Item - 2021.EX27.6

The Executive Committee recommends that:

1.  City Council request the City Manager to report to the Executive Committee in the first quarter of 2022 with the results of the public consultation and stakeholder engagement process on a next phase of waterfront revitalization and a renewed waterfront vision that sets a path forward for what Toronto will achieve along its 43 kilometre waterfront, from Etobicoke to Scarborough, including anticipated economic development, Reconciliation, social, equity and environmental outcomes.

2.  City Council request the Deputy City Manager, Infrastructure and Development Services to report to the Executive Committee in the second quarter of 2022 with an update and recommendations related to business and implementation planning for the Villiers Island Precinct and the Port Lands.

3.  City Council approve the amendment of the Consent to raise revenue pursuant to subsection 4(7) of the Toronto Waterfront Revitalization Corporation Act, substantially on the terms and conditions contained in the draft Amendment to Consent in Attachment 1 to the report (October 13, 2021) from the Deputy City Manager, Infrastructure and Development Services and, provided that the Provincial Government and Federal Government also agree to such amendment, City Council authorize the Deputy City Manager, Infrastructure and Development Services to execute such Consent with such modifications as the Deputy City Manager, Infrastructure and Development Services shall deem necessary or desirable or shall agree to and in a form approved by the City Solicitor, and to deliver such Consent to Waterfront Toronto.

4.  City Council authorize the Deputy City Manager, Infrastructure and Development Services and the Deputy City Manager, Community and Social Services to enter into a Memorandum of Understanding with Waterfront Toronto on terms and conditions satisfactory to the Director, Strategic Partnerships, City Manager's Office, that address the City's involvement in Waterfront Toronto's donations and sponsorships program, based on the major terms outlined in Attachment 2 to the report (October 13, 2021) from the Deputy City Manager, Infrastructure and Development Services, and in a form satisfactory to the City Solicitor.

5.  City Council direct that the Memorandum of Understanding include terms and conditions to ensure that Waterfront Toronto's donations and sponsorships program aligns with the City's Donations to the City of Toronto for Community Benefits Policy, Sponsorship Policy and Individual and Corporate Naming Rights Policy, with respect to donations and sponsorships Waterfront Toronto solicits, receives and spends that are to be incorporated into City infrastructure or assets including:

a. conferring on Waterfront Toronto the authority and responsibilities given to the Division Heads under all three policies; and

b. adding to the Donations to the City of Toronto Community Benefits Policy that Waterfront Toronto, instead of Council, has authority to accept and spend donations equalling or exceeding $50,000.

6.  City Council authorize the Deputy City Manager, Infrastructure and Development Services to execute, on behalf of the City, agreements between the City and Waterfront Toronto for the implementation and delivery of projects to be funded and delivered pursuant to Waterfront Toronto's donations and sponsorships program, on terms and conditions satisfactory to the Deputy City Manager, Infrastructure and Development Services, in consultation with relevant City divisions and the Director, Strategic Partnerships, City Manager’s Office, and in a form satisfactory to the City Solicitor.

7.  City Council amend the Authority to Borrow Money and Encumber Assets for Projects in the Designated Waterfront Area and for Bridge Financing pursuant to Subsections 4(5) and 4(6) of the Toronto Waterfront Revitalization Act, substantially on the terms and conditions contained in the draft Amendment to Consent in Attachment 3 to the report (October 13, 2021) from the Deputy City Manager, Infrastructure and Development Services and, provided that the Provincial Government and Federal Government also agree to such amendment, City Council authorize the Deputy City Manager, Infrastructure and Development Services to execute such Consent with such modifications as Deputy City Manager, Infrastructure and Development Services shall deem necessary or desirable or shall agree to and in a form approved by the City Solicitor, and to deliver such Consent to Waterfront Toronto.

This report provides a general update on Waterfront Revitalization, an outlook on the next phase and requests Council direction on certain transactional matters related to ongoing revitalization including:

-A public consultation and stakeholder engagement process that will result in a renewed vision for Toronto's waterfront, setting the stage for a further phase that will build on 20+ years of tri-government-led waterfront revitalization success;
-A summary of the findings of the 2020 Waterfront Strategic Review Update, a follow-up to a review undertaken in 2015;
-Two Consent requests that have been made by Waterfront Toronto;
-An update with next steps with respect to implementation and planning work that is in progress for the Villiers Island Precinct and the Port Lands; and
-City Council direction for staff to review the real estate development responsibilities of Waterfront Toronto and CreateTO to ensure that there is alignment, including the ability to leverage the skills of both organizations to enable effective and efficient project delivery in the Port Lands.
 

This report recommends that staff report back to the Executive Committee twice in 2022:

-Once in Q1 2022, with the results of public consultation and stakeholder engagement on a next phase of waterfront revitalization, including a renewed waterfront vision; and
-Once in Q2 2022, with an update on business and implementation planning work for the Villiers Island Precinct and the Port Lands.
 

Waterfront revitalization, launched in October 2000, has been an overwhelming success. Working together, the three orders of government, through Waterfront Toronto, have delivered solid social, economic, public realm and environmental benefits. To-date, $2.75 billion in tri-government investments in the waterfront are estimated to have created 20,785 years of construction employment, 5,000 permanent jobs, added $2.7 billion of economic activity into the Canadian economy, and generated almost $1.1 billion in tax revenues (largely Provincial and Federal income taxes). This has also triggered over $13.2 billion of private sector investment in the waterfront. These benefits have resulted primarily through the transformation of the West Don Lands and East Bayfront precincts through flood protection, remediation, land servicing, public realm investments, and private sector development investments. The current focus of revitalization is the ongoing Port Lands transformation, beginning with Port Lands Flood Protection.

Waterfront revitalization outcomes are local, provincial and national in significance, and have been driven by a unique tri-government partnership and governance structure focussed on outcomes. Through upfront investment, government partners are reconnecting the city with its waterfront, building complete communities and streets, raising design standards through an environmental lens, providing new homes and affordable housing, jobs, and open spaces adjacent to downtown Toronto. Toronto's waterfront is an important asset in attracting and retaining talented workers in critical "innovation" industries.

A Further Phase of Waterfront Revitalization

The task of revitalizing the city's waterfront is far from complete. City staff have started preliminary discussions with their counterparts at the Provincial and Federal governments, Waterfront Toronto and other organizations that touch the waterfront about a further phase of waterfront revitalization and the required investments to support this work. Discussions have just commenced and will continue into 2022. Working with waterfront stakeholders, staff have developed a list of shared waterfront outcomes and priorities, as depicted in Figure 1. The inner circle identifies potential waterfront outcomes while the outer circle identifies categories of potential waterfront priorities/projects.

Figure 1: Shared Waterfront Outcomes and Priorities

(Note:  To view Figure 1: Shared Waterfront Outcomes and Priorities, please refer to the Summary section of the report located under Background Information.) 

Our Toronto Waterfront: Gateway to the New Canada, the original overarching vision for Toronto's waterfront, was published by the Toronto Waterfront Revitalization Task Force, led by Robert Fung, in 2000. This vision set in motion major planning approvals, including the Central Waterfront Secondary Plan and numerous precinct plans, as well as an extensive pipeline of development and infrastructure projects. Although, the Task Force vision is still relevant two decades later, the opportunity has emerged to renew it to reflect current priorities, including pressing factors such as the need to advance Reconciliation, recover from the COVID-19 pandemic, address the climate crisis, provide affordable housing and make progress on social equity issues.

Led by the City Manager and the City's Senior Leadership Team, City staff will be working with the City's waterfront partners, including Waterfront Toronto, CreateTO and the Provincial and Federal governments, to undertake a public consultation and stakeholder engagement process from November 2021 to January 2022 that will articulate a renewed unifying and multi-generational vision for the waterfront. The creation of the vision, which staff have called "Audacity," will be informed by a panel of expert volunteers, described below. This panel will meet three to four times in the coming months and will assist staff with framing the questions to be considered by members of the public and stakeholders through the consultation and engagement process. It is anticipated that the resulting renewed vision will be future-focused and will highlight the importance of the waterfront in driving the local, regional and national economy – in attracting talent and driving inclusion – and will be a key input for City, Provincial and Federal decision-makers in addressing shared public policy outcomes. As described above, staff will report to the Executive Committee in Q1 2022 with the results of the engagement process which will inform a renewed vision for the waterfront.

The public consultation and stakeholder engagement process described above will consider the full 43 km of Toronto's wider waterfront, from Etobicoke in the west to Scarborough in the east. This would be a change from the first phase of waterfront revitalization which has been focused in the 10 km central waterfront -- defined as the Designated Waterfront Area by the three governments; two parkland development projects were undertaken in Port Union and Mimico in the early years of the waterfront revitalization initiative, however, these were an exception. City staff are keen to engage the public and stakeholders to develop an expanded vision for waterfront revitalization in the western and eastern waterfronts, with a focus on opportunities to advance parks, natural heritage, shoreline resilience and active transportation projects. Staff will report further on this in Q1 2022; including the potential for tri-government participation and on roles and responsibilities in implementation.

2020 Waterfront Strategic Review Update

As part of the 2020 Waterfront Strategic Review Update, the City, with the assistance of its Provincial and Federal partners, engaged KPMG LLP to undertake a Background Study on the Waterfront Revitalization Initiative. This background study is appended to this report as Attachment 8. Among other conclusions, KPMG found that Toronto’s waterfront revitalization effort continues to be a nationally significant initiative that requires a tri-government approach and governance. In addition, KPMG found that Waterfront Toronto is achieving the three governments’ priorities, with significant progress made over the 2015 to 2020 scope of this review.

KPMG identified two important issues related to Waterfront Toronto's future. First, Waterfront Toronto is approaching fiscal uncertainty; the corporation currently receives funding from the three orders of government under the Port Lands Flood Protection Project contribution agreement which is expected to be fully drawn by the end of 2024. While Waterfront Toronto has land sale revenues to pursue the Quayside Project, additional tri-government investments will be required to advance other revitalization work. Second, the Toronto Waterfront Revitalization Corporation Act, 2002 includes provisions for the wind up of the corporation in 2028. If Waterfront Toronto is to continue beyond 2028, the government partners will need to work together to establish a plan to address Waterfront Toronto's future funding situation and legislative horizon.

These are important issues that the government partners are discussing; the issues will have to be addressed in the near term as the governments consider a further tri-government phase of waterfront revitalization; staff will report further on these issues as part of the report expected in Q1 2022.

Waterfront Toronto Consent Requests

Waterfront Toronto, through its Board of Directors, has requested that the government partners update its Revenue Consent so that it is consistent with the Qualified Donee status granted to the Corporation by Canada Revenue Agency under section 149(1) of the Income Tax Act. Qualified Donee status allows Waterfront Toronto to accept and issue tax receipts for charitable donations. Draft revised Revenue Consent language is appended to this report as Attachment 1.  Both the Province of Ontario and Government of Canada have secured Treasury Board approvals for this Revenue Consent amendment and language.

Consistent with Waterfront Toronto’s Fundraising Action Plan, as outlined in its Board-approved Rolling Five Year Strategic Plan (2020/21 – 2024/25), major terms for a Memorandum of Understanding that will govern City involvement and decision-making in relation to Waterfront Toronto's fundraising efforts have been drafted; these major terms are appended as Attachment 2. City staff will be involved in the process from project inception to implementation, with representation in the initiative through a City/Waterfront Toronto Fundraising Liaison Committee.

In addition, Waterfront Toronto has also requested that the City, Provincial and Federal governments approve an increase to the organization's borrowing limit and an extension to the term of the Authority to Borrow Money and Encumber Assets for Projects in the Designated Waterfront Area and for Bridge Financing ("Borrowing Consent"), originally approved by the three government partners in 2015. Waterfront Toronto has requested a revised limit of $90 million, extended to May 2028, as long as the organization continues to have sufficient collateral to support its required borrowing. Draft revised Consent language is appended to this report as Attachment 3. A higher credit facility would help bridge the gap between the time that expenditures are required to prepare lands for development and the time when revenues are realised through land sales and related sources. This issue is most relevant with respect to the five properties that are owned by Waterfront Toronto in Quayside. A term extension to the term of the Borrowing Consent would create alignment with the Toronto Waterfront Revitalization Corporation Act (which includes a provision for Waterfront Toronto to operate until May 15, 2028) and with Waterfront Toronto's post-construction obligations (e.g. monitoring and warranties) for the Port Lands Flood Protection project and Quayside. Waterfront Toronto's borrowing is, and will continue to be, closely monitored through regular reporting to the three orders of government.

Port Lands and Villiers Island Precinct Revitalization

This is the first report seeking Council direction on the development of the Port Lands since adoption of the Port Lands Planning Framework, Port Lands Official Plan Modification and Villiers Island Precinct Plan in December 2017.

The Port Lands, located to the southeast of Downtown Toronto, is the largest undeveloped area remaining in Toronto. It represents an area of roughly 325 hectares (800 acres), with approximately 200 hectares (500 acres) in CreateTO ownership. The Port Lands are currently being transformed by the massive Port Lands Flood Protection project. The centrepiece of this project is the rerouting of the mouth of the Don River to a newly formed and naturalized waterway, located to the south of the Keating Channel. The $1.25 billion project, being implemented by Waterfront Toronto and supported equally by the three orders of government, has been underway since 2017 and is currently on budget and on time for completion in 2024. Once completed, the flood protected areas in the Port Lands will be converted to naturalized lands, park and recreation areas, intensified employment and port districts, and mixed use development, allowing for new neighbourhoods to grow in parts of this area for the first time.

This report describes the areas of focus and the approvals process for the next stage of work in the Port Lands. As we look forward to the anticipated completion of the flood protection project in 2024 and with the Council adoption of the Port Lands Planning Framework in 2017, the table is now set for the next stage of revitalization. The work plan starts this year and will carry through completion of Flood Protection. It focuses on advancing necessary planning studies and approvals, resolving all remaining Ontario Land Tribunal appeals, advancing parks and infrastructure plans and creating development plans for publicly-owned lands.

The first precinct-level opportunity for mixed used development in the Port Lands is Villiers Island, a roughly 20 hectare (50 acre) area that will be become available for planned development following completion of the flood protection project. Development will be guided by the Council-adopted Villiers Island Precinct Plan, which identifies a range of permissible residential, commercial, catalytic and community uses. Given the precinct's unique profile, strong market attributes and high proportion of public ownership, the development program for Villiers Island will set an ambitious standard for complete community building through significant affordable housing, new transit, climate positive design and high-quality public realm. CreateTO is the majority landowner in Villiers Island, with additional properties owned by PortsToronto, Waterfront Toronto and private owners. It is anticipated that mixed use construction could begin in Villiers Island as early as 2025/26, with first residential occupancy targeted for 2027/28.

Beyond Villiers Island, other projects are planned or currently underway throughout the Port Lands. These include the continued build-out of Media City as one of Canada’s largest film production hubs, a new film studio in Turning Basin District, new employment uses in the South Port district, and various park and public realm projects. Over the long-term, additional mixed use development will extend into precincts adjacent to Villiers Island, including Keating Channel to the north, Polson Quay and South River to the south and McCleary District to the east. Early stage planning is currently underway for future growth in these areas. These initiatives are described in further detail in the report.

This report describes an approvals process for City Council to guide implementation of the work plan for Villiers Island and the Port Lands. For Villiers Island, a comprehensive Business and Implementation Plan will be prepared that describes the overall development concept and phasing plan, program requirements such as affordable housing and climate positive design, funding and financing, infrastructure costs and various asset management considerations (e.g., future ownership of public lands). In addition, the zoning by-law will be updated to align with the Villiers Island Precinct Plan in order to facilitate the accelerated development of the precinct. Pending Council adoption of the recommendations in this report, staff anticipate reporting further on this by mid-2022.

Finally, this report describes the roles and responsibilities of Waterfront Toronto, CreateTO and the City for the immediate next steps on Villiers Island. The need for greater clarity on roles and responsibilities was flagged in the 2015 Waterfront Strategic Review, the Provincial Auditor General 2018 value-for-money audit of Waterfront Toronto and again in the 2020 Waterfront Strategic Review Update. City staff are of the view that the best approach for the Port Lands, starting with Villiers Island, will be a partnership approach that involves both Waterfront Toronto and CreateTO, working in close collaboration with City Divisions. A staff governance structure has been established that will leverage the strengths of each partner, prevent duplication of effort and expedite the delivery of work plans. Staff will comment in further detail on this in the report that is anticipated for Q2 2022.