Item - 2015.EX4.6

The Executive Committee recommends that:

1.  City Council approve the preliminary funding model for the Community/Cultural Hub and the Live/Work Units as set out in the Financial Impact section of the report (March 11, 2015) from the Director, Affordable Housing Office and the General Manager, Economic Development and Culture, based on plans to be submitted to the City's Planning Department by the Rockport Group for the market rental building.

2.  City Council authorize the Director, Affordable Housing Office to co-ordinate the negotiation of the agreements and security required to proceed with the Hub, Live/Work Units and Open Space Area, in consultation with relevant City divisions, the Toronto Parking Authority, the Rockport Group, Woodbourne Capital Management and Toronto Artscape Inc.

3.  City Council authorize the designation of Toronto Artscape Inc. as the operator/leaseholder of the proposed 26 Live/Work Units, conditional upon:

a.  Toronto Artscape Inc. providing a finalized business case and lease that confirms the viability of the Live/Work Units, satisfactory to the Director, Affordable Housing Office; and

b.  City Council granting final planning approval for the Development.
 

4.  City Council authorize the designation of Toronto Artscape Inc. as the operator/leaseholder and manager of the proposed Community/Cultural Hub and the Open Space Area, subject to the following conditions:

 
a.  Toronto Artscape Inc. providing a finalized business case and lease that confirms the viability of the Community/Cultural Hub and Open Space Area, satisfactory to the General Manager, Economic Development and Culture; and

b.  City Council granting final planning approval for the Development and final approval of the Funding Model.

 
5.  City Council direct the Chief Planner and Executive Director, City Planning to expedite the planning review process once the Rockport Group has made the necessary planning applications.

6.  City Council direct that, should the developer not be able to obtain above grade permits and commence construction of the new apartment building by the end of July 2016 and the developer is not willing to extend the fixed price term beyond that period, the Deputy City Manager, Cluster A report through Executive Committee to City Council on whether to proceed with the Proposal, and if so, the source of funds required.

7.  City Council direct the Director, Affordable Housing Office, in consultation with relevant Divisions, to report through Executive Committee to City Council on the final funding and program for the Community/Cultural Hub, the Live/Work Units and the Open Space Area required for final approval, when Council considers the land use approvals for the overall project.

In August 2014, City Council directed staff to conduct due diligence on an innovative proposal (the "Proposal") to support the revitalization of the Weston community.  The Proposal includes the creation of an approximately 800-square meter community/cultural hub (the "Hub"), 26 affordable rental housing live/work units (the "Live/Work Units) for artists and an approximately 1,150 square meter "Open Space Area" to continue the Weston Farmers' Market and other community uses. This is to be built in conjunction with a purpose built market rental building comprised of approximately 350 units (collectively "the Development"). Council directed staff to report in early 2015 on City and third-party funding and other resources required to proceed.

The Proposal made by 22 John Street Developments Inc. (a Rockport Group company) to the Toronto Parking Authority (TPA), has the Development being located on the surplus City-owned TPA surface parking lot at 22 John Street, together with vacant space in the base of the adjacent rental high-rise building at 33 King Street. A new, approximately 75-space TPA replacement parking lot will serve local businesses and the community. Artscape will be the eventual leaseholder operator of the Community/Cultural Hub and 26 Live/Work Units.

The Weston community has been identified as one of the City's 31 Neighbourhood Improvement Areas (NIAs), with unemployment at a higher rate than the city average and a lack of affordable housing. The proposed multi-million dollar investment in the Development will create some 940 new jobs, which, together with the local expansion of public transit by Metrolinx and GO Transit will contribute to an area-wide social and economic revitalization.

Since August, staff from various City Divisions, led by the Affordable Housing Office, have worked with the TPA, the Rockport Group and its development participants, Woodbourne Capital Management and Toronto Artscape Inc. ("Artscape"), in conducting further due diligence on the unique funding and program model proposed. As a result of this work, additional refinements have been made to the overall proposal. The cost to build the Community/Cultural Hub, Live/Work Units and Open Space Area is projected to be $13.3 million, including an operating reserve.

This report recommends that Council approve the proposed preliminary funding model and program, conditional on the completion of on-going due diligence.

Council approval of the recommendations in this report will trigger the filing of planning applications by 22 John Street Developments Inc. and enable the next phase of due diligence by City staff.

The expectation of the parties is that by the end of this year or early in 2016 staff will have completed their due diligence on the Development. This will include determining what legal agreements will be necessary, and their content, based on the outcome of planning approvals. Staff will then be in a position to report on the proposed planning approvals, the overall program, and the final funding and proposal details which are set out in a preliminary fashion in this report.