The purpose of this report is to advise the Executive Committee of the Divisional Court decision, dated July 19, 2010, in respect of various resolutions of Council for the payment of legal expenses for compliance audits and defamation actions and to submit a communication from external counsel seeking instructions as to further steps in the matter.

At the time of this report, financial impacts were unavailable from outside counsel.

The purpose of this report is to obtain Council authority to resolve certain contractual issues between the City and Enwave Energy Corporation ("Enwave") including matters related to the Deep Lake Water Cooling Project (the"DLWC Project") and the Energy Transfer Agreement dated January 18, 2002 between the City and Enwave, as amended (the "ETA").  For this purpose, Council authority is sought to: (a) enter into a second Amending Agreement to the ETA with Enwave (b) provide a Consent and Acknowledgement to Integrated Private Debt Corp., or its affiliate ("IPDC"), regarding Enwave's proposed assignment of its interest in the ETA to IPDC, as collateral security for a new credit facility being negotiated between Enwave and IPDC; and, (c) enter into a Municipal Access Agreement with Enwave, all in accordance with the confidential terms and conditions contained in Confidential Attachment 1 of this report.

The confidential financial impacts are discussed in Confidential Attachment 1 of this report.

The Deputy City Manager and Chief Financial Officer has reviewed this report and agrees with the financial impact information.

This report responds to Council's July 2010 request for a report to clarify in-year spending and reporting approval protocols for the Toronto Transit Commission (TTC).  In developing this protocol, staff also considered Council's request for the TTC to comply with the City's budget submission requirements as outlined in Recommendation 98 of the April 15, 2010 budget approval report.

Historically the TTC had been able to rely almost entirely on fares to fund its operating costs, or on stable subsidies from the City and the Province. In the absence of a stable provincial operating subsidy, the TTC has become dependent on the City to maintain required service levels.  Given the extent and growth of the City's funding over time, it is appropriate now to establish a more integrated relationship with the City's financial planning and management framework. 

This report clarifies the City's authority respecting the TTC's budgetary and financial management policies and processes and sets out the protocol for TTC budget approvals and in-year budget adjustments reflecting current City financial and budget policy and procedures.  Legislation permits the City to prescribe by by-law the budget submission process and determine what City approvals the TTC must seek in managing its spending throughout the year and in dealing with year-end surpluses and shortfalls. 

Given the significant size and scope of the TTC Capital and Operating budgets and to ensure consistency with Council budgetary policy and procedures, this report recommends that Council approve this direction to the TTC.  City and TTC staff will then work together to implement the Council directions related to the Corporate budgetary process and protocols as part of the 2011 budget process.

Approval of these recommendations will have no direct financial impact.  However, given that TTC capital budget reflects about one half of the tax supported capital budget and is the largest operating budget for the City, it is necessary to ensure consistent budgetary accountability for all City funded programs.

These recommendations will enable the City to improve its due diligence review of TTC budget submissions and will provide sufficient time to review, assess and make recommendations on the TTC 10-year capital plan and operating budget submissions. 

The recommended in-year financial management and approval process and protocols will provide the TTC with a clear understanding of its financial accountabilities to the City in relation to the City’s financial management, control and reporting practices, enabling the City to better assess the financial impacts of any potential in-year budgetary changes within its fiscal affordability and financial accountability frameworks.

The General Manager, Shelter, Support and Housing Administration, recommends that the Shelter, Support and Housing Administration 2010 Approved Operating Budget be increased by $30,672,243 gross and $0 net to reflect 100 percent Provincial and Federal funding under the Renewable Energy Initiative component of the Social Housing Renovation and Retrofit Program.

This report requests budget adjustments of $30,672,243 gross and $0 net to the Shelter, Support and Housing Administration’s 2010 Approved Operating Budget to reflect the additional revenues from the Provincial and Federal Governments under the Renewable Energy Initiative (REI) component of the Social Housing Renovation and Retrofit Program.

On August 9, 2010, provincial officials confirmed that a conditional allocation of $30,672,243 will be awarded to the City of Toronto under the REI.  This amount is based on the Province’s assessment of projects submitted by the City under the REI and takes into account regional fairness across Ontario, a balance of technologies and compliance with program requirements, including procurement of technologies from the list of provincially approved vendors.

The Emery Village Business Improvement Area (BIA) proposes the development of North America’s tallest flagpole (125 metres) and a public square on a 4.678 acre parcel of land situated at the southeast corner of Arrow Road and Finch Avenue West, west of Highway 400 (known as 1111 Arrow Road).  The project is intended to create a landmark tourist destination that promotes Canada and also serves as an attraction and focal point for local community and business activities.  This report seeks approval of the project concept from City Council and authorization for City staff to enter into negotiations to purchase the site conditional upon concluding financing agreements with the BIA and determination of the appropriate operating model.  The City will recover any costs for the purchase and development of the site through a financial agreement with the BIA.  The BIA proposes to generate project funding though the annual BIA levy, the potential use of signage and parking revenues, and possible Section 37 contributions. Project maintenance and programming costs would be covered through similar revenue sources, with the BIA taking responsibility for any shortfalls.

The first phase of project implementation, consisting of the flagpole and surrounding square, will cost approximately $3.5 million plus the value of the land.   There is no budget, or funding source currently in place for this land acquisition. The proposed project structure is that all costs undertaken by the City, for acquisition, development and operation phases of the project, are to be recovered from the Emery Village BIA, which intends to pursue various sources of potential revenue, including that from advertising signage and parking.  For the project to proceed an agreement must be executed by the City and the BIA under which the BIA takes financial responsibility through its levy for all costs in excess of those generated by other revenue sources. 

The financial terms for recovery by the City of the initial outlay to purchase property and develop the square would be determined through negotiation with the BIA.  The following provides a financial context for the recommendations in this report. The 2010 Operating Budget for the Emery Village BIA totalled $1,974,967 supported by a levy of $1,767,335.   While considering a plan to develop the site through leasing the property, the BIA agreed in principle to raise $3.5 million over 2011 and 2012.   Under this scenario, using the BIA's existing area and total commercial/industrial assessment, the BIA's levy rate would approximately double, from 0.108% in 2010 to 0.221% (from $1,767,335 to $3,692,335) in 2011 and 2012.  As the amount to be raised under the recommended approach, including the purchase of the property, will be larger, the period required for the BIA to repay the City would likely be longer, with the terms of repayment being part of the agreement to be negotiated with the BIA. 

The Deputy City Manager and Chief Financial Officer has reviewed this report and agrees with the financial impact information.

The purpose of this report is to seek Council’s endorsement in principle of a preferred design option for a proposed four-pad ice facility in the Port Lands.  Based on a series of considerations including best fit with the vision of the Lower Don Lands Plan, enhanced economic benefits and community feedback, the preferred design is for a stacked facility named the “Stacked Option”.

Project costs significantly exceed the available funding.  For that reason, this report recommends consideration of the project in the 2011 Capital Budget process and that staff continue to refine costing estimates and identify funding options for the project.

There is no direct financial impact arising from the recommendations in this report.

The current estimated total cost for the proposed stacked facility is $88.0 million, exclusive of site servicing costs. Funding in the amount of $34.0 million is available for this project through the Waterfront Toronto Long-Term Funding Plan. Staff have estimated that the future net revenues from the operation of the proposed facility can potentially support a further $21.0 to $25.0 million in recoverable debt funding.  Staff have not yet identified a funding source for the remaining $29.0 to $33.0 million in required capital funding.

This report recommends that staff carry out a further assessment of the project costs and funding options and include consideration of the project as part of the 2011 Capital Budget process.

The Deputy City Manager and Chief Financial Officer has reviewed this report and agrees with the financial impact information.

The Deputy City Manager recommends that:

1.         City Council endorse the concept plan attached as Figure 1 to this report which generally illustrates Hines’ proposal for the development and subdivision of the Bayside Lands, which concept plan will be the subject of a subsequent plan of subdivision process.  For greater certainty, Council endorsement of the concept plan is in no way intended to and does not fetter the City’s planning and municipal rights and responsibilities.

2.         Council grant authority for the City, as owner of the Bayside Lands, to enter into a Land Development Agreement with Hines (LDA) that includes the disposition of the Bayside Lands  through agreements of purchase and sale (APSs), ground leases (GLs), rights of first offer (ROFOs), rights of first refusal (ROFRs) and may include ancillary agreements such as license, encroachment, easement, closing or other agreements contemplated under the LDA (collectively Ancillary Agreements), substantially on the terms and conditions set out in Attachment 1, together with such other terms and conditions as may be deemed appropriate by the Deputy City Manager whose responsibilities include Waterfront Revitalization, in consultation with the Chief Corporate Officer and in a form satisfactory to the City Solicitor, subject to Part 4 of this Report.

3.         Council require that prior to the City entering into the LDA:

a.         Council declare surplus the Bayside Lands with the intended manner of disposal by way of a LDA, and that all steps necessary to comply with the City's real estate disposal process, as set out in Chapter 213 of the City of Toronto Municipal Code be taken prior to the City entering into the LDA.

b.         WT and Hines having entered into the Project Agreement (PA) and WT shall have provided an undertaking to the City  that WT will circulate all amendments to the PA and associated agreements and all amendments to any Development Agreements (DA) made between WT and Hines or any development partner of Hines (Site Developer), to the City for input on all matters which materially affect the City’s interest as owner of the Bayside Lands.

c.         Receipt by the City of a written undertaking from WT to monitor the performance of Hines and any Site Developer under the LDA, any APS or GL or other transaction contemplated by the LDA, to take action to enforce such performance, and to perform on behalf of the City any City obligations under such agreements, that the Chief Corporate Officer may require WT to monitor, enforce or perform from time to time, all such WT actions to be taken at no cost to the City, and provided such obligations shall not extend past the winding down of WT at which time such obligations shall revert to the City.

d.         Receipt by the City of a legal opinion in respect of the corporate status, powers and authority of Hines to enter into and perform the obligations under the LDA and PA in form and content satisfactory to the City Solicitor.

e.         WT shall have provided confirmation that it has completed a satisfactory due diligence review of the financial capacity of Hines and its ability to complete its obligations under the LDA and PA to the satisfaction of the Deputy City Manager whose responsibilities include Waterfront Revitalization in consultation with the Chief Corporate Officer.

f.          Receipt by the City of a written undertaking from WT to pay for any realty taxes arising from the LDA or Ancillary Agreements in form and content satisfactory to the City Solicitor.

4.         Council grant authority for the City, as vendor of the City-owned Sites, currently anticipated to be the sites shown as  R1;  R2;  R3, R4 & W1;  R5;  and R6, R7 & W2 on Figure 1 (collectively the Sale Sites), to enter into APSs with Hines or a Site Developer, together with any Ancillary Agreement, substantially on the terms and conditions set out in Attachment 2, together with such other terms and conditions as may be deemed appropriate by the Deputy City Manager whose responsibilities include Waterfront Revitalization, in consultation with the Chief Corporate Officer and in a form satisfactory to the City Solicitor, subject to Part 7. of this Report.

5.         Council grant authority for the City, as lessor of the City-owned Sites currently anticipated to be the sites shown as C1 and C2 on Figure 1 (collectively the Lease Sites), to enter into GLs with Hines or a Site Developer, together with any Ancillary Agreement, substantially on the terms and conditions set out in Attachment 3, together with such other terms and conditions as may be deemed appropriate by the Deputy City Manager whose responsibilities include Waterfront Revitalization in consultation with the Chief Corporate Officer and in a form satisfactory to the City Solicitor, subject to Part 7. of this Report.

6.         Council grant authority for the City to give Hines a ROFO and ROFR to develop one or both of the two City-owned Sites shown as A1 and A2 (with W3 as part of either A1 or A2) on Figure 1 (collectively the Affordable Housing Sites) on condition that any proposal which Hines and WT wish to propose shall be subject to Council approval, together with such other terms and conditions as may be deemed appropriate by the Deputy City Manager whose responsibilities include Waterfront Revitalization in consultation with the Chief Corporate Officer and in a form satisfactory to the City Solicitor.

7.         Prior to the City entering into any APS, GL, the following matters be completed and provided for to the satisfaction of the Deputy City Manager whose responsibilities include Waterfront Revitalization, in consultation with the City Solicitor and other City officials as appropriate:

a.         Draft plan approval of a plan of subdivision of the Bayside Lands.

b.         WT and Hines or the Site Developer having entered into a DA in respect of the applicable Site substantially in the form attached to the PA.

c.         WT shall have provided an undertaking to the City that funds received from Hines or the Site Developer under the APS or all base rent for the first 33 years of the term of the GL, as the case may be, shall be used for re-investment in the revitalization of the waterfront in accordance with Policy and Finance Committee Report 9, Clause 1, headed “Governance Structure for Toronto Waterfront Revitalization” adopted  by Council at its meeting on November 30, December 1 and 2, 2004.

d.         WT shall have provided an undertaking to the City to pay, on behalf of the City, all costs and expenses payable or incurred by the City under the APS or GL including purchase price adjustments, closing adjustments, rent adjustments, interest charges, costs of surveys and reference plans, registration and closing costs and out of pocket expenses.

e.         Receipt by the City of a legal opinion in respect of the corporate status, powers and authority of the Site Developer to enter into and perform the obligations under the APS or GL and the DA in form and content satisfactory to the City Solicitor.

f.          WT shall have provided confirmation that it has completed a satisfactory due diligence review of the financial capacity, corporate status, powers and authority of the Site Developer and its ability to complete its obligations under the APS or GL and DA, to the satisfaction of the Deputy City Manager whose responsibilities include Waterfront Revitalization in consultation with the Chief Corporate Officer and in a form satisfactory to the City Solicitor.

8.         Council waive applicable City disposal and leasing policies and practices for City-owned lands including, but not limited to, the City's Housing First Policy, property transactions with single purpose companies, collection of receivables, typical City use clause for leased lands, typical assignment and subletting restrictions, signage and naming rights, and the use of non-disturbance agreements, to the extent that they are inconsistent with, or not included in the terms and conditions of the LDA or any APS or GL, in recognition of WT's role as master developer and lead negotiator of revitalization initiatives in the City's waterfront, including the Bayside Lands.

9.         Council grant authority for the City to direct Hines and the Site Developers to pay the purchase prices under all APSs and the base rents for the first 33 years of the term of all GLs, the revenues from all Ancillary Agreements, if applicable and all other amounts payable to the City under such transactions to  WT, or as WT may otherwise direct, in form and content satisfactory to the City Solicitor.

10.       Council direct the Waterfront Project Director that the following amounts shall be recognized as part of the City’s overall contribution to waterfront renewal, and be reported by WT in its quarterly funding reports submitted to the three orders of government as part of the Waterfront Renewal Accounting Protocol:

a.         The purchase price under each APS.

b.         The base rents for the first 33 years of the term under each GL.

c.         The value of the infrastructure contribution as would apply to the Sites.

d.         Any other amounts payable by Hines or a Site Developer to the City for any Ancillary Agreements under the LDA, APS, GL, ROFO, ROFR transactions.

e.         The value of the parkland contribution as would apply to the Sites.

11.       Council authorize WT to capitalize the base rent for the first 33 years of each GL subject to the proceeds being reinvested in Waterfront Revitalization.

12.       Council acknowledge the Section 37 infrastructure contribution required under the zoning by-law is included in the purchase price for the land and thus is not required to be paid for the Sale Sites.

13.       Council deem the parkland dedication substantially as shown in Figure 1, which is consistent with the EBF Precinct Plan and zoning by-law, satisfies all parkland dedication requirements for this development.

14.       Council authorize the Deputy City Manager whose responsibilities include Waterfront Revitalization, in consultation with the Chief Corporate Officer and City Solicitor, to negotiate the LDA, the APSs, GLs and any Ancillary Agreements contemplated under such transactions, including any amending agreements in relation to such agreements, not materially inconsistent with the major terms and conditions described in Attachments 1, 2 and 3 to this report as approved by Council.

15.       The Chief Corporate Officer and Deputy City Manager whose responsibilities include Waterfront Revitalization, be authorized severally to execute and deliver the LDA, all APSs, GLs and all Ancillary Agreements and documents contemplated under such documentation, on behalf of the City.

16.       Council grant authority to the Chief Corporate Officer or his successor/designate, in consultation with the Waterfront Project Director, to administer and manage the LDA, APSs, GLs, and all Ancillary Agreements, except to the extent such administration and management has been otherwise directed by the Chief Corporate Officer to WT to undertake, including the provision of any consents (including but not limited to consents to any subleases, assignments, financial charges of any interests in any GL or Leased Site), approvals, waivers, notices (including notices of termination) provided that the Chief Corporate Officer may, at any time, refer consideration of such matters (including their content) to City Council for its determination and direction.

17.       Subject to Part 19. of this Report, and with the written consent of WT, the City consent, solely in its capacity as land owner of the Bayside Lands, to any planning and development application by Hines or a Site Developer, except for any plan of subdivision application and except for any environmental applications, in furtherance of the development of the Bayside Lands provided Hines or the Site Developer agrees to assume all obligations including costs and liabilities under such application, provided the applicable LDA, APS or GL and DA have been executed and all requirements and obligations of Hines and the Site Developer therein are in good standing, and subject to such other terms satisfactory to the Deputy City Manager whose responsibilities include Waterfront Revitalization and in form satisfactory to the City Solicitor, or alternatively, that the City itself execute such documentation solely in its capacity as land owner.

18.       Subject to Part 19. of this Report, the City consent to WT acting as the City’s agent as owner of the Bayside Lands to sign any planning and development, infrastructure, servicing or any other applications and agreements including agreements with Toronto Hydro, Enbridge Gas or any third party utility provider, required for the development of the Bayside Lands, except for any environmental applications or agreements, provided WT agrees to assume all obligations including costs and liabilities under such documentation and subject to such other terms satisfactory to the Deputy City Manager whose responsibilities include Waterfront Revitalization and in form satisfactory to the City Solicitor, or alternatively, that the City itself execute such documentation solely in its capacity as land owner.

19        All actions described in this report shall be taken by or on behalf of the City in its capacity as land owner and not in its capacity as a planning authority under the Planning Act, the City of Toronto Act, 2006, or otherwise and such actions are not intended to and do not fetter the City’s planning and municipal rights and responsibilities.

20.       The Waterfront Project Director report to Executive Committee on any proposal accepted by Waterfront Toronto for the development of Affordable Housing Sites for affordable rental housing or an affordable rental housing pilot project.

21.       Waterfront Toronto, in consultation with TTC and City staff, be authorized to prepare an addendum to the East Bayfront Transit EA in order to allow a second access point to Bayside from Queens Quay East.

22.       The City Solicitor be authorized to complete any of the transactions contemplated under the LDA on behalf of the City, except to the extent that such obligations have been directed by the Chief Corporate Officer to WT to undertake, including amending closing dates and other dates, and amending and waiving terms and conditions, on such terms as she considers reasonable.

23.       Prior to execution of any of the agreements contemplated herein, WT to provide confirmation to the satisfaction of the Deputy City Manager whose responsibilities include Waterfront Revitalization that:

a.         The other orders of government have approved the governance changes required to allow WT to borrow the funds required to meet its infrastructure obligations under the PA.

b.         The required Infrastructure Ontario loan has been secured.

c.         Funding necessary to complete the infrastructure obligations under the PA has been approved by the three orders of government through an update to the Waterfront Toronto Long-Term Funding Plan. 

24.       Prior to the City entering into the Land Development Agreement, the following matters shall be completed or provided for to the satisfaction of the Deputy City Manager whose responsibilities include Waterfront Revitalization, in consultation with the City Solicitor and other City officials as appropriate:

a.         Receipt of a legal opinion from WT's lawyers with respect to the potential environmental liabilities of the City in entering into the Bayside transactions being  remote.

b.         Receipt from the insurer under the Pollution and Remediation Legal Liability Policy of an amendment to the Policy to clarify the discretion to be exercised with respect to the provision of on-site coverage.

c.         Analysis and estimation of potential remediation and risk assessment costs for the Bayside Lands, satisfactory protection regarding the completion of such work and confirmation of appropriate liability protection.

25.       City Council authorize the public release of the confidential information in Attachment 5 upon completion of the development of the publicly-owned lands in EBF as determined by the Deputy City Manager whose responsibilities include Waterfront Revitalization.

26.       The appropriate City officials be authorized and directed to take the necessary action to give effect thereto.

Toronto Waterfront Revitalization Corporation (WT), as the City’s designated revitalization lead in East Bayfront (EBF), has endorsed the sale and lease of certain City-owned lands known as Bayside to Hines Canada Management Company ULC (Hines), subject to approval of Toronto City Council.  Bayside is the vacant 4.0 hectare (10.0 acre) parcel in the East Bayfront precinct bounded by Sherbourne Common, Queens Quay East, Parliament Slip and the Inner Harbour as shown on the key map.  The development concept put forward by Hines is a mixed-use development consisting of approximately 185,000 m2 (2.0 million sq. ft.) of market residential, affordable rental housing, commercial/office, retail, child care, community and cultural/civic uses (see Figure 1).  

This report summarizes the results of City staff’s review of WT’s proposal and seeks Council authorization to enter into an “umbrella” Land Development Agreement (LDA) and future Agreements of Purchase and Sale (APS) and Ground Leases, with Hines (Development Partner) and/or its Site Developers subject to the recommendations in this report.  The major terms for each of the three prospective types of transactions in which the City will be a party appear in Attachments 1, 2 and 3 respectively. 

The LDA applies to the whole of the Bayside site and sets out the parameters for all future transactions between the City and Hines or its Site Developers.  The future transactions will involve either a conveyance in fee simple for the market residential blocks or a 99 year term following a 3-year construction period for the non-residential blocks.  The affordable housing blocks shown in Figure 1 are not proposed to be disposed of through this report.  Rather, it is proposed that the blocks be reserved for this purpose as part of the transaction and that Hines be given a first right of offer and right of first refusal should WT or the City wish to proceed with an affordable housing project.  The disposition of the affordable housing blocks will be the subject of a future report to Council when a specific proposal materializes. 

Terms relating to the development of the project are set out in a Project Agreement (PA) between WT, as revitalization lead with responsibility for the overall coordination of the project and infrastructure and Hines as development lead.  Although the City is not a party to the PA, many of the waterfront revitalization aspirations to be delivered by WT are secured through this agreement and are addressed in this staff report.  The major terms of the PA between WT and Hines appear in Attachment 4.

Notwithstanding the focus of staff’s review on the details of the transaction, certain elements of the transaction have necessitated a concurrent City review of related issues.   The first item concerns the proposal for access roads to the site from Queens Quay East.  Under the recently-approved East Bayfront Transit Environmental Assessment, only one road access located central to the site is planned.  Council’s direction at the time of the EA endorsement was that any additional access points to Queens Quay East will require the approval of City Transportation and TTC, and should not result in any material delays to transit through this corridor.  TTC staff do not support the introduction of a second access road. After careful review, detailed more fully in this report, City Planning and Transportation staff have advised that the introduction of a second access will have no material impact on transit service through the corridor. It is recommended that City Council authorized WT to prepare an addendum to the East Bayfront Transit EA in order to allow a second access point to Bayside from Queens Quay East.

The second item involves WT’s capacity to commit to the estimated $120 M of infrastructure, much of which is necessary to service the Bayside lands.  At the present time, this infrastructure is unfunded in the Waterfront Long Term Funding Plan.  Through positive discussions with the City and other government partners, WT is proposing to secure this funding through a combination of borrowing from Infrastructure Ontario (IO), reallocations within its budget, and matching Bayside infrastructure needs with its cash flow from revenues. As part of this process, WT was requested to ensure that funding for transit to service Bayside, a critical underpinning of the transaction, is secured. In response, WT confirms that it is reviewing recommending that the government partners dedicate more direct funding, as opposed to revenues, to transit. Funding for East Bayfront transit remains intact at $150 M. Staff recommend that funding is confirmed to the City’s satisfaction.

The limitations on WT’s cash flow availability have resulted in the deferral of the lake-based stormwater management tank system in East Bayfront.  Under WT’s funding plan, construction will now take place in 2017 and 2018.  In the interim, WT will install an oil grit separator to manage stormwater quality in Bayside pending the construction of the permanent system. WT and Toronto Water are in discussion regarding this matter and the implications relating to the operations of the Sherbourne Common UV system.

As lead for waterfront revitalization, WT has been created to effectively compete in the residential and commercial marketplace, notwithstanding public ownership of the majority of the lands. In the case of those Bayside blocks designated for commercial development, the City has elected to enter into long-term ground leases.  Under such circumstances, the City would typically employ its standard ground lease.  However, in order to attract investment partners and tenants, some of the terms and conditions typically included in City leases are not contained in the proposed Ground Lease.  Instead, the transaction provides the proponent the flexibility needed in regard to financing without City approval, and to providing security for future tenants, in order for such investors and/or tenants to invest significant funds in the premises. 

The proposed transaction represents the culmination of a 2-year process which has engaged the private sector and achieves the City’s and WT’s objectives for Bayside. Along with the other projects underway in EBF, the Hines proposal represents a significant opportunity to realize the transformation of East Bayfront

The sale and lease transactions proposed by WT for the future development blocks in Bayside will not result in a financial impact on the City. All of the funds required for the approval and implementation of this development are to be borne by WT or the Development Partner and its Site Developers. In order for WT to cover its obligations in the Bayside transaction agreements, it is in the process of securing a loan from Infrastructure Ontario (IO) as discussed in the Comment section of this report.

Any need for adjustments within the Waterfront Toronto Long Term Funding Plan in order for WT to fulfill its obligations related to the provision of transit, infrastructure and public realm improvements at Bayside will be addressed in the proposed 2011 Waterfront Capital Budget.

In accordance with procedure for waterfront land revenues outlined in Policy and Finance Committee Report 9, Clause 1, headed “Governance Structure for Toronto Waterfront Revitalization” adopted by Council at its meeting of November 30, December 1 and 2, 2004, the revenues derived from the sale or lease of City-owned lands in Bayside will be reinvested in waterfront revitalization through WT.

WT intends to capitalize the rental revenue from the first 33 years of any 99-year ground leases for the commercial/office components of Bayside. The rental revenue from the remainder of the said terms will flow to the City.

The Deputy City Manager and Chief Financial Officer has reviewed this report and agrees with the financial impact information.