Lease of Space at 150 Eglinton Avenue East

Social Services Division, Community and

Neighbourhood Services Department

(Ward No. 22 - North Toronto)

The Corporate Services Committee recommends the adoption of the following report (May 7, 1998) from the Commissioner of Corporate Services:

Purpose:

To enter into a rental agreement of the subject property with 150 Eglinton Avenue East Holdings Limited, as per the attached location and site maps.

Funding Sources, Financial Implications and Impact Statement:

Funds to cover the expenditures identified in this report are part of the 1998 Social Services Operating Budget estimates. The Commissioner of Finance, in accordance with Provincial regulations, has certified that financing for the expenditure in the amount of $510,000.00 is within the Updated Financial Debt and Obligation Limit.

As a result of the renewal, the estimate reduction in annual basic net rent payable is approximately $175,424.00.

Recommendations:

 It is recommended that:

(1)financing in the amount of $510,000.00 be approved;

(2)the City of Toronto enter into a lease with 150 Eglinton Avenue East Holdings Limited on the terms and conditions outlined in this report, and in a form acceptable to the City Solicitor; and

(3)the appropriate City officials be authorized and directed to take the necessary action to give effect thereto.

Council Reference/Background/History:

Metropolitan Council, on May 8, 1991, by the adoption of Clause No 16 of Report No. 17 of The Management Committee, approved the sublease of 9th and 10th floors of 150 Eglinton Avenue East, for a term commencing October 1, 1991, and expiring October 30, 1998. The current basic rent is $129.17 per square meter ($12.00 per square foot) net, per annum.

Comments and/or Discussion and/or Justification:

A Space Rationalization Team is currently dealing with various buildings brought into amalgamation and is in the process of identifying if there is any space available in these facilities that can accommodate various City of Toronto departments that are currently occupying leased premises as tenants. As a result, a canvass has been conducted based on the criteria and catchment area established by the Community and Neighbourhood Services Department. The survey revealed no suitable City-owned space to accommodate this operation at this time.

By a letter dated February 6, 1998, the Community and Neighbourhood Services Department requested that the lease be renewed for a one-year term. Negotiations were conducted with Mr. Glenn Williams, Executive Vice President, Tillyard & Partners, Inc., 150 Eglinton Avenue East, Suite 304, Toronto, Ontario, M4P 1E8, property management for the Landlord, and agreement has been reached on the following terms:

(1)Leased Premises:

9th and 10th Floors of the building municipally known as 150 Eglinton Avenue East, City of Toronto.

(2)Lease Term:

One (1) year from the Commencement Date, with an option to renew for a further one year term at market rent upon the Tenant giving six months= prior notice.

(3)Commencement Date:

October 31, 1998. The Landlord shall, at its expense, be responsible to terminate the existing headlease as of the Commencement Date, if necessary.

(4)Basic Rentable Rate:

 $43.06 per square meter ($4.00 per square foot), net, per annum.

 (5)Rentable Area:

Approximately 2,265.74 square meters (24,389 square feet), subject to an upward and downward adjustment as determined by an architect, at the Landlord=s expense. The Landlord shall, at its expenses, submit to the Tenant an AArchitect=s Certificate of Area@ prior to the execution of the lease. The rentable area shall be measured according to accepted methods as stated by the Building Owners and Managers Association International (BOMA).

(6)The Landlord shall continue to provide the existing 22 parking spaces (of which 6 spaces are underground and 16 spaces are surface) for the use by the Tenant at the rates of $60.00 per surface space per month and $90.00 per underground space per month plus G.S.T. for the term of the lease.

 (7)Additional rent in respect of the Tenant=s proportion of realty taxes, utilities and operating costs is payable in addition to Basic Rent. The estimated 1998 taxes and operating costs are $14.46 per square foot, per annum, excluding any business and/or realty taxes adjustments.

 (8)The Tenant will not pay any commission associated with this transaction.

 (9)All other terms and conditions shall remain the same or similar to the existing sublease dated July 16, 1991, save and except any provision of leasehold improvements for the Tenant.

 (10)Upon expiry or early termination, the Tenant shall not be responsible for the cost of and/or the removal of the leasehold improvement.

 (11)The lease agreement may be in the Landlord=s standard form which shall be amended to reflect the terms and conditions set out in this proposal, but notwithstanding any clause contained or not contained in this proposal, the lease agreement must be in form and content acceptable to the City Solicitor.

Conclusions:

In my opinion, these terms and conditions are fair and reasonable, and I have been advised that they are acceptable to the Community and Neighbourhood Services Department. Another search for suitable City-owned space will be conducted prior to the expiry of the renewal term.

Contact Name:

Mr. Tony Pittiglio, Manager of Property Services; Telephone No.: (416) 392-8155; Fax No.: (416) 392-4828; E-mail address: anthony_pittiglio@metrodesk.metrotor.on.ca.

(A copy of the site maps attached to the foregoing report were forwarded to all Members of Council with the May 25, 1998, agenda of the Corporate Services Committee, and a copy thereof is also on file in the office of the City Clerk.)