Item - 2019.GL6.24

The General Government and Licensing Committee recommends that:  

1.  City Council authorize the City of Toronto to enter into, and the General Manager, Parks, Forestry and Recreation, to execute on behalf of the City, a Development Management Agreement for the development of an approximately 25,000 square foot community recreation centre (the Recreation Centre) within a mixed-use project containing residential, commercial, and retail components (the Block 4 Project) at 261 Queens Quay East with Aqualuna Bayside Toronto Partnership, a general partnership of 2572942 Ontario Limited and Hines Bayside IV ULC, and with the partnership's nominee, Aqualuna Bayside Toronto Inc., substantially on the terms and conditions outlined in Attachment 3 to the report (June 6, 2019) from the General Manager, Parks, Forestry and Recreation, and on such other terms and conditions deemed appropriate by the General Manager, Parks, Forestry and Recreation, and the City Solicitor.

2.  City Council authorize the City of Toronto to enter into, and the General Manager, Parks, Forestry and Recreation, to execute on behalf of the City, a Construction Management Contract for the construction of the base/shell of the Recreation Centre and a Construction Management Contract for the construction of the fit-out of the Recreation Centre, both with Deltera Contracting Inc., substantially on the terms and conditions outlined in Attachment 4 to the report (June 6, 2019) from the General Manager, Parks, Forestry and Recreation, and on such other terms and conditions deemed appropriate by the General Manager, Parks, Forestry and Recreation, and the City Solicitor.

3.  City Council authorize the City of Toronto to enter into, and the General Manager, Parks, Forestry and Recreation, to execute a single contract for an estimated $600,000 from the project budget for full consulting services with Perkins+Will Canada Inc., the architect currently retained by the developer for the design of the Recreation Centre.

4.  City Council, conditional upon the execution of acceptable agreements in accordance with Recommendations 1, 2, and 3, authorize the flow of the following funding to Aqualuna Bayside Toronto Partnership, a general partnership of 2572942 Ontario Limited and Hines Bayside IV ULC, or its nominee, and to Deltera Contracting Inc., in accordance with the Development Management Agreement and the Construction Management Agreements, respectively, and to Perkins+Will Canada Inc. to the maximum fee specified in Recommendation 3 for the delivery of the Recreation Centre:

a.  up to $15.000 million from the 2019 Council Approved Waterfront Revitalization Initiative Capital Budget and future year commitments from the project "Precinct Implementation Projects," with funding of $1.500 million from Debt and $13.500 million from Development Charges (XR2114); and

b.  up to $7.000 million from the 2019 Council Approved Parks, Forestry and Recreation Capital Budget and future year commitments for the East Bayfront Community Centre sub-project in the Community Centre project, with funding of $6.300 million from Development Charges (XR2114) and $0.700 million from the South District Parkland Development Reserve Fund (XR2209) projects.

5.  City Council authorize the City of Toronto, as Vendor, to enter into an Amending Agreement of Purchase and Sale (Amended APS) with Aqualuna Bayside Toronto Inc., for and on behalf of Aqualuna Bayside Toronto Partnership, as Purchaser, to amend the Agreement of Purchase and Sale of Block 4, on the following terms and conditions and on such other terms and conditions deemed appropriate by the Deputy City Manager, Corporate Services, in consultation with the General Manager, Parks, Forestry and Recreation, and in a form satisfactory to the City Solicitor:

a.  the Amended Agreement of Purchase and Sale will not become effective unless and until the City confirms that the City is proceeding with the Recreation Centre, in accordance with the terms of the Development Management Agreement for the base/shell;

b.  Waterfront Toronto and the Purchaser shall have entered into an Amending Development Agreement in respect of the development of Block 4 which includes the Recreation Centre;

c.  the City will retain freehold ownership of the strata parcel of land designated for the Recreation Centre, as shown on an initial strata plan for closing;

d.  the parties will enter into a Shared Facilities Agreement in respect of the shared areas (Shared Areas) of the Block 4 Project and other operational matters in recognition of the integration of the Recreation Centre with the other components of the Block 4 Project, substantially on the terms and conditions outlined in Attachment 5 to the report (June 6, 2019) from the General Manager, Parks, Forestry and Recreation;

e.  the City's share of the Shared Facilities Budget for the operation and maintenance of the Shared Areas and various operational matters in respect of the overall Block 4 Project for the first year of operation of the Recreation Centre are estimated not to exceed $10,000 (the Shared Facilities Budget);

f.  on the closing of the Agreement of Purchase and Sale, the Recreation Centre lands will be subject to the Restrictions on Use and the Right of First Opportunity, substantially on the terms and conditions outlined in Attachment 6 to the report (June 6, 2019) from the General Manager, Parks, Forestry and Recreation;

g.  upon the completion of the construction of the Recreation Centre and the registration of the final strata plan for the Block 4 Project, the City, as transferor or transferee, will enter into such reconveyances of land and transfers of easements for nominal consideration, as necessary, to legally describe the lands for the Recreation Centre as City-owned freehold space, together with and subject to appurtenant and servient easement interests; and

h.  if the City has not proceeded with the fit-out of the Recreation Centre, in accordance with the terms of the Construction Management Agreement, and the City has failed to commence construction of the fit-out of the Recreation Centre within the two-year period following 50 percent occupancy of the residential condominium, the Purchaser will have the option to purchase the City's freehold strata lands designated for the Recreation Centre, together with the Recreation Centre base/shell as then-existing, for fair market value.

6.  City Council authorize the City of Toronto to enter into the Shared Facilities Agreement, substantially on the terms and conditions outlined in Attachment 5 to the report (June 6, 2019) from the General Manager, Parks, Forestry and Recreation, and on such other terms and conditions deemed appropriate by the General Manager, Parks, Forestry and Recreation, in consultation with the Deputy City Manager, Corporate Services, and in a form satisfactory to the City Solicitor.

7.  City Council authorize the General Manager, Parks, Forestry and Recreation, to approve the Shared Facilities Budget, to negotiate, administer, manage, execute, and deliver on behalf of the City the Shared Facilities Agreement, to designate any person or persons to represent the City on any shared facilities committee or subcommittee formed under the Shared Facilities Agreement, to provide any authorization, direction, or instructions to such designated person(s) in carrying out his/her role(s) as a City representative(s), to carry out all dispute resolution processes, and the General Manager, Parks, Forestry and Recreation, or his/her successor/designate(s), is authorized to provide any consents, approvals, waivers, notices, certificates of compliance, status certificates, and other documentation under the Shared Facilities Agreement, provided that the General Manager, Parks, Forestry and Recreation, may, at any time, refer consideration of such matters (including their content) to City Council for its determination and direction.

8.  City Council authorize the General Manager, Parks, Forestry and Recreation, to make all decisions, including any necessary elections, waivers, approvals, consents, and notices, on behalf of the City during the pre- and post-construction and construction phases of the Recreation Centre, in accordance with the project agreements outlined in Recommendations 1, 2, and 3 and any other agreements or documentation entered into as a result of those agreements.

9.  City Council authorize the City of Toronto to enter into, and the General Manager, Parks, Forestry and Recreation, to execute on behalf of the City, any Ancillary Agreements contemplated under or arising out of the Development Management Agreement, the Construction Management Agreement, the Shared Facilities Agreement, the Amended Agreement of Purchase and Sale, or the construction of the Recreation Centre, in consultation and in a form satisfactory to the City Solicitor.

This report requests City Council authority to enter into agreements for the delivery of a 25,000 square foot community recreation centre (the Recreation Centre) located within a new mixed-use building in Block 4 on Plan 66M2542 (Block 4) in the East Bayfront Precinct located at 261 Queens Quay East (see Attachment 1). The project is to be delivered by Aqualuna Bayside Toronto Partnership (development manager/developer) and Deltera Contracting Inc. (the constructor). The Aqualuna Bayside Toronto Partnership is between a Hines entity (Hines) and its residential partner, a Tridel entity (Tridel).

This report also seeks authority to transfer cash flow funding of up to $22.0 million from the 2019 Council Approved Capital Budgets and future year commitments for Waterfront Revitalization Initiative and Parks, Forestry and Recreation, to the development manager, the constructor, and the architect to design and deliver both the base/shell and fit-out of the Recreation Centre.

The major terms for delivery of the Recreation Centre and associated agreements are presented in this report and form part of the approval being sought by Council.

Lastly, the report seeks approval for the General Manager, Parks, Forestry and Recreation, to execute the contract with the design architects for the Recreation Centre in order for Parks, Forestry and Recreation to manage the design specification process directly.   

This report has been prepared by Parks, Forestry and Recreation, with input from the Waterfront Secretariat, Real Estate Services, Purchasing and Materials Management, Corporate Finance, and in consultation with Legal Services.