Item - 2026.EX32.3

The Deputy City Manager, Development and Growth recommends that:

1. City Council endorse development of a new Toronto Public Library neighbourhood branch in the Quayside community hub and direct City staff to coordinate and advance the design and fit out of the library at the site, in coordination with Toronto Public Library, Waterfront Toronto, Housing Development Office, Corporate Real Estate Management, Development Review, and Waterfront Secretariat.

2. City Council direct that Section 37 community benefits obtained in the development at 31 Parliament Street in the amount of $4,000,000 (Source Account: XR3026-3701366), be committed to support the future fit-out of the Toronto Public Library branch in the Quayside community, subject to the necessary requirements being met for issuance of a building permit for Phase 1 Block 1C2 and 1C3 that includes the Toronto Public Library - Quayside Community.

3. City Council authorize the Director, Community Planning, Toronto and East York South District, in consultation with the Director, Waterfront Secretariat, to provide capital funding in the amount of $2,500,000 to the owner or a related corporation to allow for the construction, in part, of the base building condition of the Toronto Public Library - Quayside Community as part of the Quayside Development Project with $500,000 being directed from Section 37 community benefits obtained in the development at 31 Parliament Street (Source Account: XR3026-3701366); and $2,000,000 being directed from Section 37 community benefits obtained in the development at 141 Bay Street, Block 1 and the portion of the lands between Bay and Yonge Streets (Source Account: XR3026-3701201).

4. City Council direct that the funds referred to in Recommendation 3 be forwarded to the owner or a related corporation upon execution of an Amending Section 37 Agreement or other agreement, to the satisfaction of the City Solicitor, that governs the use of the funds and the financial reporting requirements; and no earlier than after issuance of the first above-grade building permit for Phase 1 Block 1C2 and Block 1C3.

5. City Council authorize the Executive Director, Corporate Real Estate Management or designate, in consultation with the Executive Director, Housing Development Office, to negotiate and enter into with the owner of Quayside Phase 1 Block 1A such crane swing agreements and related or ancillary agreements and any amendments thereto as may be required to facilitate development of the City’s lands and/or Quayside Phase 1 Block 1A on terms satisfactory to the Executive Director, Corporate Real Estate Management, in consultation with the Executive Director, Housing Development Office, and in a form acceptable to the City Solicitor, and each of the Executive Director, Corporate Real Estate Management and the Executive Director, Housing Development Office or their designate(s) be authorized severally to execute such agreements on behalf of the City.

6. City Council authorize the Executive Director, Corporate Real Estate Management or designate, in consultation with the Executive Director, Housing Development Office, to negotiate and enter into with the owner(s) and/or tenants of Phase 1 Blocks 1B, 1C and 2 any conveyances, easements, leases, licences and other agreements (whether in the City’s capacity as transferee, transferor, lessee, lessor, licensee, licensor or otherwise, as the case may be) including without limitation tieback agreements, encroachment agreements, crane swing licences and construction staging licences, and any amendments thereto, that may be required in connection with the development of any lands within Blocks 1B, 1C and 2 or any part(s) thereof, on terms satisfactory to the Executive Director, Corporate Real Estate Management, in consultation with the Executive Director, Housing Development Office, and in a form acceptable to the City Solicitor, and each of the Executive Director, Corporate Real Estate Management and the Executive Director, Housing Development Office or designate(s) be authorized severally to execute such agreements on behalf of the City. 

7. City Council authorize the Executive Director, Corporate Real Estate Management or designate, in consultation with the Executive Director, Housing Development Office, Waterfront Secretariat and, where applicable, the Toronto Public Library, to negotiate and enter into with the owner(s) and/or tenants of Quayside Phase 1 Block 1B, 1C, and 2 or any part(s) thereof, such conveyances, easements, leases, licences and other agreements and any amendments thereto (whether in the City’s capacity as transferee, transferor, lessee, lessor, licensee, licensor or otherwise, as the case may be) as may be required for the construction and conveyance to the City of the proposed Toronto Public Library neighbourhood branch within the Quayside Phase 1 development, including without limitation tieback agreements, encroachment agreements, crane swing licences and construction staging licences, on terms satisfactory to the Executive Director, Corporate Real Estate Management, and in a form acceptable to the City Solicitor, and each of the Executive Director, Corporate Real Estate Management and the Executive Director, Housing Development Office or their designate(s) be authorized severally to execute such agreements on behalf of the City.

8. City Council, in accordance with Section 71-11.1C of the City of Toronto Municipal Code Chapter 71 (Financial Control), authorize the City Solicitor to amend the retainer with Borden Ladner Gervais LLP on Purchase Order Number 6057271 by increasing the value by $375,000 excluding all applicable taxes and charges ($381,600 net of HST recoveries), from $750,000 excluding all applicable taxes and charges ($763,200 net of HST recoveries) to $1,125,000 excluding all applicable taxes and charges ($1,144,800 net of HST recoveries).

The purpose of this report is to obtain various Council authorities to advance the first phase of the Quayside development in the waterfront, and to facilitate the delivery of a Toronto Public Library (“TPL”) branch in the central waterfront.

Quayside will be a master-planned, mixed-use complete community that builds on development in the adjacent East Bayfront lands and the emerging Keating Channel West Precinct. This 4.9-hectare area on Toronto’s waterfront, located at Queens Quay East and Parliament Street (“Quayside Lands”), will include new homes, parks and public spaces, community spaces and new and improved infrastructure, roads, and public realm.

Waterfront Toronto is leading the delivery of Quayside, in partnership with the City of Toronto Housing Development Office, Housing Secretariat, and Waterfront Secretariat. Waterfront Toronto’s development partners, Dream Unlimited (“Dream”) and Great Gulf Group (“Great Gulf”), are responsible for the delivery of purpose-built rental and condominium units, respectively, on Quayside development blocks.

The City, Waterfront Toronto, and Dream have worked on an accelerated plan to maximize the number of affordable and purpose-built rental homes that can be delivered in the first phase of development at Quayside, prioritizing the delivery of affordable and purpose-built rental homes on an expedited basis.

Along with the accelerated plan for affordable and purpose-built rental housing, the community hub space in the Quayside development presents an opportunity to house a new, approximately 1,850 square metre (20,000 square foot) TPL branch. With the accelerated delivery of affordable and purpose-built rental housing at Quayside, a library can be delivered with reduced timing. Further, it would enable the entire Phase 1 Block 1C development block to come into public ownership once the library facility is transferred to the City. This new branch has been approved by the Toronto Public Library Board (“TPLB”). The Toronto and East York Community Council (“TEYCC”) considered zoning and Section 37 amendments to enable the library facility in the first phase of Quayside development at a statutory public meeting on May 28, 2026 through item 2026.TE33.2 (the “TEYCC Report”). The recommendations in this report, together with the recommendations in the TEYCC Report, would enable the delivery of a new TPL branch and leverage developer construction obligations and Section 37 funds. The delivery of the TPL branch as the required community hub use in the Quayside development requires Council adoption of the recommendations in this report and the TEYCC Report, both of which are anticipated to be considered at the June 24, 2026 meeting of City Council.

The recommendations in this report provide the approvals required to secure a location in the Quayside development for a new, approximately 1,850 square metre TPL branch. Through amendments to the Development Agreement between Dream and Waterfront Toronto and through an amending Section 37 Agreement, the site developer will convey to the City the base building, land, and required easements for the library as part of the Quayside development. The City will provide capital funding of $2.5 million, fully funded by Section 37 community benefits from 31 Parliament Street and 141 Bay Street developments to support construction of the base building condition for the new library branch. Consideration for the reciprocal crane swing agreements can be satisfied through the mutual exchange of real estate interests, with no cash consideration required.

TPL will be responsible for the fit-out of the library space, and for the ongoing operations of the branch. The estimated cost to complete the fit-out is $13.0 million, with work expected to commence in 2029, or upon conveyance. Funding has been identified as follows:

- $4.0 million reallocation within TPL’s 10-Year Capital Plan, with no impact to planned State of Good Repair (“SOGR”) projects.

- $4.0 million in Section 37 community benefits received through the development at 31 Parliament Street agreement, to be added to the TPL’s 10-Year Capital Plan.

- $5.0 million donations to be received from the TPL Foundation in support of the fit-out of the new Quayside branch, to be added to the TPL’s 10-Year Capital Plan. TPL has worked with the TPL Foundation to seek and secure philanthropic contributions to support the fit-out of a new branch in the Quayside development. 

The creation of a new capital project, along with the associated project cost and funding for the fit-out of the TPL branch within the Quayside development will be brought forward for consideration through the 2027 budget process. This will allow sufficient time for TPL to complete the necessary due diligence to validate project cash flow timing. The creation of the project is subject to confirmation that the $13.0 million in funding required to complete the fit-out, as identified above, has been secured.

Operating budget impacts resulting from the addition of a new neighbourhood branch are estimated to be $1.5 million to $2.0 million annually. These financial impacts are not expected to commence until at least 2031, following completion of the fit-out work and as TPL plans to open the branch to the public. TPL will continue to monitor and refine this estimate and will bring forward the associated operating impacts for consideration through future budget processes.

The total value of amendment with the Borden Ladner Gervais LLP retainer on Purchase Order Number 6057271 is $375,000 excluding all applicable taxes and charges ($381,600 net of HST recoveries). This will increase the current purchase order from $750,000 excluding all applicable taxes and charges ($763,200 net of HST recoveries) to $1,125,000 excluding all applicable taxes and charges ($1,144,800 net of HST recoveries), for additional legal support related to the Quayside Development Project. Funding in the amount of $381,600 net of HST recoveries for this contract amendment is included in the 2026-2035 Capital Budget and Plan for the Housing Secretariat and the Housing Development Office under the capital project CAF003-03.

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