Item - 2021.EX28.12

The Executive Committee recommends that:

1. City Council authorize the City Manager, in consultation with the Chief Executive Officer, Toronto Transit Commission, to finalize negotiations and enter into and execute a Real Estate Protocol with Metrolinx and the Toronto Transit Commission for the Subways Program no later than February  28, 2022, or such other date as agreed to by the parties, based on the terms outlined in the report (November 23, 2021) from the Executive Director, Corporate Real Estate Management, and to enter into any such ancillary or related agreements, amendments, extensions and renewals as may be necessary, all on such terms and conditions as are satisfactory to the City Manager, in consultation with the Chief Executive Officer, Toronto Transit Commission, the Deputy City Manager, Infrastructure and Development Services, the Deputy City Manager, Corporate Services, and the Chief Financial Officer and Treasurer and any other relevant Official, in a form acceptable to the City Solicitor.

2. City Council authorize the City Solicitor to submit the necessary Bill(s) to amend Toronto Municipal Code Chapter 213, Real Property to include the Ontario Line, Scarborough Subway Extension, the Eglinton Crosstown West Extension and the Yonge North Subway Extension to the definition of "Transit Projects".

3. City Council delegate authority to each of the Deputy City Manager, Corporate Services, the Executive Director, Corporate Real Estate Management, and the Director, Transaction Services, severally, to approve the disposal to Metrolinx and the use by Metrolinx of certain City lands required by Metrolinx for the Subways Program (the "City Subway Lands"), including surface and subsurface public highway, for nominal consideration, provided that such disposal is:

a. at no net operating cost to the City, and/or the Toronto Transit Commission at the time of disposition, which would include, but not limited to, relocation costs, lost revenues or other out of pocket costs;

b. of lands are not required for municipal purposes (current and future) as already identified by the City in its ten year capital plan, as same may be amended from time to time; and

c. subject to existing City and Toronto Transit Commission infrastructure and assets and third party utility rights.

4. With respect to the City Subway Lands designated as Public Highway, City Council authorize the permanent closure of any City Subway Lands that are not otherwise required to continue to be designated as public highways and exempt these lands from the requirements of City of Toronto Municipal Code Chapter 162, Public Notice.

5. City Council authorize the Deputy City Manager, Corporate Services, the Executive Director, Corporate Real Estate Management, and the Director, Transaction Services, severally, to utilize the land valuation principles set out in Attachment 2 for the City Subway Lands required by Metrolinx, and, notwithstanding Item 2020.EX16.4, to utilize the same land valuation principles set out in Attachment 2 to the report (November 23, 2021) from the Executive Director, Corporate Real Estate Management for City lands required by Metrolinx for its GO Expansion Program.

6. City Council authorize severally each of the Managers in Transaction Services, Corporate Real Estate Management to approve and execute nominal sum licence agreements, Omnibus Permission to Enter Agreements or further amending agreements to Omnibus Permission to Enter Agreements with Metrolinx to authorize the use of any City-owned or managed property required by Metrolinx to perform due diligence work to facilitate the Subways Program or the GO Expansion Program, on the same terms and conditions as the original Omnibus Permission to Enter Agreement and such additional and/or amended terms and conditions as may be acceptable to the Director, Transaction Services and in a form satisfactory to the City Solicitor, and to waive the City’s administrative fee for each new or amending agreement pursuant to Chapter 441 of the Toronto Municipal Code.

7. City Council forward this report to the Toronto Transit Commission Board for information.

This report seeks City Council authority to execute a Real Estate Protocol (the "Protocol") for the Province of Ontario's priority transit projects (the "Subways Program") based on the terms outlined in this report.

The Subways Program delivered by Metrolinx represents a significant investment towards transit expansion within the City of Toronto. The Subways Program includes the Ontario Line, the Scarborough Subway Extension, the Eglinton Crosstown West Extension and the Yonge North Subway Extension.

To support the delivery of the Province's Subways Program on an accelerated basis, Metrolinx requires interests, both on a temporary and permanent basis, in certain City real property (the "City Subway Lands"). City, Toronto Transit Commission ("T.T.C.") and Metrolinx staff have been working closely to establish terms that govern the access, acquisition, ownership and disposition of real property between the parties. This report outlines those terms and also notes the processes to be followed by Metrolinx to facilitate City and T.T.C. review of City infrastructure to be built on City Subway Lands and other lands to be transferred to the City, and review of Subways Program infrastructure as it relates to City assets and infrastructure. The protocol includes a process for the parties to develop a Commissioning and Acceptance Protocol for City infrastructure.

Staff are recommending the Protocol be executed, in advance of the conclusion of negotiations currently underway with the Province on a Subways Program Term Sheet ("Term Sheet"), and ultimately the negotiation of a Subways Master Agreement ("Subways Master Agreement") between the City, T.T.C. and Metrolinx, as Metrolinx requires land for the Subways Program sooner than these documents can be negotiated and executed.

City staff anticipate reporting back to City Council in 2022 on the conclusion of the negotiation of the Term Sheet and to seek approval to negotiate and execute a Subways Master Agreement based on the terms of the Term Sheet. The Protocol will ultimately form part of the Subways Master Agreement. The Protocol provides that the Term Sheet being negotiated with the Province, if approved by Council, will take precedence over this Protocol should there be any inconsistencies.

In the absence of the Protocol, Metrolinx has and would continue to pursue City property through the Expropriations Act.