Item - 2024.GG14.20

The Executive Director, Corporate Real Estate Management recommends that:  

1. City Council authorize the Executive Director, Corporate Real Estate Management to accept the agreement of purchase and sale / Offer to Purchase from Metrolinx on behalf of the City, for the sale of the property municipally known as 120 Grangeway Avenue (the "Property") to Metrolinx, and convey a temporary easement over portions of the Property (collectively, the "Transaction"), and subject to any reservation specified in Attachment 1 of this report, and substantially on the major terms and conditions set out in Attachment 2 of this report.

2. City Council authorize a portion of the proceeds of closing be directed to pay the City’s outstanding expenses related to the said portions of the Property and the completion of the Transaction.

3. City Council authorize the City Solicitor to complete the Transaction on behalf of the City, including making payment of any necessary expenses and amending the closing and other dates to such earlier or later date(s) and on such terms and conditions as they may from time to time consider reasonable; and the appropriate City officials be authorized to take the necessary action to give effect thereto.

The purpose of this report is to obtain Council authority to sell a fee simple portion of the City-owned property municipally known as 120 Grangeway Avenue (the "Property") and to convey a temporary easement over other portion(s) of the Property to Metrolinx. Metrolinx requires the portions of the Property to facilitate the construction of the new Toronto Transit Commission's Scarborough Centre Subway Station, as part of the Scarborough Subway Extension Project. The Scarborough Subway Extension Project Project is being delivered by Metrolinx, on behalf of the Province.

The City will receive revenue in the amount of $40,712,886 for the fee simple property requirements associated with the Property. This amount is exclusive of Harmonized Sales Tax and other applicable taxes, less closing costs, and usual adjustments. The sale proceeds will be contributed to the Land Acquisition Reserve Fund (XR1012) upon closing of the Transaction.

The City will also receive revenue in the amount of $4,061,436 for the initial six-year term of the temporary easement. Should Metrolinx exercise its option to extend the term of the temporary easement, the City will receive additional funds based on the annual increase in the Consumer Price Index (CPI) as contemplated in the Real Estate Protocol agreed to by both the City and Metrolinx. These proceeds are exclusive of Harmonized Sales Tax and other applicable taxes. These funds will be directed to the 2024 Operating Budget for Corporate Real Estate Management under cost centre FA1495 and functional area code 3220200000.

The Chief Financial Officer and Treasurer has reviewed this report and agrees with the financial implications as identified in the Financial Impact section.