Item - 2013.EX30.1

The Executive Committee recommends that:

1.         City Council consent to supporting the establishment of a new casino gaming site in the Toronto Ontario Lottery and Gaming Corporation’s (OLG) C1 zone within the Exhibition Place or downtown core study areas, as shown on the map in Appendix A to the report (April 5, 2013) from the City Manager, as required under O.Reg 81/12, subject to:

a.         the OLG entering into an agreement with the City, in a form satisfactory to the City Solicitor whereby it:

i.          commits to meeting all of the City's conditions set out below and these recommendations (the “Conditions”); and to implementing the Conditions including throughout its procurement process and in the development of the OLG business case required by O. Reg. 81/12;

ii.         commits to following the process set out in these recommendations; and

iii.        refrains from either seeking Ministerial approval of a business case for a casino or authorizing the establishment of a gaming site in Toronto until City Council has granted all planning approvals and entered into a hosting agreement securing a hosting fee.

b.         the OLG accelerating their procurement process and providing all necessary information to City Council, no later than Friday, November 15, 2013, in order for City staff to assess how the OLG and the proponent have addressed the City's conditions, as described in the process outlined in recommendation 1.a.

c.         the OLG submitting a report to the City Manager once it has selected a proponent through its procurement process and before Ministerial approval of the business case has been obtained under O. Reg. 81/12;

d.         the report (described in recommendation 1.c.) providing the necessary information (as outlined in the planning assessment requirements and any other required documents) to the City Manager in order to assess how the OLG and proponent have met or have contractually committed to meet the Conditions including a fair hosting fee, and providing casino options with respect to the size, location and design of the casino and the convention development and demonstrating that the Conditions are being addressed; and 

e.         City Council considering a report from the City Manager, in consultation with the City Solicitor and other City officials as required, advising of the information provided by the OLG in its report described in recommendations 1.c. and 1.d., and including:

i.          a description of how the proponent and/or OLG as appropriate have met or committed to  meeting the Conditions; or

ii.         advice that the proponent and OLG have failed to meet or demonstrate enforceable commitments to meet the Conditions and an option for Council to request that Ministerial approval of a business case for a casino be denied on basis of failure to meet the conditions;

f.          City Council state that any Council resolution under recommendation 1 supporting the establishment of a gaming site in C1 will be void, should the OLG fail to meet the requirements set out in the recommendations and in the conditions below, unless Council waives any unmet conditions when it considers the report from the City Manager, as described in recommendation 1.e.

and authorize the City Manager to negotiate and enter into an agreement (noted in recommendation 1.a.), in a form satisfactory to the City Solicitor.

2.         City Council support an expansion of the gaming site in the Ontario Lottery and Gaming Corporation’s (OLG) C2 zone at the existing Woodbine location, including additional slot machines and the introduction of live gaming tables, subject to the terms and conditions found below, and authorize the City Manager to enter into a hosting agreement with the OLG, in a form satisfactory to the City Solicitor, the terms of which shall include a commitment by the OLG to satisfy these conditions and which shall be in place for as long as the site is a gaming site.

3.         City Council request the Ontario Government to confirm that any new casino or expansion of existing facilities in the City of Toronto must comply with the City of Toronto’s planning process, including Council approval, and that Provincial Ministerial Zoning Orders are not to be utilized.

4.         City Council request the Ontario Government increase the proportion of gambling revenue dedicated to problem gambling interventions under the Ontario Problem Gambling Strategy to support increased prevention, treatment and research addressing problem gambling in the Toronto region, in order to mitigate the social and health consequences of increased access to gaming in Toronto or an adjacent municipality where a new gaming site may be established.

5.         City Council request the Province to amend any legislation and regulations as may be required to ensure that the conditions set out below can be met by the Ontario Lottery and Gaming Corporation (OLG) and can be secured by the City.

6.         City Council request and authorize the City Manager to discuss with the Province of Ontario, as part of a possible casino and convention centre development, the consolidation of Exhibition Place and Ontario Place into a single parcel of land under the management of a new Exhibition Place Corporation, jointly owned on a proportional share basis by the City and the Province.

7.         City Council request and authorize the City Manager to discuss with the Province of Ontario and report back on the possibility of consolidating the Metro Toronto Convention Centre and the Direct Energy Centre into a single, world-class exhibit and convention facility, able to attract the world's largest conventions, conferences and exhibitions.

8.         City Council request the Chief Planner and Executive Director, City Planning to report back on how to expedite the planning approvals to permit live-dealer table games at Woodbine at an appropriate time during the Provincial procurement process.

9.         City Council allocate the potential gaming revenues from hosting fees related to a casino to public transit expansion.

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(City of Toronto Conditions described in recommendations 1a and 5 above)

City of Toronto Conditions

The Ontario Lottery and Gaming Corporation (OLG) will include the following City of Toronto conditions to be addressed within its procurement process, the results of which will be evaluated in the City Manager's report back to Council, per recommendation 1.e.  The OLG will enter into an agreement with the successful proponent/casino operator whereby the successful proponent/casino operator will be bound to implement these conditions.  In complying with recommendation 1 above, the OLG will share this agreement with the City Manager and Council.  Where the City Manager or appropriate City official deems it appropriate, the OLG or casino operator will be required to provide financial security for the satisfaction of a condition.

C1 Gaming Zone Conditions

1.         For a casino located in the C1 zone, it is recommended that this consent only be provided on the basis of the following conditions:

a.         The OLG provide the City with at least two proposals for each of the Exhibition Place and Downtown Core Study areas, for a new C1 casino with gaming floor areas of 135,000 and up to 175,000 square feet, the specifications of required convention infrastructure, and the hosting fee attached to the proposals for Council's consideration, with the final location selection to be approved by Council.

(See Figure 1. Exhibition Place and Downtown Core in the report (April 5, 2013) from the City Manager)

b.         Limited casino related ancillary food/beverage and retail uses of up to 100,000 square feet; and the balance to be determined by the market.

c.         The proponents must provide a minimum of 813,000 square feet of total exhibition space inclusive of a minimum of 600,000 square feet of contiguous exhibition space; and a minimum of 235,000 square feet of associated meeting/ballroom space and that it would be one of the ten largest convention centres in North America at the time of entering into any agreements.  The proponent must deliver the convention space with a casino use and this will be secured through appropriate legal agreements containing obligations to construct a convention centre prior to or commensurate with a new casino use.

d.         The casino will have an urban form that is designed to fit within its local context, which could include distributing the casino floor area on multiple levels where appropriate;

2.         The casino operator(s) will develop an international marketing plan and demonstrate how the facility will attract tourists both nationally and internationally.

3.         The casino operator will:

a.         Demonstrate how the facility will contribute positively to existing businesses in the vicinity including, for example, agreements to purchase blocks of tickets from nearby theatres; and

b.         Work with the General Manager of Economic Development and Culture, to develop a mitigation strategy to minimize adverse impacts to existing businesses.

Conditions that apply to both C1 and C2 Gaming Zones

Economic Development and City Building

4.         When the OLG has selected a proponent and development applications are submitted to the City, if the proposal does not adequately demonstrate that physical, transportation and infrastructure impacts are appropriately mitigated or that modifications proposed to mitigate impacts are not acceptable to City Council, the OLG and their proponent will adjust the proposed gaming and non-gaming elements accordingly.

5.         Undertake an Economic Impact Assessment addressing the impact to the local area and the City and pay for the costs to have the assessment peer reviewed.

6.         Provide an Event Management Plan which identifies proposed entertainment options and co-ordination with other events occurring in proximity to the site.

Social and Health Considerations

7.         That the OLG include in its procurement process and a subsequent agreement with the successful proponent a requirement that respondents address and the successful proponent implement the following:

a.         a requirement that casino and other relevant operator(s) develop a joint Employment and Labour Market Plan with the City of Toronto to support casino and related (i.e. hotel, convention, etc.) development and operations. The Plan should include:

i.          An Employment and Labour Market Advisory Working Group to oversee development and implementation of the joint Employment and Labour Market Plan for a Toronto casino(s)' development and operation. The Employment and Labour Market Advisory Working Group could include representation from the City of Toronto, the successful casino operator(s) and relevant stakeholders.

ii.         In consultation with the City of Toronto, the OLG and/or casino operator(s) identify opportunities to partner with Toronto educational institutions to develop complementary skills training programs to support the joint Employment and Labour Market Plan for the development and operation of a Toronto casino(s).

b.         a requirement that casino and related operator(s) implement a supply chain diversity policy that:

i.          encourages opportunities for local businesses; and

ii.         ensures a casino(s) utilizes a continuing skilled supply base that resembles the diversity and multicultural heritage of Toronto without significantly compromising cost or quality of casino operations

c.         a requirement that the casino and related operator(s) jointly work with the City to reach agreements that allocate a limited number of facility operational hours annually to provide Toronto residents the use of a Toronto casino(s)' live entertainment and/or meeting space facilities for appropriate community cultural purposes at reduced/no cost to residents.

d.         a requirement that the OLG and casino operator(s) work with the City of Toronto and Toronto Medical Officer of Health to review and consider implementing the harm mitigation measures to address the negative impacts of problem gambling, as outlined in the Medical Officer of Health's report.

e.         the requirement that the OLG and/or a casino operator(s) participate on and co-operate with a Toronto Casino Social Contract Monitoring Committee, mandated to independently monitor, assess and regularly report on the implementation progress of the Toronto Casino Social Contract's social, health, employment opportunities, skills training and apprenticeship commitments and the impacts of casino operations on Toronto residents.

8.         The Toronto Casino Social Contract Monitoring Committee include representatives of the Ontario Lottery and Gaming Corporation, Social Development, Finance  and Administration, Toronto Public Health, the Toronto Police Service, and invite representatives from the Ministry of Health and Long-Term Care, the Centre for Addiction and Mental Health and relevant research and community-based stakeholders.

Financial Considerations

9.         For a new gaming site located in the OLG C1 zone in Toronto, that this consent be conditional on OLG providing an annual amount payable by OLG to Toronto equal to the greater of:

One Hundred Million Dollars ($100,000,000), adjusted annually by the Consumer Price Index for the Toronto CMA;

and

The sum of the amounts (a) paid to the Province and (b) retained by OLG from the gaming revenue received by OLG from the operation of the C1 gaming site (including gaming related indirect revenues such as cover charges, membership fees, licensing or performance fees).

10.       For an expanded gaming site in the OLG C2 zone at the existing Woodbine location , that this consent be conditional on OLG providing an annual amount payable by OLG to Toronto equal to:

a.         The sum of the amounts (i) paid to the Province and (ii) retained by OLG from any gaming revenue received by OLG (including indirect gaming related revenues such as cover charges, membership fees, licensing or performance fees) from the operation of the expanded C2 gaming site exceeding the Six Hundred Million Dollars ($600,000,000) in revenue currently received by OLG from the operation of the Woodbine gaming site;

plus

b.         Fifteen Million Dollars ($15,000,000).

Development Conditions

General Conditions

Planning and Design

11.       A casino proposal in the City of Toronto must conform to the City's Official Plan and achieve consistency with City policies and guidelines respecting planning, development and design including the following:

•           Provide high quality architecture and urban design and that provides animated and active uses at grade.

•           Provide an architectural design that is consistent with the character of existing/planned development in the vicinity of the selected site and that has a density, scale, height and built form suitable for the site.

•           Ensure the project's design contributes to the city skyline while respecting existing landmarks and vistas and addressing transition.

•           Enhance the public realm in the vicinity of the project.

•           Ensure signage is of a high quality design and that it does not detract from the visual appearance of the architecture and character of the surrounding area.

•           Implement best practices and innovations for green design.

•           Address the provision of linkages with and between other public spaces, including enhancements to existing public spaces.

12.       The proponent will be required to present the proposal to the City’s Design Review Panel and revisions as appropriate and the design is to be consistent with the feedback provided.

13.       The OLG will submit the plans and documents outlined in Section 4.4 of Appendix B to the report (April 5, 2013) from the City Manager as part of the intermediate decision process.  

Transportation & Infrastructure

14.       A transit-focused approach that minimizes parking is required.

15.       Transportation and infrastructure costs/upgrades need to be determined and appropriately funded by the proponent. Funding for all transit, parking and transportation improvements requested by the proponent must be paid fully by the proponent and must not adversely influence current or future City transit funding priorities.

16.       A transportation study (transit, pedestrian, cycling and vehicular) which at a minimum addresses:

•           Traffic generation and any upgrades to the transportation system required to support the development;

•           Strategy for coach, taxi, shuttle bus, service, delivery and emergency vehicle movements; and

•           Provision of a parking rationale which minimizes parking and takes into account nearby transit services

17.       A Transportation Demand Management Plan to encourage use of transit and other transportation modes for both employees and visitors.

18.       Vehicle and pedestrian conflicts will be minimized by locating vehicular accesses away from major pedestrian routes.

19.       An infrastructure strategy that addresses servicing requirements is required and includes the submission of a Functional Servicing Study outlining the infrastructure works (internal and external to the selected site) necessary to support the development. The study is to address water consumption, sanitary and storm drainage, and the construction phasing of the infrastructure improvements, in accordance with the Servicing Report Terms of Reference in the City's Development Guide.

20.       The proponent will be required to address existing capacity and requirements for other utilities. Should any upgrades be required, these will be appropriately funded by the proponent.

Study Area Conditions

Exhibition Place

21.       Heritage resources (buildings/structures, landscapes, and archaeological) must be conserved and enhanced, including maintaining views to existing heritage buildings.

22.       New convention space/trade show space must be provided as part of new development to supplement existing space in accordance with plans developed by Exhibition Place and to reflect citywide objectives for convention expansion.

23.       New connections, (pedestrian, cycling, vehicular, and transit) to the adjacent and broader areas will be required and the cost of these improvements, whether required or voluntary, will be at the sole cost of the proponent. Financial securities for required or voluntary improvements will be required to ensure the provision of the connections.

24.       The value of landscape, open space areas is integral to the campus like setting of Exhibition Place. No net loss of landscape, open space areas should be permitted. The loss of planned open space is not desirable (i.e. Festival Plaza). Any development proposed within the Festival Plaza or loss of existing landscaped, open space areas, will be required to develop a strategy that accommodates this function elsewhere within the Lands to the satisfaction of Exhibition Place’s Board of Governors and the Chief Planner and Executive Director, City Planning.

25.       A new, permanent casino proposal will be required to submit a strategy outlining how the current and planned programming will be accommodated, including addressing quality of alternative space provided for the existing programs and events to the satisfaction of Exhibition Place’s Board of Governors and the Chief Planner and Executive Director, City Planning.

26.       Given the unique layout and dynamic nature of the Exhibition Place lands and the limited number of undeveloped parcels, other amenities proposed with a new, permanent casino may be required to be located on multiple parcels within Exhibition Place.

27.       Ancillary retail and service uses are to be provided generally at grade along public frontages with entrances provided directly from grade and public access.

28.       A proposal for a new, permanent casino would require a review of the existing and projected capacity of the road and transit network, parking infrastructure, and sidewalk capacity. Should a casino be proposed for this location, a full review of the existing and planned transportation and public transit system would be necessary through the review of a Site Plan Control application.

29.       A comprehensive review of parking requirements for the functions and programming at Exhibition Place is required. Parking provision will reflect Exhibition Place’s demand and the resulting demand from a new casino. If the specific site is an existing surface parking lot, new and/or replacement parking will be located below-grade in accordance with the planning framework for Exhibition Place.

30.       New pedestrian connections to buildings/structures and transit stops will be weather protected.

Downtown

31.       The form and scale of the development will be consistent with the City’s built form policies and any applicable guidelines including those for tall buildings. A base building of three- to four-storeys is desirable with a tall building element appropriately set back from the base building.

32.       New convention centre space of sufficient size to better position Toronto globally in its ability to host large conventions and meetings is required. This space could be provided as an addition to the existing Metro Toronto Convention Centre, or as a new building. In both instances, achieving the total amount of contiguous exhibit space, total exhibit space and provision of meeting rooms/ballrooms identified in the Operating Plan will be required. For new convention space, it will reflect the strategy adopted in 1994 for the expansion to the Metro Toronto Convention Centre, which locates a considerable amount of floor area below grade.

33.       New arts and culture venues are desirable, but their size is to be limited and impacts minimized. This will be demonstrated through the submission on an event management plan and market analysis of impacts on existing theatre spaces.

34.       Ancillary retail and service uses are to be generally located at grade with frequent individual entrances provided directly from the municipal sidewalk. Wider sidewalks and setting buildings back where public streets are narrow may be required to create a more interesting, animated and safer street environment. 

35.       A proposal for a new casino would require a review of the existing and projected capacity of the road and transit network, parking infrastructure, and sidewalk capacity. Should a casino be proposed in the downtown study area, a full review of the existing and planned transportation and public transit system would be necessary through the review of a rezoning application.

36.       Where the selected site is within close proximity to the City’s PATH system, enhanced PATH connections will be provided.

37.       Heritage resources (buildings/structures, landscapes, and archaeological) must be conserved, including maintaining important views.

Woodbine

38.       Any casino development would need to address the approved Community Improvement Plan for community economic development and align with the objective of creating a transformative project for this area of the city.

39.       Any expansion should build upon and support the international calibre race track operations at Woodbine. 

40.       A proposal for the expansion of the existing casino would require a review of the existing and projected capacity of the road and transit network, parking requirements and infrastructure. Should an expanded casino be proposed for this location, a full review of the existing and planned transportation, infrastructure and public transit system would be necessary.

41.       New connections as appropriate (pedestrian, cycling, vehicular, and transit) to the adjacent and broader areas will be required.

42.       Appropriate and supportable levels of retail (other amenities) will have to be included as part of any casino development.

43.       Urban design considerations consistent with the Draft Urban Design Guidelines for Woodbine will be required, including the break-up of large site into urban streets and blocks, provision of public streets which connect to the surrounding area and the city, creating a comfortable and attractive pedestrian environment, providing public open space and upgrading of surface parking areas.

Additional Conditions

44.       The proponent, should a new casino be approved at Exhibition Place, will commit to working with the CNE Association to facilitate the continuation of the Annual CNE fair, by:

a.         Providing ongoing financial sponsorship that will offset any potential loss of revenue due to the elimination of its charity casino, changes to admission policies, parking operations, etc.

 b.        Ensuring sufficient suitable space is maintained to ensure the continuation of a vibrant, successful annual fair.

45.       The OLG to give preference to proponents who demonstrate experience designing, building and managing environmentally sustainable, i.e. "green" facilities.

46.       The casino operator will commit to signing a labour peace agreement with its employees, and organizations representing them, that will ensure that convention and gaming operations are not affected by labour disruptions.

47.       The casino operator will commit to a Toronto residents-first local hiring policy and agree to incorporate gender equity and other diversity principles into its human resources practices, including rehabilitated gamblers that can be integrated in gainful employment with the complex, excluding the casino portion.

The Ontario Lottery and Gaming Corporation (OLG) is undertaking modernization of casino gaming operations across Ontario. The OLG has identified 29 gaming zones, where it intends to issue a request for proposal for a private sector provider to develop and/or operate a casino in each zone. Two of the zones (C1 and C2) each include areas of Toronto and adjacent municipalities along the city's perimeter. A City Council resolution is required for the OLG to establish a new gaming site.

At the November 5, 2012 Executive Committee meeting, the City Manager presented a preliminary report, "Considering a New Casino in Toronto", and was directed to conduct a public consultation, provide further analysis, and report back with recommendations. This report responds to the requests of Executive Committee, and provides analysis on both the OLG C1 and C2 zones. City staff reviewed the issue of a new downtown casino and expanded gaming at the Woodbine site by evaluating key economic, city building, social, health, and fiscal criteria. A detailed analysis of specific study areas in the Port Lands, Exhibition Place, downtown core, and Woodbine is also provided for Council's consideration on possible locations.

Should Council consider new casino development, a citywide perspective should be taken to support the potential that exists in both the C1 and C2 zones. A standalone casino is not supported by staff. Any consideration of a new casino in the C1 zone requires that it be in the form of an urban, appropriately-sized entertainment complex that enhances Toronto as a convention and tourist destination. Increasing convention space would be a strategic economic development benefit that could be leveraged with a casino given the opportunities to co-locate these facilities and the synergistic relationship between the casino and convention business. Expanding convention space to bring Toronto into the top ten for convention space in North America has the potential to attract more tourists and would be a key economic driver for the City. It is critical that an appropriate sized casino in the C1 zone include the development of a top-rate convention and trade show infrastructure to improve Toronto's competitiveness in attracting the largest class of events. An expanded gaming facility in the C2 zone should enable the entertainment and retail focus of the existing approved planning framework for Woodbine, and support a revitalization strategy for the area.

In addition, the cross-corporate staff analysis identified a number of other economic, social, health, planning and fiscal conditions to address impacts related to new casino development. The advice resulting from this analysis is found in the recommendations section of this report, and Appendix A as City conditions Council may wish to request of the OLG and the Province.

Given that the OLG has not selected a proponent and the City has not received a detailed proposal for a specific site in the C1 zone, the report also provides options for Council consideration. Should Council wish to pass the statutorily required resolution "supporting the establishment of a gaming site in the municipality" (O. Reg. 81/12), it is recommended the resolution be conditional upon the OLG meeting Council's requirements. A key requirement is for the OLG to report back to the City Manager following the procurement process, at which time Council can be advised whether the City's conditions are being addressed. If conditions have not been addressed to the satisfaction of Council, it could request that the Minister of Finance not agree to the business case for the proposed casino. Under the regulation as currently worded, the Minister must accept the business case before the OLG can establish a casino.

The following summary is outlined in three main sections. Section A outlines the results of a cross-corporate staff analysis and a possible approach to expanded gaming for Council's consideration. Section B outlines the results of the public consultation, stakeholder meetings and a telephone poll conducted by the City. Section C provides an overview of the staff recommendations and related implementation considerations.

SECTION A: APPROACH TO EXPANDED GAMING IN C1 AND C2

The OLG has provided an estimate of the size and scope of a new casino facility the market is contemplating in C1 based on results of a Request for Information (RFI). A resort-styled integrated entertainment complex has been suggested in the C1 zone with a maximum gaming floor of 250,000 square feet. The OLG has indicated interest in maintaining the Woodbine slot facility in the C2 zone with the possible introduction of table games and limited amenities subject to market demand.

The report outlines an approach to a new C1 casino development to better inform the OLG's procurement process and signal to the market the key opportunities and challenges from the City's perspective of a new casino development in the C1 zone. The report also considers the existing Woodbine gaming facility and the contributions it makes to the City and area. The approach described below provides a response to the OLG for Council's consideration that more appropriately reflects the economic, city building, social, health and fiscal objectives of the City.

1. Approach to Development

An integrated entertainment complex (IEC) is suggested in both zones (C1 and C2). Planning staff has noted in their analysis that a stand-alone casino is neither practical nor desirable. Economic development direction also supports an IEC, with a convention infrastructure focus in the C1 zone, and an urban entertainment and retail destination in the C2 zone. Through the public consultation process, community members were asked about their preference for either a stand-alone casino or IEC. In all three C1 study area locations, the results indicate a preference for an IEC, a casino with other integrated components (i.e. hotel, retail, convention, etc.).

1.1 C1 Zone: Convention and Trade Show Focused Development

Convention Development

An expanded first-rate convention centre is the most significant opportunity that could be leveraged as part of an IEC. A facility that can attract some of the largest conferences, conventions and trade shows in North America would deliver a significant increase in visitors to the city and ongoing economic and city building benefits. If City Council consents to host a casino in the C1 zone, then it should require that the proponent also builds and develops an operating plan for an associated convention centre that is competitive with other top-ranked North American facilities.

A top-rate convention centre is potentially a bigger tourism draw than a casino. The 10 largest convention centres in North America provide at least 813,000 square feet of total exhibit space (at least 600,000 square feet of contiguous space), in addition to 235,000 square feet of meeting space. Toronto does not have a facility comparable in scale and layout. For example, the Metro Toronto Convention Centre is currently ranked the 33rd largest in North America, with 460,000 square feet of exhibit space and a total of 122,000 square feet of meeting/ballroom space.

A convention venue of the scale described, geared towards the largest class of events, could attract over 130,000 additional visitors annually to Toronto, and generate an additional $392 million of direct spending. The potential adverse impact on existing jobs and businesses resulting from a new casino are mitigated by the presence of a top rate convention centre providing a tourism draw for visitors from outside the region.

City Planning Analysis (C1 Zone)

As previously stated, the OLG has provided an initial estimate of market demand for an IEC in the C1 zone, with a casino gaming floor of up to 250,000 square feet (see Table 1). City Planning assessed the OLG estimates on the potential use, as well as the size and type of facility in the C1 zone that would be consistent with city building objectives. City Planning is of the view that the size, form and profile of the casino gaming floor should not exceed 135,000 square feet, with a regulated number of slot machines and table games. The analysis also identifies that a format more suitable for Toronto's downtown area would consist of an urban entertainment complex, which would limit the casino related food, beverage and retail uses to 100,000 square feet, and leverage an increase in convention space. By taking this approach the following could be achieved:

•           The profile of the casino facility would be reduced, achieving an improved fit and compatibility within the overall diverse urban character of the downtown area;

•           Built form of the facility would be able to better integrate with the existing/planned context of the different study areas;

•           Transportation and infrastructure impacts would be more manageable;

•           The facility could be more of a tourist attraction rather than a large slot-focused operation as put forward by the OLG which is targeting primarily local patrons; and

•           Market impact on existing restaurant and retail streets could be minimized where casino-related retail is limited.

City Planning's analysis also demonstrates that of the study areas considered the downtown core and Exhibition Place study areas are potentially suitable locations for a convention centre focused IEC.

OLG Market Estimate for a Potential Toronto C1 Casino

In order for the City's proposed conditions for convention infrastructure to be viable, the OLG estimates that at least 175,000 square feet of casino gaming floor is required. City Planning recommends a casino gaming floor with a maximum of 135,000 square feet to mitigate planning concerns. The OLG has stated that 135,000 square feet of gaming floor will not be sufficient to generate the revenues necessary to support the scale of the City's convention requirements.

Given the importance of developing a top-rate convention centre, and generating a fair hosting fee for Toronto, the OLG has indicated willingness to work with the City through its procurement process to determine the actual market interest and ability to deliver on the City's proposed conditions. The report recommends the OLG proponent provide two options of 135,000 and up to175,000 square feet of gaming space, and outline the relative impacts on convention space potential, as well as the respective economic and fiscal benefits to the City. Table 1 compares the OLG's estimates of market demand with City proposed conditions (see Appendix A) required of an IEC in the C1 Zone.

Table 1. Comparison of OLG Initial Estimates to City of Toronto Conditions for C1 Zone

1.2 C2 Zone: Entertainment and Retail Focused Development

The report also addresses the current Woodbine slot facility's economic benefits and contributions to the City. The planning framework for Woodbine supports both the current gaming (slots and electronic games) as well as a potential full-service casino (slots and live dealer tables) in this area. The expansion has the potential to support additional development on this site that is in keeping with both the planning and economic framework approved by City Council in 2007, for Woodbine as an entertainment and retail destination. Given the rise in job losses in northwest Toronto and the threatened nature of the horse racing industry, expanding Woodbine supports broader revitalization plans for the area.

2. Economic Impact

C1 Zone

Table 2 and Table 3 provide an overview of the economic impacts associated with an illustrative IEC in the C1 zone. The jobs and GDP numbers reflect a development with an upper limit of 175,000 square feet of casino gaming floor, 1,048,000 square feet of convention and trade show infrastructure, 100,000 square feet of casino related retail and amenities, and an 800 room hotel, in the two C1 zone study areas that could be contemplated for a new casino and convention development—downtown core or Exhibition Place. The construction and operation of an IEC (as described above) in the Toronto C1 zone, at a cost of between $2.0 billion and 2.3 billion, would generate approximately 6,200 to 7,000 construction related FTE jobs and a $1.5-$1.75 billion increase in GDP over a three-year period, as well as approximately 10,070 ongoing operations FTE jobs and a $935 million annual increase in GDP related to operations.

Table 2. C1 Downtown: Total Jobs & GDP (Net) Construction

Table 3. C1 Downtown: Total Jobs & GDP (Net) Operations

C2 Zone

A similar set of economic impacts have been provided for an incremental expansion of the current gaming facility at Woodbine in Table 4 and 5. Projections are based on approximately 80,000 square feet of additional gaming floor and 450,000 square feet of food, beverage, retail space (for illustrative purposes), 170,000 square feet of meeting space, and an 800 room hotel. Expansion of the gaming facility and construction of additional amenities at Woodbine at a cost of about $1.3 billion is expected to generate approximately 4,000 full-time equivalent jobs and a $995 million increase in GDP related to construction over a three-year period and 1,600 (net) operations FTE jobs and a $155 million annual increase in GDP related to operations. However, based on OLG's comments regarding their preference for no immediate expansion at Woodbine, the larger the size of a new C1 facility, the less likely an expansion in C2 will be pursued due to the proximity of the C1 and C2 gaming zones.

Table 4. C2 Woodbine: Total Jobs & GDP (Net) Construction

Table 5. C2 Woodbine: Total Jobs & GDP (Net) Operations

Table 6 provides an overview of the described components of an integrated entertainment complex in both the C1 and C2 zone, the construction value, gross operating revenue and gross operating job impacts (not including spinoff from new convention delegates), and the revenues that will accrue to the City, Province and Federal Government.

Table 6. Economic & Financial Impact of New Casino & Convention Development (Illustrative Scenarios)

3. Hosting Fees

The City tabled terms with the OLG indicating Toronto receive a hosting fee from gaming revenues equivalent to the amount the Province receives through the OLG (i.e. equivalent to 50% of all government gaming related revenue), but no less than an annual minimum of $100 million. Based on these terms, the City estimates an annual hosting fee from a C1 casino, as described in Table 7, to be approximately $111 to $148 million per year, in addition to property tax revenues of $19 million.

In C2, recommended hosting fees have been estimated based on the City receiving an amount equal to what the Province would receive from the new gaming revenues, beyond those associated with the existing slot operations at Woodbine (approximately $600 million). The assumption being that the City continues to receive its current share of the Woodbine gaming revenue from existing operations (i.e. approximately $15 million on $600 million in gaming revenue). If Council does not support expansion of the Woodbine facility, executing the new standard municipal contribution agreement (MC Agreement) as currently proposed would continue the current entitlement of about $15 million.

Table 7. Comparison of Hosting Fee Estimates- City vs. OLG ($million)

Table 7 reflects the status of discussions as of mid-March. Subsequently, the Province has asked the OLG to review the MC Agreement to develop a standard approach and formula that is fair and provides equal treatment to all municipalities. City staff strongly advise that the revised municipal hosting fee formula must reflect the unique opportunity of a potential Toronto C1 casino. Projections for a new Toronto casino include more than $1 billion in new gaming revenues annually, and a minimum of a $2 billion investment in the development of an IEC with convention space, hotel and food, beverage, and retail. Furthermore, the new development and its operation would garner significant new revenues for the provincial and federal governments through sales and income tax which are inaccessible to the City. As a result, the hosting fee for a Toronto casino should reflect the magnitude of the potential development and operation, and the joint risks and contribution of partnering governments equally.

4. Social and Health Considerations

Staff assessed the conditions required to address the social and health impacts associated with expanded gaming in Toronto. The Medical Officer of Health has submitted a series of reports to the Board of Health (see decision history). The reports indicate problem gambling is a significant public health concern due to impacts on the health of gamblers and the community at large. Current estimates are that between 1.2 to 3.4% of people in Ontario are problem gamblers. The Medical Officer of Health also concluded that a casino located anywhere in the GTA will likely increase problem gambling and associated health risks for Toronto residents, with greater impacts on closer communities.

Social Considerations

A literature review was undertaken to identify social considerations and 'best practices' to be addressed in a Toronto Casino Social Contract. This work complements the research conducted by Toronto Public Health. One focus of the review was the relationship between crime and casino gambling. Findings indicate there is inconclusive evidence of a relationship between increased access to gambling and crime rates. Studies that found an increase in reported crime following the introduction of a casino into a community indicate increases tend to be small in magnitude and short-term in nature. A comprehensive literature review by Williams, Rehm, and Stevens (2011) outlines the relationship between gambling and crime may be mediated by a variety of factors, including extensive prior exposure to gambling; a small increase in availability of gambling relative to population size; existence of policies to protect against the negative impacts of gambling (e.g. effective programs to prevent problem gambling, limits on provision of readily available cheap alcohol, enhanced security/policing in casinos, etc.).

Toronto Casino Social Contract

The report recommends a condition whereby the OLG and selected operators work with the City to implement a Toronto Casino Social Contract. There are four areas of focus:

•           Harm mitigation strategies to address negative societal impacts

•           Social procurement opportunities in the development and operation of a casino, and related facilities (i.e. convention centre, hotel, etc.)

•           City and community use of space agreements for appropriate uses (i.e. local arts, culture, etc.).

•           Measuring and monitoring systems to independently assess Social Contract implementation and effectiveness

A Toronto Casino Social Contract should be pursued to ensure investments support the social and economic well-being of the City.

5. Social Impacts of a New Casino in the GTA

The C1 and C2 gaming zones both include areas of adjacent municipalities, including Mississauga, Richmond Hill, Markham and Vaughan. The OLG has indicated there will be a casino in the Greater Toronto Area (GTA) in the C1 zone. It must be emphasized, regardless of whether a new casino is located in Toronto or in an adjacent municipality, there is potentially greater social and health risks associated with increased access to gaming. Addressing the adverse impacts of problem gambling is critical given the OLG's clear interest in increasing access to gaming, through a new casino in the GTA, and the establishment of an online gaming presence as part of their modernization plans.

Through the public consultation and poll (see section B), Toronto residents expressed an interest in being able to influence the nature of the development of a new casino if there was a chance it could be located along the city's perimeter. Fifty-three percent of poll respondents indicated they would "rather the casino be in Toronto than in an adjacent municipality so that Toronto could better plan for and decide on its development".

SECTION B: PUBLIC ENGAGEMENT

At the November 5, 2012 meeting of Executive Committee, the City Manager was directed to conduct public consultation. The City Manager's engagement plan included consultations with the public, stakeholder interviews and a telephone poll.

1. Methodology

The Environics poll was a telephone survey of 902 Torontonians, with representation from across the City of Toronto. The sample used yields a margin of error of 3.3% (at the 95% confidence level). The data was statistically weighted to ensure the sample's regional, age and gender composition reflects that of the City's population.

Stakeholder interviews were conducted with various organizations on the potential for expanded gaming in Toronto. Twenty-nine organizations were contacted for interviews; representatives of 19 organizations took part in the interviews.

Through the public consultation process, 17,780 feedback forms were completed, and 5 public meetings were held. The input from the forms reflects the views of the participants and is not to be interpreted as demographically or statistically representative of the views of the Toronto population. Respondents had the option to self identify their postal code. The approximate breakdown of respondents by former municipality is presented below.

Table 8. Approximate percentage of Feedback Form respondents by former municipality

2. Highlights of Key Findings

Table 9. Public Views on a Casino in C1 and C2

According to the poll, support for a casino is greater in the areas outside of the former City of Toronto, with support ranging from 43 to 46% in the former municipalities of North York, York, East York, Etobicoke and Scarborough. Opposition to a casino in the same five former municipalities ranges from 43 to 52%. Fifty-nine percent of residents in the former City of Toronto oppose a new casino, while 33% are in support.

Reasons for Opposition:

Sixty-one percent of poll respondents opposed to a casino cited concerns about social problems, and another 17% indicated crime is a concern. Public consultation respondents opposed to a new casino provided a range of reasons, and in particular focused on social and health impacts (e.g. problem gambling, impact on family cohesion, crime, etc.).

Reasons for Support:

According to the poll, 44% of those who support a casino cited job creation, followed by 38% citing revenues as the top reasons. Public consultation respondents who supported a casino provided a range of reasons including enhanced economic development, employment, reduced taxes and revenues for other City projects and services.

Revenue:

According to the poll, residents who were asked if "there is a minimum amount of annual revenue to the City of Toronto which might address or balance any concerns you may have about a new casino": 40% would not support a casino for any amount; 32% would support a casino for amounts ranging from $0 to 150 million; 27% don't know.

According to the poll,

•           58% of residents disagreed when asked if they would rather have the City raise property taxes to generate revenue than approve the establishment of a new casino. 38% indicated they would prefer the City to raise property taxes.

•           46% of residents agreed that they would support a casino if the revenue was dedicated to a specific City service rather than to general revenues. 47% of residents disagreed.

•           Among residents that would support a casino if the revenue is directed to a specific City service, transit (33%), infrastructure (32%) and social services (29%) were the preferred service to direct revenue.

In the consultation feedback form, participants were asked whether revenue generated for the City of Toronto from the casino would influence their position on a casino. Approximately two-thirds (66.9%) of the respondents indicated that the amount of revenue would not have an influence on their position, while 26.8% said it would.

The final reports on the public consultation and Environics poll are included as Appendices F and G to this report.

SECTION C: RECOMMENDATIONS AND IMPLEMENTATION CONSIDERATIONS

1. Overview

In summary, the report considers the opportunities and challenges of new casino development in Toronto, inclusive of the results of the public consultation, and the telephone poll. City Planning has indicated that a new casino in the Toronto C1 zone should be appropriately sized to the unique urban context of the downtown area and be limited to 135,000 square feet of gaming area. However, OLG has indicated that a minimum of 175,000 square feet of gaming area is required to finance the scale of the City's convention requirements.

The focus of staff's consideration of a casino in the C1 zone is the concurrent expansion of convention facilities. A convention facility has a potential annual impact of $392 million of additional spending in Toronto, and supports the City's long term economic development and tourism objectives. The estimated annual financial benefits of $111 million (135,000 ft2) to $148 million (175,000 ft2), combined with a convention focused IEC could provide potential fiscal and economic benefits to Toronto.

There are also significant social and health impacts for Toronto residents as reported by the Medical Officer of Health. In making a decision, Council must be cognizant of the OLG decision that there will be a new GTA casino and that social and health impacts will affect Toronto residents with any GTA location. Thus, the social and health impacts must be weighed against economic and fiscal benefits with a Toronto location.

If Council agrees to proceed with a new casino in the C1 zone, the report recommends the OLG proponent provide options for 135,000 and up to 175,000 square feet of gaming space, and outlines the respective economic and fiscal benefits to the City, for Council's consideration. Outlined below is the process before Council with respect to giving consent to establish a new casino, and receiving additional information from the OLG and proponent on their ability to meet the City's conditions.

2. Municipal Consent

As previously noted, under the Ontario Lottery Gaming Corporation Act (OLGCA), a municipality must pass a resolution supporting the establishment of a gaming site. The following requirements exist for each of the two gaming zones in Toronto:

•           Toronto C1 zone: A resolution from Council supporting the establishment of a gaming site. 

•           Toronto C2 zone: A Council resolution is not required to maintain the current gaming use at Woodbine. If Council supports the expansion of the existing gaming facility into a casino by adding live dealer table games, Council is advised to approve a supporting resolution.

The recommendations in this report have been prepared based on the requirement to pass consent under the legislation, and the staff advice regarding conditions that Council may wish to attach to its consent.

3. Recommendations

•           The report proposes two options for Council consideration with respect to the C1 gaming zone:

a.         Consent to establish a new casino gaming site within the downtown core or Exhibition Place study areas subject to the City's attached conditions, and the OLG entering into an agreement providing Council an additional step to consider a report from the City Manager advising on whether the OLG and proponent have addressed the City's conditions.

b.         Do not provide consent to establish a new casino in the C1 zone.

•           The report also recommends Council consent to the expansion of the existing Woodbine slot facility to include live dealer gaming tables in the C2 zone, supporting Council approved plans for the area as an urban entertainment and retail destination.

•           Given the increase in access to gaming in the GTA under the OLG's modernization plan, the report also recommends the Province increase the proportion of gaming revenue dedicated to problem gambling interventions under the Ontario Problem Gambling Strategy.

4. Key Conditions

The following provides a summary of the key conditions if supporting expanded gaming:

C1 Gaming Zone

•           The OLG and proponent provide the City with options for a new C1 casino with a gaming floor of 135,000 and up to175,000 square feet of gaming space, including the specifications of required convention infrastructure, and the hosting fee for Council's consideration.

•           The proponent will develop convention and trade show meeting space concurrent with the casino, that includes at least 813,000 square feet of total exhibit space (600,000 square feet of contiguous exhibit space), in addition to 235,000 square feet of meeting/ballroom space.

•           The successful proponent will work with the City's Economic Development and Culture Division to minimize impacts to existing jobs and businesses, including demonstrating how the facility will contribute positively to existing businesses in the vicinity (e.g. agreements to purchase blocks of tickets from nearby theatres).

•           The OLG and proponent will consider location options in the downtown core study area and Exhibition Place areas where a new C1 casino could be contemplated.

C1 and C2 Gaming Zones

•           The proponent will be responsible for funding transportation and other infrastructure it requires related to any casino development.

•           The OLG must require the selected proponent(s) of an IEC (includes casino, convention centre and hotel), to execute and to implement a Toronto Casino Social Contract. Elements include harm mitigation strategies, social procurement opportunities, community use of space agreements for appropriate uses, and measuring and monitoring systems.

•           A casino proposal should achieve consistency with City policies and guidelines respecting planning, development, transportation, infrastructure and urban design.

•           Toronto should receive a hosting fee from gaming revenues that is equivalent to the total share the Province receives.

•           In the C1 Zone, the City must receive a hosting fee from the gaming revenues received by OLG that is equivalent to the amount that the Province receives (either directly or through retention by OLG), but no less than an annual minimum of $100 million (adjusted annually to inflation).

•           For an expanded C2 gaming facility, the City must receive a hosting fee equal to the sum of: (i) the $15 million which it currently receives from the existing Woodbine slot operation; and (ii) the amount received by the Province (either directly or through retention by OLG) from any gaming revenue received by OLG exceeding the $600 million it currently receives from the existing Woodbine slot operation.

5. Decision Process

Given the significance of the issue, the following decision process is proposed, should Council consent to a new casino in the Toronto C1 zone.

(See Figure 1 – Decision Process, in the report (April 5, 2013) from the City Manager)

This process would allow the OLG to include the Toronto C1 lands in its procurement process subject to entering into an agreement with the City. This agreement would ensure that the OLG include City conditions in its procurement process and ultimately within its business case which it will submit to the Minister of Finance for approval. This process would provide for an additional report by the City Manager to assess the results of the OLG procurement process and how City conditions will be met by the OLG and the proponent. If conditions have not been met to the satisfaction of Council, it could request that the Minister of Finance not agree to the business case for the proposed casino. Under the regulation as currently drafted, Ministerial agreement is required.