1510 - 1538 Dupont Street

One Year Extension to the Term of

the First Mortgage (Ward 21 - Davenport)

The Corporate Services Committee recommends the adoption of the following report (November 3, 1998) from the Commissioner of Corporate Services:

Purpose:

To obtain approve for a one (1) year extension to the term of the First Mortgage registered in favour of City of Toronto Non-Profit Housing Corporation on the property known municipally as 1510-1538 Dupont Street which was sold to Arcadia Dupont Development Inc..

Financial Implications:

The interest payment due on December 8, 1998 in accordance with the existing First Mortgage calculated at the rate of eight percent. (8 percent) per annum and being in the amount of $37,800.00 will be received. The payment of the principal amount of $472,500.00 will be received by December 8, 1999.

Recommendations:

It is recommended that:

(1)the request for an extension of one (1) year to December 8, 1999, to the term of the First Mortgage be granted, with all other terms of the First Mortgage to remain the same;

(2)such extension be subject to the Board of Directors of City of Toronto Non-Profit Housing Corporation granting its approval; and

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

Background:

In 1991, the Royce/Dupont site, located on the northside of Dupont Street between Perth and Symington Avenues, was acquired for landbanking purposes and the development of social housing. However, with the cancellation of the Provincial Housing Program a social housing development could not proceed.

On October 28 and 29, 1996 Toronto City Council declared the property known municipally as 1510-1538 Dupont Street surplus to municipal requirements and authorized the property be listed on behalf of City of Toronto Non-Profit Housing Corporation ("Cityhome") with a major real estate broker for sale on the open market. Pursuant to Clause 5 of Report No. 18 of the Executive Committee, as amended and adopted by Toronto City Council on July 14, 1997, authority was given for Cityhome to sell 1510-1538 Dupont Street to Arcadia Dupont Development Inc. ("Arcadia") for a purchase price of $630,000.00. On December 8, 1997, title to the property was conveyed to Arcadia and a First Mortgage in the amount of $472,500.00 bearing interest at the rate of 8 percent. calculated and payable annually for a term of one year was registered in favour of Cityhome.

Comments:

An Affordable Home Ownership development by Arcadia Symington Avenue Inc. was successfully completed on the northerly portion of the Royce/Dupont Site. Arcadia, also being the successful purchaser of the remaining lands fronting on Dupont Street, was encouraged to proceed with a second phase of development on the basis of an "affordable" price structure. Two blocks of affordable freehold ownership townhomes (8 and 10 units) are to be constructed on the site. A sales program has commenced and currently, 9 of the 18 units have been sold to qualified purchasers.

Due to an unforseen length of time for the planning and processing of the Project, together with an unprecedented summer long strike in the construction industry, Arcadia has submitted a request to Cityhome for an extension to the term of the First Mortgage for a further one (1) year period to December 8, 1999, with all other terms of the mortgage to remain the same. Arcadia has confirmed that the interest payment of $37,800.00 will be paid on the due date, December 8, 1998.

As Cityhome holds the First Mortgage, the extension requires approval by its Board of Directors. At its meeting scheduled for November 23, 1998, the Board will be considering a staff report recommending that the request from Arcadia for a one (1) year extension to the term of the First Mortgage be granted. City Council approval is also required as the proceeds of the sale transaction are payable by Cityhome to the City to reimburse a City reserve account. The City funded the initial land acquisition.

Conclusion:

The request from Arcadia Dupont Development Inc. for an extension of one (1) year to December8, 1999, to the term of the First Mortgage with all other terms of the First Mortgage to remain the same, is reasonable and approval should be granted subject to the Board of Directors of City of Toronto Non-Profit Housing Corporation granting its approval.

Contact Name:

Carla Inglis; 392-7212; Fax: 392-1880; cinglis@city.toronto.on.ca.

(A copy of the maps, attached to the foregoing report, was forwarded to all Members of Council with the November 9, 1998, agenda of the Corporate Services Committee and a copy thereof is also on file in the office of the City Clerk.)