Pre-Servicing Agreement:

Governor's Bridge Subdivision

The East York Community Council recommends that:

(1)the following report (October28, 1998) from the City Solicitor, EastYork Office, be adopted; and

(2)the following communication (November 9, 1998) from Mr. Donald Lake, East York, be received.

Purpose:

This report seeks permission to enter into a pre-servicing agreement with the owner of the Governor'sBridge Subdivision located at Bayview Avenue, south of Nesbitt Drive.

Funding Sources:

The owner has agreed to reimburse the City for all costs associated with this application.

Recommendations:

That the City enter into a pre-servicing agreement, substantially in the form set out in Schedule "A" of this report, with the owner of the Governor's Bridge Subdivision.

Background:

This property received planning approvals in early 1997. The plan of subdivision was the subject of an Ontario Municipal Board hearing in December, 1997. The Ontario Municipal Board approved the plan of subdivision permitting the construction of 64 single family homes. One of the conditions of approval requires the entering into of a financially secured subdivision agreement.

Comments:

The developer has requested the municipality's permission to begin site preparation, prior to the completion of the subdivision agreement. In this case this will include:

-area grading;

-preparing the lands;

-stripping topsoil;

-cutting and filling;

-constructing bridge piles and reinforced earth walls.

Pre-servicing is a common practice in the development of subdivisions. Normally the municipality enters into a "pre-servicing" agreement with the developer in order to protect municipal interests and to restore the lands in the event the development does not proceed.

Conclusions:

Council, through the recommendations of the East York Community Council should give authority for the municipality to enter into a pre-servicing with the owner of the Governor's Bridge Subdivision.

Contact Name:

Quinto M. Annibale

Loopstra, Nixon & McLeish

City Solicitors - East York Office

Phone: 416-746-4710

Fax: 416-746-8319

e-mail: qannibale@loonix.com

The East York Community Council also submits the following Pre-Servicing Agreement between Jasamax Holdings Ltd. and the City of Toronto:

Pre-servicing Agreement

This Agreement Made This Day Of , 1998.

Between:

Jasamax Holdings Ltd.,

(hereinafter called the "Developer")

Of The First Part;

- and -

City Of Toronto,

(hereinafter called the "City")

Of The Second Part.

Whereas the Developer warrants and represents that it is the Owner of the lands and premises described in Schedule "A" attached hereto (hereinafter called the "Lands");

And Whereas the Developer has applied to the appropriate governmental authorities and agencies for approval of a registered plan of subdivision with respect to the Lands pursuant to the provisions of the Planning Act, a copy of the said proposed plan of subdivision being attached hereto as Schedule"B" (hereinafter called the "Draft Plan");

And Whereas the Owner wishes to proceed to service the Lands prior to the registration of the Plan of Subdivision.

Now Therefore This Agreement Witnesseth that in consideration of the covenants herein contained and other good and valuable consideration and the sum of One Dollar ($1.00) of lawful money of Canada now paid by each of the parties hereto to each of the other parties hereto (receipt whereof is hereby acknowledged) the parties hereto hereby covenant, promise and agree with each other as follows:

(1)In this Agreement:

(1)"Services" means all services which may be required to fully service the Lands and any lands adjacent thereto in conjunction with the Lands, whether municipal services or services of a nature or kind that are not deemed to be municipal services, and without limiting the generality of the foregoing, shall include roads, curbs, gutters, sidewalks, storm sewers, sanitary sewers, private sewage disposal systems, water system, drainage works, swales, grading, landscaping, sodding, seeding, erosion control works, street lighting, fencing, signage, and all services, works, facilities and matters incidental thereto or in connection therewith, or necessary to complete any and all of the foregoing; and

(ii)"Plans and Specifications" means all plans and specifications for Services approved by the City Engineers and in accordance with the City "Design Criteria and Standard Detail Drawings", as adopted from time to time by the Council for the City.

(2)The Developer shall be permitted to area grade the Lands, prepare the Lands, instal sedimentation control fencing, clear and grub the Lands, strip topsoil, cut and fill (subject to all other approvals being obtained) and construct the bridge piles and reinforced earth walls (hereinafter deemed to be the "Services") provided that all of the following conditions have been complied with by the Developer at the Developer's sole cost and expense:

(a)The Developer has submitted and the City Engineer has accepted the Plans and Specifications for the Services to be constructed pursuant to this Agreement.

(b)All outstanding accounts for consulting services, including legal services, outstanding disbursements and related expenses incurred by the City in connection with the development of the Lands have been paid by the Developer and are current.

(c)The approval of all governmental agencies, including but not limited to, the Ministry of the Environment and Energy, the Ministry of Natural Resources, the Toronto Region Conservation Authority, where required for the construction of the Services, has been obtained.

(d)The City Engineer has been provided with copies of all construction contracts entered into by the Developer for the installation or construction of Services pursuant to this Agreement and the City Engineer has been provided with all construction grade sheets and reports on testing and all notices issued.

(e)The Developer has notified all agencies providing emergency services in the City, all public utilities and all adjacent landowners, of its intention to pre-service the Lands and the Developer has provided copies of all such notifications to the City.

(f)No topsoil is removed or permitted to be removed from the Lands and all topsoil is stockpiled on the Lands.

The Developer acknowledges and agrees that notwithstanding anything else in this Agreement, no pre-servicing shall be permitted with respect to any Services, where required, which are external to the Lands unless the prior written consent of the CityEngineer is first obtained. Subject to the foregoing, all such external Services shall be constructed in accordance with a Subdivision Agreement, and only after the Subdivision Agreement has been registered on title to the Lands and all securities required pursuant thereto have been posted with the City.

(3)The Owner agrees that all Services shall be constructed in accordance with the accepted Plans and Specifications and in compliance with the Subdivision Agreement.

(4)The Developer agrees to allow the City, its employees, servants, agents and consultants to enter the Lands at all reasonable times and for all reasonable purposes, including and without limiting the generality of the foregoing, for inspecting any of the Services and to correct any problems with the Services, and any drainage problems with the Lands, including any problems which require corrective erosion and siltation control measures, and to correct or eliminate any other nuisance such as dust, garbage, debris or excavations and the cost incurred by the City in so doing shall be paid by the Developer.

(5)The Developer agrees to reimburse the City for all its costs incurred in preparing and registering this Agreement on title and in carrying out any of the provisions hereof.

(6)Upon execution of this Agreement, the Developer shall post security in the amount set out in Schedule "C" to this Agreement which amount shall secure all of the Developer's obligations pursuant to this Agreement. If in the opinion of the City at any time and from time to time, such amounts are insufficient, such amounts may be increased, and the Developer shall pay such additional sum as may be required as a result of such increase. In determining the sufficiency of the amount, regard need not be placed solely to the particulars outlined in Schedule "C" attached hereto, but the total cost of satisfying all of the obligations of the Developer pursuant to any of the provisions of this Agreement. The City may use any portion, or all of the security to satisfy any obligation set out in the Agreement regardless of the estimates set out in Schedule "C". The City may accept an irrevocable letter of credit drawn on a chartered bank of Canada acceptable to the City in lieu of such total cash amounts referred to in Schedule "C" attached hereto and such additional amounts as determined by the City, provided such letter of credit shall be in a form acceptable to the City Solicitor and contain the following provisions:

(a)the letter of credit shall be security for any obligations of the Developer pursuant to the provisions of this Agreement, without any limitations whatsoever;

(b)drawings on the letter of credit shall be permitted upon presentation of a letter from the City to the bank claiming default by the Developer under the terms of this Agreement, and such default shall not be limited to the actions of the Developer;

(c)partial drawings shall be permitted;

(d)if the City has not determined the extent of the default or the amount required to rectify the default or compensate the City or third parties as a result thereof, the City may draw on the full amount of the Letter of Credit without any requirement to justify the amount of the draw;

(e)if the letter of credit is not renewed at least thirty (30) days prior to the date of expiry by an irrevocable letter of renewal or replacement letter of credit in such form and on such terms acceptable to the CitySolicitor, the City may be permitted to draw on up to 100% of the letter of credit on or before the date of expiry.

All reductions on the letter of credit shall be in the sole discretion of the City and the City shall not be obligated to reduce the letter of credit by any amounts based on actual work performed by the Developer.

In the event the Developer fails to provide sufficient cash or a letter of credit as required pursuant to the provisions of this Agreement, such failure shall be deemed to be a substantial default pursuant to provisions of this Agreement and such default shall enable the City to realize on all or a part of the Lands secured by this Agreement in the same manner as if the City was enforcing its rights as a mortgagee against such lands.

(7)Prior to the commencement of construction of any of the Services, the Developer shall obtain and maintain insurance, and continue to maintain such insurance until final acceptance of the Services pursuant to the provisions of the Subdivision Agreement against all damages or claims for damage, with an insurance company satisfactory to the City. Such policy or policies shall include the City as a named insured and a certified copy of such insurance policy shall be delivered to the City and be in full force and effect until a Certificate of Completion has been issued by the City Engineer for all Services pursuant to the Subdivision Agreement and final acceptance by the City of such Services pursuant to the Subdivision Agreement. Such policy of insurance shall be in a form acceptable to the City Solicitor and without limiting the generality of the foregoing, shall provide:

(a)that the minimum limits shall be not less than $5,000,000.00 for any single occurrence;

(b)that it shall not contain an exclusion for blasting;

(c)that the insurance premium has been prepaid for a period of not less than one year;

(d)that the policy will provide that it is not cancellable unless prior notice by registered mail has been received by the City from the insurer not less than thirty (30) days prior to the cancellation date;

(e)the policy shall not contain a deductible clause, provided however, if the policy does contain a deductible clause, the same shall be approved by the City, and the Developer shall provide an additional cash deposit payable to the City in an amount to be determined by the City. In the event of claims made against the City to which the deductible applies, the City shall appoint an independent adjuster to investigate such claim, and the finding of the independent adjuster shall authorize the City to pay such claims deemed valid by such adjuster out of the additional cash deposit posted with the City. In the event such additional cash deposits are deemed to be insufficient by the City at any time and from time to time, the Developer hereby agrees to pay such additional cash deposits forthwith to the City. All costs of the adjuster shall be borne by the Developer.

(8)The Developer hereby agrees to indemnify and save the City completely harmless with respect to any claims, demands, costs, actions, causes of action, suits, proceedings, debts, damages or costs whatsoever, at law or in equity, suffered or incurred by the City, whether directly or indirectly, as a result of this Agreement, the Lands, any pre-servicing of the Lands, the Plan, or as a result of any other matter or thing in connection therewith or pertaining thereto, including any default by the Developer pursuant to the terms of this Agreement, or by reason of any negligence or wrongful act of the Developer, its servants, agent or representatives, and without limiting the generality of the foregoing, such indemnification shall extend to the following:

(a)all engineering fees, disbursements and related expenses of the City Engineer as a result of his services required to be performed for the City in connection with this Agreement, the Lands, the pre-servicing of the Lands, or the Plan or any other matter or thing in connection herewith or pertaining thereto;

(b)all legal fees and disbursements as a result of legal services rendered to the City in connection with this agreement, the Lands, the pre-servicing of the Lands, the Plan or any other matter or thing in connection herewith or pertaining thereto;

(c)any costs and damages suffered by third parties as a result of the negligence of the Developer or the default of the Developer pursuant to the terms of this Agreement or the contravention of any Laws, notwithstanding the fact that such third parties have not claimed or are not entitled to claim against the City for such damages or costs;

(d)the reasonable cost of all Services and the employment of all persons, firms and corporations in connection with this Agreement or referred to herein.

The Developer shall pay promptly any and all accounts rendered by the City to the Developer pursuant to any provision of this Agreement, and all accounts shall be due and payable upon the date that the same are rendered. Failure to pay such accounts within fifteen (15) days from the date thereof shall result in interest being added thereto at the rate of two (2%) per cent per month until payment in full has been received.

(9)The Developer acknowledges and agrees that in commencing the construction of Services in advance of the registration of the Plan of Subdivision, he does so at his sole risk. The execution of this Agreement shall not be construed by any party as constituting compliance with any condition of Draft Plan approval for the Lands. The execution of this Agreement and the construction of Services in no way commits the City to final approval of the Draft Plan, assumption of any of the Services or to the granting of any further planning approvals related to the Lands and in no way guarantees that final registration of the Plan of Subdivision will occur.

(10)The Developer agrees to engage the services of Marshall Macklin Monaghan (the "Consulting Engineer") to provide resident supervision for all works undertaken on the Lands and to carry out or provide for all field layout, contract administration and all testing whenever a contractor installing the Services is on the Lands. The Developer shall provide the City Engineer with a copy of the contract between the Consulting Engineer and the Developer.

(11)The Developer agrees that it shall, upon the request of the City, make, do, execute or cause to be made, done or executed all such further and other lawful acts, deeds, things, devices and assurances whatsoever to ensure the full implementation of the terms, provisions and conditions of this Agreement, and to satisfy the intentions of the parties as set out herein.

(12)The Developer agrees to comply with every direction issued or given by the CityEngineer during the course of pre-servicing, including, without limiting the generality of the foregoing, the cessation of work, the installation or carrying out of additional works (whether within or beyond the limits of the proposed Plans), the phasing of works or any other matter which the City Engineer deems to be in the interest of the proper development of the Lands and surrounding lands. The Developer acknowledges that the City Engineer may for any reason require the cessation of servicing and agrees to comply with such direction. In the event the CityEngineer requires a cessation of servicing, then the Developer has no redress, claim, demand, right of action whatsoever against the City.

(13)The Developer agrees that the City may draw on the letter of credit deposited in accordance with Schedule "C" and described in paragraph 7 above for the completion of any works considered necessary by the City Engineer in his sole discretion and other works such as rectification of drainage problems and clean-up of existing roads, or for the purposes of restoring the Lands to its original condition if, in the sole opinion and discretion of the City Engineer, reasonable progress in the Construction of Services has not been made.

(14)The Developer agrees that he shall maintain and keep current the approvals of all government agencies referred to in sub-paragraph 2(c) above and that he shall comply with all the requirements of those agencies from time to time.

(15)The City may terminate this Agreement at any time by giving to the Developer twenty (20) days written notice of its intention to terminate, without any compensation, payment or liability to the Developer as a result of such termination.

(16)The parties agree that this Agreement shall terminate upon the earliest of:

(a)the termination of this Agreement by the City pursuant to paragraph 15;

(b)September 30, 1999; or

(c)the date of any default by the Developer pursuant to any of the terms of this Agreement.

Upon termination of the Agreement, if in the sole opinion of the City the pre-servicing of the Lands has not been completed to the satisfaction of the City, the City may require the Developer to restore the Lands to their original condition or may do so itself using Securities posted pursuant to this Agreement or may draw on any such Security to complete the Services in accordance with the Plans and Specifications.

(17)Nothing in this Agreement shall be construed as requiring the City to issue any building permits including foundation permits and permits for model homes. Building permits shall only be issued in accordance with the Building Code Act (Ontario), the Subdivision Agreement and any Model Homes Agreement.

(18)The Developer hereby consents to the registration of this Agreement upon the Lands and hereby acknowledge that the same constitutes a first lien upon the Lands (not subject to any other liens or encumbrances) as security for any obligation of the Developer pursuant to this Agreement. The said lien shall be enforceable upon a judgment or order of any court and all or any part of the Lands may be realized as security for such lien in the same manner as if the City was enforcing its rights as a mortgagee under a mortgage.

(19)The Developer hereby agrees not to assign this Agreement without the express consent to be obtained in writing from the City. Such consent may be refused by the City unless:

(a)the proposed assignee has executed an assumption agreement acceptable to the City Solicitor;

(b)the Consulting Engineer has agreed to be employed by the proposed assignee and continue on to act as Consulting Engineer as required by this Agreement;

(c)the encumbrancers have consented to the assignment;

(d)the Developer is not in default under any of the terms of this Agreement.

(20)Subject to the restrictions on assignment hereof by the Developer, this Agreement shall enure to the benefit of and be binding upon the respective successors and assigns of each of the parties hereto. If a party hereto is a person, this agreement shall further be binding upon the respective heirs, executors, legal representatives and administrators of such person. "Successors and assigns" shall include any successor in title to the Developer as if such successor in title had entered into this Agreement in the place and stead of the Developer, and in the event of more than one successor in title to the Developer, or successors in title to part of the Lands, all of such parties collectively shall be deemed to be the Developer pursuant to the terms of this Agreement. For greater certainty, it is intended that the obligations of the Developer shall also be binding upon all of the successors in title to the Developer of the Lands save and except any Lands conveyed to the City, but no conveyance to any successor in title shall relieve the Developer of its obligations pursuant to this agreement.

In Witness Whereof the parties hereto have affixed their corporate seals, duly attested by the hands of their proper signing officers in that respect.

Signed, Sealed And DeliveredCity Of Toronto

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Schedule "A"

(Lands)

All And Singular that certain parcel or tract of land and premises situate, lying and being in the Cityof Toronto (formerly Borough of East York) and being composed of Parcel 14-1, Section Y-3, being Part of Lots 14 and 15, Concession 2, from the Bay, being part of Bayview Avenue as stopped up and closed by By-law No. 182-79 of The Municipality of Metropolitan Toronto, registered as Instrument No. 228130 East York, designated as Parts 1 and 2, Plan 66R-15795.

Subject to a right-of-way described in Instrument No. 232084 East York in favour of The Municipality of Metropolitan Toronto, in perpetuity over part of the said Lot 15, designated as Part 2, Plan 66R-15795 for pedestrians only.

The boundary of the east limit of Pottery Road has been confirmed under the Boundaries Act by Plan BA-99 registered as Plan 7745.

Schedule "B"

(Reduced Copy of Plan)

Schedule "C"

(Security)

Total Security Required

For This Agreement$100,000.00

The East York Community Council also submits the following communication (November9,1998) from Mr.Donald Lake, East York:

"Submission:

This agreement not be entered into as it is contrary to municipal interests.

Substitute Motion:

The East York Community Council wishes for the record to make the following statement to the developer of the Governors Bridge Subdivision. Municipal authority will exact the precise terms of the agreement and the by-law placed on this subdivision. The developer must follow each and every article of the agreement, all by laws, all federal and provincial laws and standards. Any action to date that is contrary to any laws or by laws will result in the full prosecution of any laws that have been transgressed. We hereby order a complete investigation into the behaviour of the developer on actions committed to date.

The East York Community Council wishes to reassure the Governors Bridge Neighbourhood that it has made a mistake by not telling the entire community in a timely fashion about this proposal for a pre-servicing agreement. We wish to tie the pre servicing agreement into the site plan agreement. We will also make the OMB appellant and abutter, as well as a elected member of the community, party to the siteplan. We will further order that all of the trees that were removed by the developer improperly or one city lands be immediately replaced and the developer will be asked to deposit with the municipality a sum of $100,000 to maintain these trees in perpetuity.

Reasons:

1) The developer has no authority to commence work. He has acted very aggressively. The municipality acted in bad faith by not controlling the developer. The Nesbitt access looks like a napalm run from the movie "Apocalypse Now". The removal of trees was far greater than required or expected. Important trees were removed without notice and without authority. It would appear that the removal of trees included those on public property.

I am told by knowledgeable residents mature trees were also removed. This developer must be told either abide by the law or do not even attempt to build. The defeating of the agreement proposed by the "city solicitors" and the passing of the substitute motion should get the message across to the developer and the municipality.

2) The agreement the "city solicitor" proposes was circulated, to the best of my knowledge to two people in my community there was between 7 and 8 days given for these two people to respond. There is a strange coincidence to this occurrence. On November 3/98 my solicitor and I visited the municipal offices to attempt to find out what was happening on the ghost land. That night I received a copy in mailbox with the agreement and covering letter dated Nov. 3/98. The letter of the "city solicitor" was dated "Oct. 28/98". Is it possible that no notice of this agreement would have been received by any member of the community, if I had not been investigating the matter? No municipal employee had any knowledge of what had occurred. However, My solicitor and I were told by an employee they received a call from a concerned neighbour the day before.

Grounds for grave concern exist in my community. This development will have a great impact. The land is environmentally important on the banks of the Don River, We expect municipal authority to enforce the law. We expect each and every member of our community to be informed about any and all new developments. The conditions of agreement of the plan of subdivision are many and complicated. We expect they will be enforced.

3) All parties including the "city solicitor" should be aware the OMB has placed a condition requiring the sewage system must be sustainable before any construction can take place on the site. The condition has not been fulfilled. Ongoing work on the community's sewage system leads the neighbourhood to believe there are very serious problems with the sewage system.

4) In view of the above why would the "city solicitor" be motivated in the protection of municipal interests to enter into an agreement that would involve premature to completely unnecessary destruction of the environment. The "citysolicitor" claims this is a "common practice". It is my understanding when municipalities enter into premature site plans in very suburban areas when there are a considerable number of sub divisions being built, the impact is slight when there are few existing homes. This is contrary to the current situation of a mature neighbourhood which is being adversely affected by this development. He claims that will "protect municipal interests". It is true this agreement must be entered into as a condition of the agreement, but why must it be premature? The "city solicitor" then claimed a premature agreement will be held "to restore lands..." in the event there is no development. If there were no premature destruction, then there would be no need to do any form of restoration. In short the "city solicitor" has provided no credible reasons for entering into a premature agreement.

5) The "city solicitor" agreement is defective, as it does not include a map in Schedule B.

6) In Schedule A it states the lands include the east limit of Pottery Road. It would appear the developer has removed tree beyond this boundary. I think it is reasonable to assume the developer should be aware of the boundaries and yet this would appear to be transgressed.

7) The agreement of the "city solicitor" claims in schedule C that $100,000 is an appropriate security to restore what has currently been destroyed. My submission is it should be $500,000 if there is a premature agreement. If it reasonably expected these funds should be used to "to restore the lands in the event the development does not proceed." The fact the municipality must take a strong position on this matter is reflected by the bad faith displayed by the developer in proceeding to destroy foliage without authority.

8) I have concerns about appointing the firm suggested by the "city solicitor" as the Consulting Engineers. It is my recollection there was evidence at OMB stating there was nothing wrong with the current sewage system. This evidence was quite contrary to the opinion of the community's expert and reports commissioned by the municipality all of which stated the system must be replaced, Their evidence on traffic was quite contrary to the community's views. The petition (with 150 names) presented by the community to the East York Council reflects the true concerns of the community.. The "city solicitor" should be asked to find a firm that can perform these duties with a more appropriate level of independence from the past and one that can enter this assignment without preconceived ideas contrary to those of the community. We do not wish our tax dollars to be spent on a firm that lacks an appropriate understanding of the situation.

Conclusion:

a)The developer was aggressive and the municipality has acted in bad faith by not controlling his actions.

b)The agreement is premature and no credible reasons have been presented that it is needed before the OMB condition has been removed.

c)There was a complete denial of due and democratic process in the attempt to present this agreement to council.

d)The document presented is defective and map is not included.

e)The sum suggested in the agreement is inadequate to restore what was irregularly removed in the way of foliage.

f)The selection of the consulting engineer is in inappropriate.

g)The manner and timing of the notice of the agreement is contrary to the notion of due process and not democratic."

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Mr. John Alati, Solicitor, Davies Howe Partners, on behalf of Jasamax Holdings Inc., Toronto, appeared before the East York Community Council in connection with the foregoing.