January 4, 1999

To: Corporate Services Committee

From: Commissioner of Corporate Services

Subject: Canada Malting Complex - Rehabilitation and Reuse - Extension of Milestone Dates (Ward 24 - Downtown)

Purpose:

The purpose of this report is to obtain authority to extend the milestone dates set out in the Term Sheet adopted, as amended, by the previous Council of the former City of Toronto on October 6, 1997.

Financial Implications:

There are no financial implications of this report.

Recommendation:

It is recommended that authority be granted for the extension by one year of all milestone dates contained within the Term Sheet, as amended, which provides the basis for a Master Agreement between the City of Toronto and Metronome Canada Incorporated for the rehabilitation and reuse of the Canada Malting Complex.

Background:

Metronome Canada Incorporated ("MCI") was previously identified as the preferred proponent responding to a Proposal Call issued for the rehabilitation and reuse of the Canada Malting Complex, subject to the resolution of a number of outstanding issues. After extensive negotiation, these outstanding issues were resolved.

At its meeting of October 6, 1997, City Council adopted a report from the previous City of Toronto Board of Management to which was attached, as Appendix "A", a relatively detailed Term Sheet, as amended, setting out the basic terms and conditions of the agreement between the City and MCI including a number of milestone dates. It was anticipated that the City and MCI would enter into a Master Agreement governing the rehabilitation and reuse of the Canada Malting Complex which would incorporate the terms, conditions and milestone dates contained within the Term Sheet, as amended.

Comments:

The Master Agreement has been drafted in a manner which reflects the terms, conditions and milestone dates contained within the Term Sheet, as amended. All issues were satisfactorily resolved except of the requirement of MCI to construct 89 parking spaces for the use of the Toronto City Centre Airport (TCCA). City staff and MCI held opposing views regarding where the burden of capital construction cost lay and negotiations began to break down. The requirement to construct 89 parking spaces flows from a previously agreed upon arrangement between the City of Toronto and the TCCA whereby the City incurred a liability to provide 89 parking spaces for the exclusive use of the TCCA.

The requirement to provide parking was affected by the possibility of a fixed link to the City Centre Airport. Should the fixed link proceed, parking could be provided at the City Centre Airport. At its meeting of December 16, 1998 Toronto City Council approved a fixed link to the Toronto City Centre Airport. Given this development, the issue of provision of parking for the TCCA need no longer be dealt with in the context of the Master Agreement between the City and MCI.

The milestone dates contained within the Term Sheet are relative to the date that the Master Agreement is executed. Due to previously unresolved parking issue, the execution of the Master Agreement has been delayed for approximately one year. As a result, all subsequent milestone dates will be required to be extended by one year. Notwithstanding this delay, MCI has continued to move forward. For example, indications are that charitable registration will be obtained in the near future and, once secured, MCI is set to announce, in conjunction with its music industry partners, a Canada wide promotion which will involve point of purchase displays in every retail music store.

Conclusions:

Negotiations between the City and MCI became deadlocked surrounding the issue of provision of parking for the TCCA and the milestone dates set out in the Term Sheet, as amended, are no longer feasible. Given the approval of a fixed link to the City Centre Airport, the provision of parking for the TCCA on the Canada Malting site is no longer an issue. Authority to extend the milestone dates for a period of one year should be granted in order that the City and MCI may move to execution of the Master Agreement governing the rehabilitation and reuse of the Canada Malting Complex.

Contact Name:

Bonnie G. Duncan, Tel: 416-392-1861, Fax:416-392-1880, Email: bduncan.www.toronto.ca (cs99005.wpd)

Margaret Rodrigues

Commissioner of Corporate Services