January 29, 1999

To: Economic Development Committee

From:Joe Halstead, Commissioner of Economic Development, Culture and Tourism

Subject: New Media Village Growth Corporation, Toronto ("New Media Village")

Purpose:

This report provides an overview of the New Media Village and its innovative strategies to support the advancement of New Media technology companies in the City of Toronto. This report also outlines the role of the Economic Development Division in the new media sector and requests Council's participation through the appointment of members to the Board of Directors of the New Media Village.

Funding Sources, Financial Implications and Impact Statement:

Any direct funding requirements for this initiative will be contained in the Division's 1999 budget submission.

Previous City commitments have included the contribution of office space at the East York Civic Centre; staff resources and sponsorship funds in the amount of $10,000 in 1998.

Recommendations:

It is recommended that:

1. Toronto Council confirm its continued interest in supporting the efforts of the New Media Village to advance the growth of the new media sector in Toronto;

2. in response to a request from the Board of Directors of the new Media Village:

(i)Councillor Michael Prue be reappointed as an ex officio member of the Board of Directors for a one year term commencing March 1999;

(ii)the Mayor or his designate; and one member from the Economic Development Committee be appointed as ex officio members of the Board for a one year term commencing March, 1999; and

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

Council Reference/Background/History:

The New Media Village was established as a Community Development Corporation by the former Borough of East York in 1995 and is located in the Economic Development Offices of the East York Civic Centre. The New Media Village has a Board of Directors comprised of 16 individuals representing a variety of public and private sector organizations. A list of current Board members is attached as Appendix "A" to this report.

The Corporation was formed to generate economic renewal in East York by creating initiatives that would help attract New Media companies to establish businesses in the area. The stimulus for this action by the former East York Council came from the loss of several major employers (Alcatel Canada Wire & Schlumberger) and the associated loss of the commercial tax base and employment in the Leaside Business Park.

Comments and/or Discussion and/or Justification:

The New Media Village combines the talents of the local business community and all levels of government to advance the growth of new media technology businesses in Toronto. The primary objective of the organization is to provide a "one-stop-shop" on the Internet for New Media firms seeking high-speed bandwidth business locations, finance sources and digital media talent and training facilities. The private-public sector partnerships that have evolved through the New Media Village are also facilitating high-speed bandwidth connections to buildings by linking the owners of fibre optic and wireless infrastructure with building owners and new media companies.

Through its activities the New Media Village has been successful in attracting New Media companies and other companies using digital technologies to East York's retro-fitted industrial buildings (E Concept, A1 Label). In fact, the vacancy rate in the East York area is at an all-time low of approximately 3% or less. The selection of new media as a target sector was due to the potential growth of this sector. The new media sector continues to be a strong growth area with significant future potential.

As a result of the City of Toronto amalgamation and the growth of other New Media clusters in the City, such as the Liberty Village area, the New Media Village recognized the need to develop a strategy that would benefit the New Media sector outside the boundaries of the former Borough. Effective January 1st, 1999, the Board of Directors made the commitment to work with businesses in other new media nodes across the city, with the objective of making Toronto one of the most prolific centres for new media industries in the world.

The Board members examined the factors that led to the creation of the New Media Village to determine if these factors were still relevant and considered how the initiative could be expanded to stimulate new media development across the City.

To this end, the New Media Village has:

1)Changed its name to the New Media Village Growth Corporation, Toronto;

2) Made a commitment to appoint additional Directors from New Media companies across the City of Toronto;

3) Created the first Sectoral Digitally based Site Selection Economic Development Tool in North America, which:

i) assists New Media and New Digital Economy companies search for Toronto's Bandwidth-Ready buildings by area, telecommunications service provider, space requirements, etc.;

ii) allows building owners and representatives to remotely over the Internet profile their building's telecommunications capabilities and available space;

iii) showcases Toronto's Bandwidth-Ready commercial/industrial buildings and Smart residential communities utilizing the City of Toronto's Geographic Information System.

4) Updated the web site with a focus on the City of Toronto providing links to other digital economy initiatives across the City; and profiled the most prominent New Media Clusters across the City (Liberty Village, Leaside/East York Centre, Port Area Studio District, Broadcast Network Corridor, Downtown Core, Berkeley-Cork Town Area, Yonge Street Nodes,);

5) Initiated the first on-line New Media and Telecommunications Directory for the City of Toronto;

6) Created an interactive Finance & Investment module which:

i)provides a summary of Financing Options for New Media firms seeking capital to expand, lease space and finance bandwidth/equipment;

ii) provides a Matchmaker Program that confidentially links New Media companies to Angel Investors through an on-line registration system;

iii) screens and categorized financing enquiries through a Quick Quiz Program so that firms can be identified and presented to the appropriate investors and finance companies;

iv) allows companies to submit their Executive Summary or Business Plan for review by a community Finance & Investment Task Force for suggestions.

7)Co operated with SMART Toronto, to provide links to digital education facilities across the Greater Toronto Area.

The New Media Village initiative has benefited from a broad base of public and private sector support for its activities. The Corporation is currently receiving financial participation from Human Resources Development Canada (HRDC), banks, developers, real estate firms, new media firms, as well as receiving volunteer support from over 200 individuals and organizations. In 1998 HRDC has provided this project with approximately $300,000 to create Toronto's "one-stop-shop" on the Internet for new media companies seeking "Intelligent Buildings" providing high-speed bandwidth telecommunications access, financial sources, digital education facilities and digitally trained talent. The private sector has also contributed approximately $70,000 over the past three years to this initiative.

The New Media Village Growth Corporation was created with the intent to eventually become self-financing through corporate membership sponsorships and advertising revenues through its web site. This is still the goal of the New Media Village, however, as the organization expands its mandate to support sector development across the City it will continue to require assistance from the Economic Development Division, consequently, New Media is one of the targeted sectors in the Division's 1999 work program.

The New Media Village has sufficient funding to complete currently budgeted projects until June 1999, however, the organization will have to secure further private sector funding to continue its programming. The Economic Development Division will continue to assist the Corporation with staff support and will provide a contribution of office space for the New Media Village in 1999.

Current & Proposed Board of Directors

The existing Director's on the New Media Village Board feel that a reconstituted Board of Director's should reflect its interest in working with other new media clusters in the City. The listing of Current and Proposed Board Representatives is attached as Appendix "A" to this report.

The New Media Village Board of Director's has asked that Council approve the appointment of the Mayor or his designate and two Councillors; one being from the Economic Development Committee to sit on the Board.

Councillor Michael Prue currently sits on the Board as an Ex-Officio Director with John Godfrey MP and John Parker MPP. Councillor Prue has been an active Director since the inception of the New Media Village and has indicated his interest in continuing his commitment. The New Media Village has asked that Councillor Prue be reappointed to the Board. Thus, the New Media Village Board of Director's is requesting that Toronto Council appoint the Mayor or his designate and one additional Councillor from the Economic Development Committee as Ex-Officio Director's of Toronto's New Media Village for 1999. The New Media Village Board will be reconstituted at its Annual General Meeting to be held in late February or early March, 1999. The Board of Director's meets approximately once per month.

Conclusions:

Toronto's New Media Village is the first Internet based sectoral economic development initiatives of its kind in North America and possibly the first in the world. The Economic Development Division has provided staff support, office space and limited funding support to help create this initiative. Currently, an Economic Development Division representative sits on the Board of Director's and coordinates the City of Toronto's participation and provides substantial input on the development of the web site: www.newmediavillage.com .

Toronto's New Media Village has the support of all three levels of government and business community support. The New Media Village is now advancing the growth of New Media technologies and business across the new City of Toronto, and is requesting City of Toronto Council endorsement and Board of Director's participation. Given the importance of this Economic Development initiative and the leverage gained through this private-public partnership, the Economic Development Division will continue to support the activities of the New Media Village as part of its 1999 work plan.

Contact Names:

Brenda Librecz, Managing Director, Economic Development Division 397-4700

Eva Pyatt, Manager, Sector and Strategic Partnerships 393-6076

Paul Azzarello, Business Development Consultant, City of Toronto & 397-4653

Director New Media Village Growth Corporation

Joe Halstead

Commissioner Economic Development, Culture and Tourism

Appendix A