Item - 2025.EP16.4

The Board of Governors of Exhibition Place:

1. Subject to obtaining the necessary authorization from City, consented to the change in effective control of the Phase 1 Tenant resulting from the Proposed Transaction on the terms and conditions contained in Confidential Attachment 1 to the report (April 10, 2025) from the Chief Executive Officer, Exhibition Place, and such other terms and conditions as may be satisfactory to the Chief Executive Officer and the City's approving authority, and in a form satisfactory to the City Solicitor.

2. Subject to obtaining the necessary authorization from City, consented to the Phase 1 Lease amendments on the terms and conditions contained in Confidential Attachment 1 to the report (April 10, 2025) from the Chief Executive Officer, Exhibition Place, and such other and amended terms and conditions as may be satisfactory to the Chief Executive Officer and the City's approving authority, and in a form satisfactory to the City Solicitor.

3. Directed the Chief Executive Officer to work with City Real Estate Management Services to seek the necessary City of Toronto approval for the Proposed Transaction and Phase 1 Lease amendments set out in Recommendations 1 and 2.

4. Directed that the information contained in Confidential Attachment 1 to the report (April 10, 2025) from the Chief Executive Officer, Exhibition Place, remain confidential in its entirety, as it contains financial information that belongs to the Board and has monetary value or potential monetary value.

Following the completion of a successful Request for Proposal process held in 2007, the City of Toronto and The Board of Governors of Exhibition Place (the "Board"), collectively as Landlord, executed a lease for a 49-year term, with two options to renew, each for a 25-year term (the "Phase 1 Lease"), with Princes Gates Hotel Limited Partnership (the "Phase 1 Tenant") for the development and operation of a new hotel on the Exhibition Place grounds. The first phase of the hotel, located at 111 Princes' Boulevard and known as "Hotel X", opened for operations on March 20, 2018.

By letter dated January 15, 2025, the Phase 1 Tenant formally advised the Board and the City, as Landlord, of a pending sale of the interest of Henry Kallan, his affiliates and related parties in the Hotel X property to the party set out in in Confidential Attachment 1 (the "Proposed Transaction"), and to request consent in respect thereof from the Landlord as required pursuant to Section 14 of the Phase 1 Lease. The letter also requested consent for a future transfer of hotel management and certain amendments to the Phase 1 Lease, both in connection with the Proposed Transaction. It is expected that the Proposed Transaction will close on or about June 2025.

Staff from the City Real Estate Management and Exhibition Place have been working with the Phase 1 Tenant with respect to the requested consent. In order to facilitate the Landlord’s due diligence review process, we requested and obtained from the Tenant more detailed information about the Proposed Transaction, the future transfer of hotel management and amendments to the Phase 1 Lease.

Confidential Attachment 1 to this report outline the Proposed Transaction, the proposed management transfer, and Phase 1 Lease amendments.

This report recommends that the Board approve the change in effective control of the Phase 1 Tenant resulting from the Proposed Transaction, and the related amendments to the Phase 1 Lease, subject to the necessary City of Toronto authorization.