Purpose:

To seek authority to grant to the owner(s) of Fairview Mall a Right of First Refusal with respect to certain City-owned land in the immediate vicinity of the shopping centre for the future right to acquire same at such future time as same may become surplus to City needs.

Funding Sources, Financial Implications and Impact Statement:

There are no immediate financial implications associated with this report.

Recommendations:

It is recommended that:

(1) authorization be provided to grant to the owners of Fairview Mall a Right of First Refusal on the criteria set out herein and in a form satisfactory to the City Solicitor; and

(2) the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.

Council Reference/Background/History:

By its adoption of Clause No. 2 of Report No. 25 of The Corporate Administration Committee (as amended) on December 10 and 18, 1997, the Council of the former Municipality of Metropolitan Toronto approved a transaction concerning the land acquisition and construction of the Don Mills Subway Station as part of the Sheppard Subway Project, in the immediate proximity of, and to some extent, integrated with, the Fairview Mall shopping centre.

Comments and/or Discussion and/or Justification:

Subsequently, negotiations have been conducted with the owners of Fairview Mall, as a result of which the overall Master Agreement has recently been executed to enable the necessary demolition work at the site to get underway. That Agreement anticipated the preparation and execution of a myriad of permanent contracts and property documents, all to be finalized by the end of February, 1998. In the course of delineating the necessary or desirable Afinal@ documents, it was realized that the provision of a Right of First Refusal to the owners of Fairview Mall had not been provided for in the initial Council authority. In a situation such as the Don Mills Station where various of the transit facilities and municipal property interests are, in essence, intermingled with those of a private owner, it is most reasonable and practical to provide to that owner the first entitlement to acquire the municipal property if and when same is declared surplus at some future point in time.

Accordingly, the owners of Fairview Mall have requested future rights to acquire the property adjacent to the Mall, and it is recommended that such entitlement be granted on the following terms and conditions:

(1) the Right of First Refusal will not apply until such time as the Council for the City of Toronto, or its successor, declares the lands in question to be surplus to municipal requirements;

(2) the process by which Council may, in the future, declare the lands surplus to its requirements will be subject to then-existing statutes, by-laws and municipal policies;

(3) the purchase price applicable to any future sale is to be based upon an appraisal (i.e., rather than a process whereby the owner(s) of Fairview Mall would be offered an opportunity to match a third party offer to purchase); and

(4) any future appraisal is to be premised, as a term of reference, on the basis that the stipulated value shall be that which is the greater of the land=s then fair market value or, the land=s then value-in-contribution to the purchaser=s property.

Conclusions:

The provision of a Right of First Refusal premised on the foregoing criteria is fair and reasonable and would not prejudice or adversely affect either the future value of the lands in question or the interests of the City of Toronto.

This matter is being brought forward to the Corporate Services Committee by way of supplementary agenda because this report could not be finalized prior to the scheduled agenda closing deadline. The issue is, however, one that requires the approval of your Committee and Council in order for the Right of First Refusal to be incorporated into the final documentation by the end of February.

Contact Name:

Doug Warning, Tel: 392-8165.