Municipal Housing Facility Agreement(s) ("Contribution Agreement(s)") and such other documents as may be necessary to finalize the arrangements with the Preferred Proponent, substantially on the major terms and conditions set out in Confidential Attachment 4 to the report (October 15, 2024) from the Chief Executive Officer, CreateTO, and such other terms as deemed appropriate by the Executive Director, Housing Secretariat, in consultation with the Chief Executive Officer, CreateTO,  the Executive Director, Corporate Real Estate Management, and in a form satisfactory to the City Solicitor.

5. Subject to City Council adoption of Recommendations 1, 2, 3, and 4 above, City Council direct the Deputy City Manager, Corporate Services and the Chief Financial Officer and Treasurer to direct the revenue generated by the redevelopment of the Properties in the amount identified in Confidential Attachment 1 to the supplementary report (October 30, 2024) from the Deputy City Manager, Corporate Services and the Deputy City Manager, Development and Growth Services to the Land Acquisition Reserve Fund (XR1012).

6. Subject to City Council adoption of Recommendations 1, 2, 3, and 4 above, City Council:

a. authorize the affordable rental housing units to be constructed on the Properties to be eligible, under the City's Rental Housing Supply Program, for waivers of fees for planning applications, building permits, and exemptions from parkland dedication, community benefit charges and development charges, unless already paid or exempted by provincial legislation; and

b. authorize an exemption from taxation for municipal and school purposes for the duration of the term for the affordable rental housing units to be developed on the Properties.

7. City Council authorize City staff to cancel or refund any taxes paid after the effective date of the exemption from taxation for municipal and school purposes as set out in the municipal housing facility agreement (the "Contribution Agreement").

8. City Council authorize the Executive Director, Housing Secretariat to execute, on behalf of the City, any security or financing documents required by the proponent to secure construction and conventional financing and subsequent refinancing, including any postponement, tripartite, confirmation of status, discharge or consent documents where and when required during the term of the Contribution 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.

9. City Council direct that Confidential Attachments 1, 2, 3 and 4 to the report (October 15, 2024) from the Chief Executive Officer, CreateTO remain confidential as they relate to a proposed or pending disposition of property by the City and a plan to be applied to negotiations carried on or to be carried on by or on behalf of the Board of Directors of CreateTO and the City.

10. City Council authorize the public release of the name of the Preferred Proponent at the discretion of the Chief Executive Officer, CreateTO, in consultation with the Executive Director, Corporate Real Estate Management and the Executive Director, Housing Secretariat.

11. City Council direct that the information in Confidential Attachment 1 to the supplementary report (October 30, 2024) from the Deputy City Manager, Corporate Services and the Deputy City Manager, Development and Growth Services remain confidential at this time as it relates to a proposed or pending disposition of properties by the City and a plan to be applied to negotiations carried on or to be carried on by or on behalf of the Board of Directors of CreateTO and the City.

12. City Council authorize the public release of Confidential Attachment 1 to the supplementary report (October 30, 2024) from the Deputy City Manager, Corporate Services and the Deputy City Manager, Development and Growth Services at the discretion of the Deputy City Manager, Corporate Services and the Deputy City Manager, Development and Growth Services.

At its meeting on October 29, 2024, the Board of Directors of CreateTO considered Item RA14.1 and made recommendations to City Council.

Summary from the report (October 15, 2024) from the Chief Executive Officer, CreateTO:

The purpose of this report is to provide an update on the CreateTO led Request for Proposal (“RFP”) and proponent selection for the redevelopment of 610 Bay Street and 130 Elizabeth Street that prioritizes: the delivery of affordable housing; a Paramedics Multi-Hub; delivery of commercial space targeted to the Medical Sciences sector; and adaptive reuse of a significant heritage building.

On November 24, 2022, under the scrutiny of a Fairness Monitor, CreateTO in conjunction with City stakeholders, issued a Request for Expressions of Interest (“REOI”) to the development and not-for-profit communities as Stage One of a Two-Stage Market Offering Process. Bids were received on February 9, 2023. Under the direction of a Fairness Monitor, the REOI submissions were reviewed, scored, and shortlisted. On June 14, 2023, City Council through Item 2023.GG4.26 approved a shortlist of proponents (the “Shortlisted Proponents”). On September 8, 2023, an RFP was issued to the Shortlisted Proponents. Bids were received on December 8, 2023.

On January 26, 2024, a Minister’s Zoning Order (“MZO”) was issued for a new protected air ambulance flight path for St. Michael’s Hospital and the Hospital for Sick Children, limiting the maximum developable height at 610 Bay Street. Meetings were convened with the Fairness Monitor to address the impacts of the MZO and a revised financial package based on a long-term land lease to reflect a change in City priorities concerning land sales. Following discussions with the Fairness Monitor, an Addendum to the RFP, supported with supplementary reports, and documents were prepared and reviewed by the Fairness Monitor. The Fairness Monitor confirmed there were no fairness concerns with the proposed Addendum.

On April 4, 2024, an Addendum to the RFP, and supplementary reports, documents and directions was released requesting proponents revise their proposals to address the impacts of the MZO and a revised financial package based on a long-term land lease.

Revised bids were received May 13, 2024. Bids were reviewed, evaluated, and scored, resulting in the selection of a preferred development proponent for the mixed-use, mixed-income development at 610 Bay Street and 130 Elizabeth Street.

This supplemental report is intended to accompany the transmittal of the decision of the CreateTO Board Item RA14.1 - "ModernTO: Selection of Proponent for 610 Bay Street and 130 Elizabeth Street"  (October 15, 2024) from the Chief Executive Officer, CreateTO on the redevelopment of 610 Bay Street and 130 Elizabeth Street (the "Properties") and includes confidential financial recommendations as well as recommendations to provide financial incentives for the affordable rental housing secured as part of the redevelopment, as communicated to all proponents as part of the market offering process.

The Properties are one of eight high-value City-owned sites selected through the ModernTO program for city-building purposes. ModernTO is designed to modernize the City’s office portfolio, reduce the City’s office footprint, and free up underutilized properties for city-building opportunities.

Subject to City Council approval, CreateTO staff will work with the Executive Director, Housing Secretariat, Executive Director, Corporate Real Estate Management and the City Solicitor to negotiate and execute the transactions described.