Assignment of 50 Percent Interest in a Lease of

Islington Subway Station Lands (Block W-38) at

the Southeast Corner of Islington Avenue and

Aberfoyle Crescent from the Mutual Life Assurance

Company of Canada to Oxford Properties Group Inc.,

(Ward 3 - Kingsway Humber)

The Corporate Services Committee recommends the adoption of the following report (July9, 1998) from the Commissioner of Corporate Services:

Purpose:

To obtain authority to consent to assignment of 50 per cent interest in a lease on the above referenced property as shown on the attached location map and site plan.

Funding Sources, Financial Implications and Impact Statement:

Not applicable.

Recommendations:

It is recommended that:

(1)authority be granted to consent to the assignment of 50 per cent interest in a lease from the Mutual Life Assurance Company of Canada to Oxford Properties Group Inc.;

(2)consent to the assignment be in a form satisfactory to the City Solicitor, an administrative fee of $300.00 be paid to the City of Toronto, and the preparation of all necessary documentation be at the expense of the assignor; and

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

Council Reference/Background/History:

The City of Toronto (formerly the Municipality of Metropolitan Toronto) is the owner of a parcel of land at the above location formerly having an area of 692.6 square metres (7,454 square feet) shown as Parts 1, 2, 3 and 4 on Plan 64R-8453 (WX-159). These lands were improved by a pedestrian entrance to Islington Subway Station and an electrical substation.

The former Metropolitan Council, by its adoption of Clause No. 21 of Report No. 1 of the Executive Committee on January 11, 1972, approved the long-term leasing of the air rights in these lands, commencing at a height of 23 feet above grade, to Shipp Corporation Limited at a rental of $6,000.00, per annum, for the first term of 33 years, effective August 1, 1973, with rights to renew for two like terms on the same terms and conditions except as to rent which is to be negotiated and failing agreement subject to arbitration.

Furthermore, the former Metropolitan Council, by its adoption of Clause No. 6 of Report No. 9 of The Parks, Recreation and Property Committee on June 24, 1980, approved the sale, in fee simple, of an area of 103.77 square metres (1,117 square feet) shown as Parts 3 and 4 on Plan 64R-8453 to Shipp Corporation and its then assignees. As a result, the remaining area leased to Shipp et.al. contains only 588.71 square metres (6,337 square feet) shown as Parts 1 and 2 on the said Plan, with the rental being $5,100.89, per annum.

In the early 1980's the leased lands and adjacent lands were improved with an office and commercial development incorporating the subway entrance and containing approximately 500,000 square feet of office space, then known as the Shipp Centre.

Pursuant to a number of assignments having been approved by the former Metropolitan Council, with the most recent one authorized on July 3, 1991, by the adoption of Clause No. 5 of Report No. 13 of The Parks, Recreation and Property Committee, these lands are currently leased by the City solely to The Mutual Life Assurance Company of Canada.

Comments and/or Discussion and/or Justification:

A letter has now been received from McCarthy Tetrault, Solicitors for The Mutual Life Assurance Company of Canada, advising that The Mutual Life Assurance Company of Canada is selling a 50percent interest in the Mutual Group Centre (formerly the Shipp Centre) to Oxford Properties Group Inc. and is therefore, requesting that consent to the assignment of 50percent of its interest in this Lease be approved.

McCarthy Tetrault also stated that pursuant to the Purchase Agreement, Oxford Properties Group Inc. is entitled to assign half of its 50 percent interest to a third party. However, Oxford has not confirmed an intention to do so, nor has it named a specific potential assignee. Accordingly, no request is before you other than for approval of the assignment of the 50 percent to Oxford Properties Group Inc.

Conclusion:

The lease is presently up-to-date and considered to be in good standing. I therefore have no objection to this request, conditional upon the assignee being bound by all of the terms and conditions therein (including the requirement to obtain the landlord's consent to any future assignments) and upon the current tenant, Mutual, continuing to be bound on the covenant.

Contact Name:

Mr. Tony Pittiglio, Manager of Property Services, (416)392-8155 , Fax No.: (416)392-4828, e-mail address: anthony_pittiglio@metrodesk.metrotor.on.ca (cs98134.wpd)

(A copy of the maps attached to the foregoing report was forwarded to all Members of Council with the July 20, 1998, meeting of the Corporate Services Committee, and a copy thereof is also on file in the office of the City Clerk.)