Item - 2017.EX29.2

City Council considered Items EX29.2 and TE28.7 together.

The Executive Committee recommends that:

1.  City Council authorize the Deputy City Manager, Cluster B, the Deputy City Manager, Cluster A, the Deputy City Manager, Internal Corporate Services and the Acting Chief Financial Officer, in consultation with City Solicitor to:

i.  advance the Stage Two Work Plan for Rail Deck Park in 2018 and 2019 as described in this report, and

ii.  utilize the City-owned lands in the rail corridor only in a manner consistent with the future establishment of a comprehensive park and open space development in the rail corridor area.

2.  City Council request Metrolinx to work in partnership with the Deputy City Manager, Cluster B, to advance the Spadina-Front GO station, the Rail Deck Park proposal and other aligned capital projects in the rail corridor, and request consideration of a decking structure in the planning, design and engineering work for the Spadina-Front GO station, including but not limited to the station's Transit Project Assessment Process ("TPAP") or addenda.

3.  City Council authorize the Deputy City Manager, Cluster B, the Deputy City Manager, Cluster A and the Acting Chief Financial Officer to advance the development of a growth-focused financial strategy for Rail Deck Park based on the following principles:

a.  a portion of Section 42 cash-in-lieu of parkland ("Section 42 CIL") contributions and other growth-related funds previously collected from development activity in Downtown Toronto will be applied towards project costs in a way that does not negatively impact on any parkland revenues generated for other areas of the city, and in accordance with existing allocation policies;

b.  incremental revenues from future rate increases to existing and/or new growth-related revenue tools, including Section 42 Cash-in-Lieu of parkland contributions, Section 37 contributions, Development Charges, and appropriate value capture tools, will be applied in such a manner that benefits all projects including the Rail Deck Park project and other parkland priorities across the city;

c.  commercial contributions will be sought that reflect the proportional benefit for properties and businesses in areas surrounding the project site resulting from the investment in Rail Deck Park;

d.  Federal and/or Provincial contributions will be sought through upcoming intergovernmental negotiations taking into account an assessment of potential economic and fiscal impacts; and

e.  a phased approach for implementation and construction of Rail Deck Park will be established consistent with projected revenues and contributions anticipated through Recommendations 3a, 3b, 3c, and 3d above.

4.  City Council direct the Deputy City Manager, Cluster B and the Acting Chief Financial Officer to proactively consult with the development and business communities concerning the principles of the financial strategy, including potential funding options, and any additional options to improve the development review process emanating from the End to End Review.

5.  City Council direct the Acting Chief Financial Officer to:

a.  engage land development, capital market and legal expertise in assessing the appropriate financing strategy for the project as required; and

b.  report back to Council with the implementation of this recommended strategy once the cost for securing the use and/or ownership of necessary properties is known and capital cost estimates have been refined in order for Council to confirm its definitive commitment to the project.

6.  City Council direct the Acting Chief Financial Officer to include eligible components of the Rail Deck Park project costs in the City's development charges by-law review currently underway.

7. City Council request the Province of Ontario to amend the Development Charges Act, 1997 ("DCA"), and to make any necessary regulation in order to:

a. exempt the Rail Deck Park project from the use of the service level cap;

b. include Rail Deck Park in the list of services not subject to a 10 percent reduction; and

c. deem any potential Federal/Provincial contributions towards the project to be used to benefit existing development.

8.  City Council request the Acting Chief Planner and Executive Director, City Planning, the General Manager of Parks, Forestry and Recreation and the Director, Toronto Office of Partnerships and other staff as appropriate to:

a.  undertake a public and stakeholder engagement process to inform early-stage design, including the formation of a Community Stakeholder Advisory Group;

b.  undertake a public ideas competition;

c.  develop a fundraising strategy and evaluate the potential for sponsorship and donations to support the project; and

d.  evaluate governance options for long-term programming, operations, and maintenance for Rail Deck Park.

9.  City Council request the Deputy City Manager, Cluster B, and the Deputy City Manager, Cluster A, in consultation with the Deputy City Manager, Internal Corporate Services, and the Acting Chief Financial Officer, to ensure that the Rail Deck Park Implementation Strategy be developed consistent with the principles and directions of the Parks and Recreation Facilities Master Plan and that this be addressed in the next report to Council.

10.  City Council direct the Deputy City Manager, Cluster B, and the Deputy City Manager, Cluster A, in consultation with the Deputy City Manager, Internal Corporate Services, and the Acting Chief Financial Officer, to assess the opportunities to create new connections to Rail Deck Park as part of the Stage Two Work Plan, including the Green Line along the hydro lands and the northern and southern extensions of the West Toronto Railpath, for the purpose of creating an inter-connected network of parks, with the next report to Council to include feasibility and funding options.

The Deputy City Manager, Cluster B and the Acting Chief Planner and Executive Director, City Planning gave a presentation on Update on Rail Deck Park, Parkland Strategy and Section 42 Review.

The Executive Committee considered items EX29.2, EX29.3 and EX29.4 together.

This report provides an update on the implementation strategy for the "Rail Deck Park" project approved by Council in October 2016. The scope of the proposed project is a 20 acre decking structure and park facility to be constructed in the Union Station Rail Corridor between Bathurst Street and Blue Jays Way.

This report provides summary information for the following areas:

-  Context and rationale for the project;

-  Emerging scope, phasing and order of magnitude costing;

-  Update on a "growth-focused" financial strategy;

-  Update on real estate matters; and

-  Recommendations for stage two of the project.

A separate report entitled "Rail Deck Park - City-Initiated Official Plan Amendment - Final Report" from the Acting Director, Community Planning, Toronto and East York (TE28.7) with recommendations to establish the land use designation for the area over the rail corridor as Parks and Open Space Areas was unanimously adopted by Toronto and East York Community Council on November 14, 2017.

1. Opportunity to Support Growth and Provide City-Wide Benefits

Rail Deck Park is a once-in-a-generation opportunity for a major new park that supports future development in Downtown Toronto while also providing city-wide benefits.

Over the past decade, there has been a fundamental shift in the amount of growth experienced across the city. Development intensity has been particularly acute in the core of the city where population grew by roughly three times the rate of the preceding ten years (40 per cent compared to 13 per cent).

The creation of new parks has not kept pace with this level of growth. Only two new parks provided in the Downtown area over the past 10 years have been greater than 3 hectares in size. The City is challenged in acquiring significant new parkland in a competitive real estate market. Typical land acquisition costs for free and unencumbered properties in the western area of Downtown Toronto range between $95 and $115 million per acre.

Significant Downtown population growth is expected to continue for the foreseeable future, with current projections showing that 140,000 to 180,000 units could be added through 2041.

If this growth is to continue, there is a need for significant new infrastructure, including parkland, to ensure the quality of life, health, and sustainability of Downtown neighbourhoods. If this cannot be achieved, it may be necessary for the City to reconsider the pace and amount of future development in the Downtown.

The rail corridor area is the last remaining site suitable for a major park (over 3 hectares) to support growth in the Downtown and serve as a city-wide asset.

Rail Deck Park will be the largest downtown park outside of the Don Valley. The proposed decking structure will support a fully functional park that, at full build-out, will comprise a total area of approximately 8.3 hectares or 20 acres, excluding the Metrolinx property at the corner of Front Street and Spadina Avenue. Inclusion of the Metrolinx-owned property increases the potential park area to approximately 8.8 hectares or 21 acres (refer to Figure 2 in the Comments section.)

A park of this scale is a city-wide asset that offers unique programming and design opportunities not available in smaller parks, such as a mix of recreation, natural areas, and cultural uses. It will unite surrounding visitor attractions (Rogers Centre, Ripley's Aquarium, Fort York) into a major destination district and enhance regional connectivity by integrating with the planned GO Regional Express Rail network.

Rail Deck Park also has the potential to strengthen Toronto's global image and competitive position by creating an iconic new public space that exemplifies livability, cultural vibrancy, social inclusiveness, environmental resiliency, and civic pride.

2. Design Concept and Costing Reflects Complexity of Building in the Rail Corridor

During the first stage of work, the City of Toronto engaged with Build Toronto to undertake a preliminary engineering and costing study for the decking structure to support Rail Deck Park. Reports and appendices from the study will be posted online on the City's project website at www.toronto.ca/raildeckpark prior to the November Executive Committee meeting.

The total preliminary cost estimate for the Rail Deck Park project (8.3 hectares; 20 acres) is $1.665 billion (2017 constant dollars) or approximately $83 million per acre. Project costs in this report represent order of magnitude (Class 4) estimates based on early-stage design concepts and the best information currently available for site conditions.

The cost estimate includes over $600 million in contingencies and allowances, as well as additional track-level work, reflecting the unique complexity and uncertainty of early-stage planning in the rail corridor. Cost estimates are subject to substantial refinement, including areas of potential savings, as the work proceeds through subsequent stages. Cost estimates do not include escalation or financing costs as detailed cash flows are not yet known.

Design and construction of the Rail Deck Park will be subject to multiple approvals and requirements for building in the rail corridor. The project will need to be coordinated with other major capital works. Cooperation with Metrolinx on aligned projects is critical to determining the ultimate scope, timelines, and cost of Rail Deck Park.

Implementation and construction of Rail Deck Park can be phased based on the availability of potential funding to be identified through financial strategy as well as various programming and design considerations.

A priority phase one option has been identified, extending from Spadina Avenue to the current location of the "Puente de Luez" pedestrian bridge, comprising an area of approximately 3.9 ha (9.5 acres) with a total cost of $872 million. The phase one area would create a large, contiguous park space to provide for a range of recreation and culture uses and support future expansion to the east and west (refer to Figure 7 of the Comments section).

3. Supported by a Growth-Focused Financial Strategy

Rail Deck Park is an investment to support future growth in Toronto. Therefore, the financial strategy will place an emphasis on incremental growth-related funding tools and revenues in such a manner that benefits all parkland priorities across the City, including Rail Deck Park.

Among these tools are Section 42 cash-in-lieu of parkland dedication ("Section 42 CIL") funds, which are collected from new development with the sole purpose of acquiring and developing parkland in the city. A separate report currently before Council ("Review of the City's Alternative Parkland Dedication Rate under Section 42 of the Planning Act") describes the ongoing challenges that the City faces in using these funds for acquisition purposes in high growth areas and presents options for updating Section 42 Cash-in-Lieu of parkland dedication policies to better align with current development intensities.

Changes to the calculation of Section 42 Cash-in-Lieu of parkland dedication would provide potentially significant funding capacity for Rail Deck Park and enhance funding available for parkland priorities elsewhere in the Downtown and across the city. Updating the Section 42 Cash-in-Lieu of parkland dedication policies is a first and important step towards advancing the financial strategy for Rail Deck Park.

The financial strategy is also evaluating contributions from other revenue tools including Section 37 funds, development charges, and area-specific "value uplift capture” tools. This report recommends that eligible components of the project be included in the City's development charges bylaw review currently underway, and that Council request amendments to the Development Charges Act, 1997 to maximize the availability of development charges to support the project.

Additional funding sources to be explored as the project proceeds include sponsorships, donations, and contributions from other orders of government.

A financial strategy will be brought forward for Council consideration after refining project timelines and cost estimates, advancing changes to the existing growth focused tools (Section 42 Cash-in-Lieu of parkland dedication and Development Charges), further analysis of other funding tools, discussions with government partners regarding joint funding opportunities, and consultation with land development and capital market experts.

4. Securing the Rail Corridor Properties for Public Benefit

Almost three quarters of new park projects in Toronto involve the acquisition or conveyance of lands owned by third parties. These transactions can be highly complex.

A comprehensive legal review of current ownership confirms that there are four primary property owners in the Rail Deck Park project area: Metrolinx, the City of Toronto, Canadian National Railway Company ("CN") and The Toronto Terminals Railway Company Limited ("TTR"). All lands in the rail corridor were originally acquired for public purposes rather than private development.

Representations have been made in public by private parties claiming "development rights" over the rail corridor. However, as of the date of this report, the owners registered on title for these properties are Canadian National Railway Company and The Toronto Terminals Railway Company Limited.

City staff will be available to provide information concerning real estate matters to Executive Committee and City Council as required.

5. Advancing Planning and Design for Rail Deck Park

The project can be advanced through a "stage gate" capital planning process, providing Council with specific decision points about advancing the project as scope, timelines and costs are clarified. If Council adopts the recommendations in this report it will be authorizing staff to undertake a stage two ("due diligence and concept development") work plan in 2018 and 2019.

The purpose of the proposed stage two work plan is to address various technical, financial and real estate matters that are required prior to undertaking an Environmental Assessment process, putting forward a detailed financial strategy, and advancing a more detailed level of design.

Coordination will be required with Metrolinx and engineering experts to address various technical issues related to capital construction in the rail corridor. Alignment and partnership between the City and Metrolinx is critical to the delivery of Rail Deck Park, the Spadina-Front GO station and other capital projects in the rail corridor.

During stage two, the project team will continue to engage with members of the public to develop early-stage programming and design considerations for the project. Among the actions described for stage two are (i) formation of a Stakeholder Advisory Group representing community members and stakeholder groups; (ii) design work required to inform and frame a future International Design Competition; (iii) development of a fundraising strategy and; (iv) evaluation of governance options for the long-term operation and maintenance of Rail Deck Park.

A report on stage two outcomes will be brought forward to Council in 2019.