Item - 2025.GG23.24

The General Government Committee:  

1. Received the report (June 2, 2025) from the Executive Director, Corporate Real Estate Management for information.

As directed by City Council (MM24.16), the purpose of this report is to provide an update on discussions regarding the feasibility of the City entering into a long-term nominal lease agreement (the "Prospective Lease") with Toronto Fire Fighters Charities Inc. (the "Prospective Tenant") for the City-owned property at 641 Eglinton Avenue West (the "Property"). The Proposed Lease would support the "Home Away Program" (the "Program") for burn victims receiving treatment at Sunnybrook Hospital or the Hospital for Sick Children.

The Property, former Toronto Fire Services' Fire Hall 135, was most recently utilized by Metrolinx during the construction of the Eglinton Crosstown Light Rail Transit. A preliminary review has identified limited potential for the Property to support City objectives such as housing or other program needs.

City staff evaluated the feasibility and financial implications of adaptively reusing the Property to accommodate the Program and ultimately inform the viability of entering in a Prospective Lease. The feasibility study concludes that establishing the Program at the Property (the "Project") is achievable and can largely be accommodated within the existing structure, subject to careful design and funding. Given the age and vacant status of the Property, the extent of deterioration introduces significant risks, and early-stage hazardous materials and structural assessments are critical to inform design and cost certainty. Addressing these risks is essential to ensure the safety, compliance, and long-term viability of the Project.

Staff have determined a preliminary estimate of the total capital cost for the Project is approximately $12 million. This includes an allocation of $8 million for base building rehabilitation and $4 million for programmatic interior development.

The City's capital budget includes $2 million to support immediate stabilization of the building, mitigate building failure and address urgent health and safety issues. This work is scheduled for design in 2025 and implementation in 2026. This is distinct from the approximately $12 million of unfunded capital work required to improve and fit-out the Property to be able to accommodate the Program.

City staff have had ongoing preliminary discussions with the Prospective Tenant, who has demonstrated interest and willingness to secure funding to support the additional work required to fit-out the Property. City staff are committed to continue productive discussions on the Prospective Lease, including progress on the Prospective Tenant's funding / fundraising efforts, for which, at this point in time, no additional requests for the City's support have been made. Entering into the Prospective Lease for the Property requires City Council approval, and staff will seek authority from City Council as required.

There is no financial impact resulting from the adoption of the recommendation in this report.

However, staff have determined that preliminary estimates of the total capital cost for establishing the Program at the Property (the "Project") are approximately $12 million as detailed in Table 1 below. This includes an allocation of $8 million for base building rehabilitation, which encompasses structural and envelope restoration, environmental remediation for hazardous materials such as asbestos and mold, the installation of new heating, ventilation, and air conditioning, plumbing, and electrical systems, as well as heritage-sensitive finishes and upgrades to ensure accessibility compliance. An additional $4 million is estimated for programmatic interior development, which will cover the construction of interior partitions and finishes, procurement of fixtures, furniture, and equipment, and the implementation of information technology infrastructure, security systems, and signage. The estimated capital cost is intended as a preliminary estimate to inform early-stage planning and would require further refinement through any subsequent detailed design and procurement processes.

Table 1: Estimated Project Capital Costs

The City's capital budget includes $2 million to support immediate stabilization of the building, mitigate building failure and address urgent health and safety issues. This work is scheduled for design in 2025 and implementation in 2026 and includes roof replacement, localized repairs to windows, doors, and masonry, and the remediation of designated substances, as required. This is distinct from the approximately $12 million of unfunded capital work required to improve and fit-out the Property to be able to accommodate the Program.

City staff have had ongoing preliminary discussions with the Prospective Tenant, who has demonstrated interest and willingness to secure funding to support the additional work required to fit-out the Property. City staff are committed to continue productive discussions on the Prospective Lease, including progress on the Prospective Tenant's funding / fundraising efforts, for which, at this point in time, no additional requests for the City's support have been made.

The estimated total opportunity cost of the Prospective Lease over a 50-year (less one day) term is $4,462,000.

The Chief Financial Officer and Treasurer has reviewed this report and agrees with the information as presented in the Financial Impact Section.