Item - 2018.GM26.14

The Government Management Committee recommends that:

1.  City Council recognise that significant rent arrears owed to Real Estate Services by Harbourfront Centre (HC) for 318 Queens Quay West are unrecoverable and authorize the Treasurer to write off $964,335.37.

2.  City Council approve payment of a one-time grant to Harbourfront Centre in the amount of approximately $427,286 (such amount to be calculated to be equivalent to the property taxes, interest, penalty and fees that have or will accumulate on the accounts pending the finalization of the process, net of the eligible and late charitable rebate applications), with such grant amount to be funded from the City's 2018 Non-program Tax Deficiency Account, subject to the following conditions:

a.  City Council authorize the acceptance of Harbourfront Centre's late applications for the charitable rebate program for 2014 and 2015, so that the approved rebate amounts can be applied to reduce the outstanding taxes and associated grant required;

b.  Harbourfront Centre be required to apply for the charitable rebate for 2017 and prior years, to allow the City to determine the grant issued above, net of the rebate;

c.  the one-time grant amount be applied directly to the property tax account to offset property taxes payable;

d.  Harbourfront Centre agree to pay in full property taxes for 2018 and future years as a condition of ongoing operating grants; and

e.  Harbourfront Centre be required, as a condition of future City support, to submit by the fourth quarter 2018 to the City of Toronto, Economic Development and Culture Division, a business plan demonstrating long term financial viability including an ability to pay all current year and future property taxes and debts to the City.

3.  City Council deem the grant referred to in Recommendation 2 above to be in the interests of the City.

Harbourfront Centre is a major cultural facility in Toronto, located on a large site on the city's central waterfront. It holds a 99 year lease from the City of Toronto on property formerly owned by the federal government. Harbourfront Centre (HC) requires the support of all three orders of government for its programming and operations. In 2017, the City struck a Harbourfront Centre Working Group (HCWG) to determine how to better support the operations and future viability of Harbourfront Centre, to streamline its agreements and funding arrangements with the City, and to coordinate intergovernmental approaches to public funding.

The HCWG has worked with Harbourfront Centre to resolve a variety of issues, including outstanding payments owed to the City of Toronto, in order to strengthen HC's financial position and operational sustainability. This report recommends that the City relieve Harbourfront Centre of approximately $1.392 million in debt owed to the City of Toronto, accumulated in part due to reassessment of the taxability of its leased parking lot properties with no offsetting increases in public funding. It is recommended that this relief be provided through a combination of a write-off of rent arrears and a proposal to Council of a one-time grant to HC to address unpaid property taxes. It further recommends that HC submit a business plan to the General Manager of Economic Development and Culture demonstrating long-term financial viability including an ability to pay all current year and future property taxes and debts to the City. Economic Development and Culture will assume the role of the City's main liaison with Harbourfront Centre and will also work with funders from the other orders of government.