Item - 2024.RA9.3

The Board of Directors of CreateTO:

1. Endorsed the key terms of the transaction outlined in Confidential Attachment 1 to the report (February 2, 2024) from the Chief Executive Officer, CreateTO and directed the Chief Executive Officer, CreateTO to work with the Deputy City Manager, Corporate Services, and the Executive Director, Housing Secretariat, to advance the key terms in Confidential Attachment 1 to the report (February 2, 2024) from the Chief Executive Officer, CreateTO to City Council for consideration.

2. Provided City Council approves the key terms of the proposed transaction, directed the Chief Executive Officer, CreateTO to work with the applicable City of Toronto officials to negotiate and finalize the necessary agreements and such other documents as may be required in order to finalize the arrangement with the Developer for 267 and 275 Merton Street.

3. Directed that Confidential Attachment 1, Confidential Attachment 2 and Confidential Attachment 3 to the report (February 2, 2024) from the Chief Executive Officer, CreateTO remain confidential in their entirety, as they deal with a proposed or pending acquisition or disposition of land by the City of Toronto.

The Board of Directors of CreateTO recessed its public session to meet in closed session to consider the item as it pertains a proposed or pending acquisition or sale of land by the City of Toronto.

The purpose of this report is to inform the Board of Directors of CreateTO of the ongoing discussion between CreateTO staff and the developer proponent named in Confidential Attachment 1 (the "Developer") on the opportunity to leverage the City-owned lands at 275 Merton Street to create new purpose-built rental homes, including a minimum target of 30 percent affordable rental units.

The 275 Merton Street site is a City-owned property that is currently used by Toronto Water for office space and vehicle parking. The adjacent property, 267 Merton Street, was recently acquired by the Developer. In September 2023, the Developer approached the City and CreateTO with a proposal to assemble and jointly redevelop the two properties located at 267 and 275 Merton Street (see Attachment 1) as a purpose-built rental project with a mix of affordable and rent-controlled market units. The Developer also committed to financially supporting the off-site relocation of the existing Toronto Water program. CreateTO staff have conducted due diligence on this proposal and the development potential of this site. This included highest and best use massing analysis, land valuation, and consultation with Toronto Water, the Housing Secretariat, City Planning, and Parks, Forestry and Recreation staff, as well as the local Councillor and the Mayor's Office. Based on the findings of this outreach and due diligence, staff worked with the Developer to revise and enhance their proposal. Confidential Attachment 1 to this report provides an overview of the key terms that have been negotiated to date. Confidential Attachment 2 to this report outlines the financial business case for an agreement, as proposed.

This report outlines the opportunity to leverage 275 Merton Street in a way that would deliver a substantial number of new affordable and rent-controlled market units in support of the Mayor's Housing Action Plan to deliver 65,000 new rent-controlled units and leverage underutilized City-owned property to create new affordable housing. This report recommends that staff work with Corporate Real Estate Management to recommend the key terms of this proposal, as outlined in Confidential Attachment 1, to City Council through the General Government Committee in March 2024.