Ontario Municipal Board - Final Settlement

- Winchester Square (Don River)

The Toronto Community Council recommends the adoption of the following report (December31, 1998) from the Commissioner of Urban Planning and Development Services:

Financial Implications:

The final settlement will result (upon completion of conditions) in a payment to the City of $500,000.00 for the purpose of contributing to community facilities at the City owned site at Sherbourne and Wellesley Streets.

Recommendation:

That the previous authorization concerning a Section 37 Agreement for Winchester Square (Urban Development Services report dated September 22, 1997) be amended to delete the provisions respecting requirements for the provision of community service and facility space as well as the education space and to replace such with the requirement that the owner pay to the City the sum of $500,000.00 for the purpose of contributing to community facility development in the St. James Town area and pay to the Toronto Board of Education the sum of $150,000.00 in lieu of the provision of education space.

Comments:

At its meeting of September 22, 1997, the former City of Toronto Council adopted a report concerning a settlement of issues for the Winchester Square Ontario Municipal Board hearing. That report had a number of recommendations to, among other things advise the Ontario Municipal Board of an acceptable Zoning By-law for the site, to release provisions of existing agreements and to execute a Section 37 agreement to secure community space at such time as one of the buildings in the development would be built in the future. As events have transpired in the past year the City has secured a site at Wellesley and Sherbourne Streets for the future construction of a community facility and the owners of the Winchester Square site have proposed to give the City a cash settlement of $500,000.00 in lieu of providing 750 square metres of community space in one of the buildings to be constructed at an undetermined time in the future. The owners are also proposing to give the Toronto Board of Education a sum of $150,000.00 in lieu of providing a smaller amount of space in such building.

I am recommending that the City accept this proposal since it assists the City in financing the development cost of the proposed community facility at Sherbourne and Wellesley Streets and it provides certainty compared to the provision of community space at an undetermined time in the future. I understand that the Board of Education also finds the proposal acceptable for their purposes. The payments to the City and the Board of Education would take place immediately prior to final zoning being approved by the Ontario Municipal Board.

This approval, along with the completion of previously approved actions would bring an end to a long and complicated dispute concerning this development site and would benefit both the City and the owners.

Contact Name:

Gary Wright

Community Planning, East Section

Phone: 416-392-1791

Fax:416-392-1330

Email:gwright1@toronto.ca

The Toronto Community Council also submits Clause No. 33 of Report No. 21 of the Executive Committee of the Former City of Toronto, headed "Request for Status Report on Winchester Square - Issues Before the OMB (Ward 7", which was amended and adopted by the Council of the former City of Toronto at its meeting of September 22 and 23, 1997:

The Executive Committee submits this matter to Council without recommendation.

The Executive Committee advises that it has requested the Commissioner of Urban Development Services and the City Solicitor to report directly to City Council on September 22, 1997, on the status of a proposed settlement of Winchester Square issues which are before the Ontario Municipal Board.

The Executive Committee submits of the report (September 9, 1997) from the Commissioner of Urban Development Services:

Origin: Commissioner of Urban Development Services (p:\1997\ug\uds\pln\ex971384.pln) - st

Recommendation: That the Commissioner of Urban Development Services and the City Solicitor be requested to report directly to the City Council meeting of September 22, 1997 on the status of a proposed settlement of Winchester Square issues which are before the Ontario Municipal Board

Comments: In a March 28, 1995 decision on the Winchester Square lands, the Ontario Municipal Board dealt with several issues between the parties but was unable to reach a definitive conclusion on all matters. On November 28, 1995 City Council instructed the then Commissioner of Planning and Development and the City Solicitor to present a proposed City settlement position, as outlined in a report of November 27, 1995 (Executive Committee Report No. 27, Clause 43), to the owners and to the Ontario Municipal Board at its hearing of December 15, 1995. The settlement position was subsequently rejected by the owners.

Negotiations have been continuing in an effort to reach agreement on all outstanding issues and it is hoped that such agreement will be reached shortly.

This report recommends that the Commissioner of Urban Development Services and the City Solicitor report directly to the City Council meeting of September 22, 1997 on the status of these negotiations. The City Solicitor concurs with this recommendation.

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(Council Action - September 22 and 23, 1997)

While considering this Clause, Council had before it the following report from the Commissioner of Urban Development Services (September 22, 1997):

Subject: Settlement of outstanding issues before the Ontario Municipal Board respecting Winchester Square (Ward 7)

Origin: Commissioner of Urban Development Services (p:\1997\ug\pln\cn971436.pln) -tm

Recommendations:

(1)That City staff be authorized to advise the Ontario Municipal Board that a Zoning By-law amending By-law 657-76, as amended, substantially in the form attached as Appendix A to this report, is acceptable to City Council, provided that the matters described in Section 3 of this report have been resolved and secured to the satisfaction of the Commissioner of Urban Development Services, the City Solicitor and the Commissioner of Corporate Services;

(2)That City officials be authorized to execute an agreement, pursuant to Section 37 of the Planning Act, 1990, substantially in the form attached as Appendix B, modified to incorporate Appendix C in Article IX and to add Appendix D as an Appendix to the Section 37 Agreement, such agreement to be registered as a first encumbrance against the title to the lot(s), to secure the matters outlined in Section 3 of this report;

(3)That a settlement of issues between Hugh Garner Co-operative and the owners respecting the Ramp Closing Agreement and the Ramp Closing Specifications, to the satisfaction of the Commissioner of Urban Development Services and the City Solicitor be incorporated into the Section 37 agreement;

(4)That City officials be authorized to execute releases of provisions of existing agreements on title to Parcels A, B and C, as determined by the Commissioner of Urban Development Services, in consultation with the City Solicitor, and to execute any amendments to the Section 37 agreement which may be required to incorporate former provisions into one consolidated agreement covering the Winchester Square parcels;

(5)That the City Clerk be authorized to assign a number to the Zoning By-law once the Ontario Municipal Board Order has been issued;

(6)Upon the issuance of the Ontario Municipal Board Order, in accordance with this report, that the City Solicitor be authorized to withdraw the application to the Divisional Court for leave to appeal in this matter;

(7)That a Bill be authorized to amend the Parks Levy By-law to exempt the Winchester Square lands from Chapter 165, Development of Land, Article 1, Conveyance of Land for Park Purpose, of the City of Toronto Municipal Code, upon issuance of the Ontario Municipal Board Order; and

(8)That City officials be given the authority to execute an agreement with the Toronto Board of Education which provides that the City shall act as trustee for the conveyance of those facilities, matters and things provided by the owners through the City to the Board of Education, as required by a by-law pursuant to Section 37 and as secured in the Section 37 Agreement and in the Board of Education=s Option to Lease and Form of Lease.

Summary: This report recommends that Council accept the position described in this report as settlement of all outstanding issues before the Ontario Municipal Board respecting the Winchester Square lands. I am recommending that Council accept the Zoning By-law contained in Appendix A which implements the Board=s decisions respecting certain building envelopes on the three remaining Winchester Square building parcels provided that matters outlined in Section 3 of this report are secured to the City through a Section 37 Agreement.

The Section 37 Agreement secures either the provision of 750 square metres of space for a community/library facility in Building A (Wellesley/Ontario) for a nominal sum on a 99 year lease plus a finishing allowance of $30.00 per square foot (in 1995 dollars), indexed, or an option to take cash in lieu of the space. The provision of 340 square metres of education space in Building A for use of the Toronto Board of Education is secured under similar terms with the exception of the finishing allowance.

The Agreement also secures the creation of an underground lane system in place of the surface lane and access ramp currently serving the underground garage. This underground lane is a key component of the site planning for Parcels A and B, freeing up valuable space at ground level for a consolidated, useable landscaped open space area.

Section 3 of this report outlines other Section 37 issues such as public parking spaces, parks levy, withdrawal of the City=s leave to appeal application and release of agreements.

Issues highlighted in the Appendices with a double asterisk (**) are still under discussion and expected to be resolved shortly. There are minor matters not indicated by a double asterisk which are still under discussion and are largely of a technical nature. These too are expected to be resolved shortly.

The report recommends that City staff be authorized to report to the Ontario Municipal Board on the acceptance by Council of the Zoning By-law substantially in the form attached as Appendix A and also be given the authority to enter into a Section 37 Agreement substantially in the form attached as Appendices B, C and D, as amended to incorporate any necessary provisions into the Section 37 Agreement resulting from a settlement of Hugh Garner Co-operative issues.

Comments:

1.Background

An Ontario Municipal Board hearing, convened over a total of ten weeks during 1993 and 1994, resulted in a March 28, 1995 decision respecting the Winchester Square lands which failed to reach a definitive conclusion on several planning matters. However, the Board=s decision contained certain findings which were intended to point the parties in particular directions.

On November 27, 1995, Council adopted a proposed City settlement position following the recommendations of the then Commissioner of Planning and Development in a report of the same date. That report noted that the major issues remaining at that time were the provision of community space within the development and the relationship between the provision of this space and the owners= request for relief from their contractual obligation to provide an extra 150 public parking spaces in addition to the spaces provided to meet Zoning By-law requirements. The settlement position was presented to the owners and the Ontario Municipal Board on December 15, 1995, but was rejected by the owners.

Subsequent negotiations have resulted in agreement being reached respecting all major outstanding issues. A few minor matters remain. This report recommends that Council support the settlement position, i.e. that Council indicate its acceptance of the proposed Zoning By-law contingent on the securing of certain matters by means of a Section 37 agreement .

The main components of the settlement position are the Zoning By-law described in Section 2 below and the Section 37 Agreement, including the Option to Lease and Form of Lease described in Section 3 below.

2.Zoning By-law

The full text of the Zoning By-law is contained in Appendix A. Portions marked by a double asterisk (**) are issues requiring further discussion.

The Zoning By-law amends By-law 657-76, as amended, and implements the Board=s decision approving certain building envelopes on the remaining three Winchester Square building parcels, i.e. Parcels A, B and C as indicated on Maps 1, 2 and 3 attached to the by-law ( See Appendix A for Zoning By-law and Maps.)

Parcel A at the corner of Wellesley Street East and Ontario Street has a six-storey base building which rises to 10 storeys on the Wellesley Street East frontage, stepping down to four storeys on Ontario Street (See Map 3.) Parcel B at the corner of Bleecker Street and Wellesley Street East has a six-storey base building rising to 12 storeys on the Wellesley Street East frontage, stepping down to eight floors plus a mezzanine floor along Bleecker Street. The Sherbourne Street parcel, Parcel C, has a seven-storey tower straddling four-storey wings along Bleecker and Sherbourne Streets. (See Map 2.) The height map shows heights in both storeys and metres.

The Zoning By-law requires the provision of 750 square metres of space for community services and facilities in a building on Parcel A as well as the provision of 340 square metres of space for education use in the same building. Non-residential gross floor area up to a maximum of 150 square metres on Parcel A and 500 square metres on Parcel B will be permitted in addition to the community services and facilities space and the education space.

The Zoning By-law separates out Parcels A, B and C from the provisions contained in By-law 657-76, as amended, respecting the remainder of the parcels on the Winchester Square site. It eliminates the former landscaped open space requirement for the whole of the main site and for the combined Alot@ (i.e. the main site and the 405 Sherbourne Street site), replacing the former requirements with new landscaped open space requirements for each of Parcels A, B and C and a landscaped open space requirement for the remaining parcels which have already been developed which reflects the current situation.

The table below shows the maximum permitted gross floor area figures, the minimum requirements for landscaped open space and the height limits for each of the undeveloped parcels:

ParcelMaximum permittedMinimum required Height limits

gross floor areaLandscaped open space

A14920 sq.m. 776 sq.m.31.5 m

15130 sq.m.1100 sq.m.37.5 m

C 9300 sq.m. 782 sq.m.22.5 m.

The Zoning By-law also provides for additional below-grade floor area used for community services and facilities to be exempt from gross floor area calculations to the extent of 750 square metres and 500 square metres on Parcels A and B respectively, in line with the City=s Official Plan policies permitting such exemptions up to 10 percent of the gross floor area permitted on the lot.

According to the Zoning By-law, once the buildings on Parcels A and B are completed, access/egress to the underground garage on Parcels A and B will be limited to access from Bleecker Street through Building B and egress to Ontario Street through Building A. These provisions secure the removal of the existing surface lane and ramp in the long term while permitting temporary access via the existing lane and ramp during construction of Buildings A and B.

Parking provisions in the By-law will maintain the parking requirements for the existing buildings while subjecting development of Parcels A, B and C to general Zoning By-law parking requirements, with additional requirements in the case of condominium development. The By-law permits, but does not require, drive-through loading spaces on Parcels A and B with a service driveway not exceeding 4 metres traversing the site from Bleecker to Ontario Streets for use by garbage trucks only.

3.1Section 37 Agreement

The full text of the Section 37 Agreement is contained in Appendices B, C and D. Paragraphs still under discussion are marked with a double asterisk (**). There are minor matters not indicated by a double asterisk which are still under discussion and are largely of a technical nature. All outstanding matters are expected to be resolved shortly.

3.2Community/library space provisions

When Building A is developed on Parcel A, the owners will provide to the City 750 square metres of space at grade level for the purpose of a community/library facility. If the City does not choose to incorporate a library in his space, the space for community use will be reduced to 500 square metres. The space will be provided in accordance with a list of specifications appended to the agreement. The specification of loading requirements for library use is still under discussion.

In essence, the space will be unfurnished but a finishing allowance of $30.00 per square foot ($322.93 per square metre) in 1995 dollars, indexed according to STATSCAN Construction Price Statistics, will be provided by the owners. Net rent for the space will be nominal with the City paying only operating costs. The length of the lease would be 99 years.

Under the Section 37 agreement, the City has an option to elect to be paid cash-in-lieu of having the space provided.

3.3Toronto Board of Education space

The Section 37 agreement contains a requirement to secure 340 square metres of education space on the ground floor of Building A with a cash option in favour of the Toronto Board of Education. The Board of Education has negotiated an option to lease at nominal rent and a lease, both of which will be attached to the Section 37 agreement as appendices.

3.4 Underground lane access to parking garage

When Parcels A and B are fully developed, the access to the parking garage serving Buildings A and B and Hugh Garner Co-operative will be via an underground lane from Bleecker Street to Ontario Street, replacing the existing east/west surface lane at the rear of the properties fronting on Wellesley Street East. Current access to the underground garage below Hugh Garner Co-operative and Parcel A is obtained via an existing ramp off the lane just west of the Hugh Garner Co-operative building. The existing ramp will be closed, decked and landscaped to form part of the landscaped open space area.

The creation of the underground lane is a key component of the site planning for the remaining undeveloped portions of the main Winchester Square block. It was the shortfall in landscaped open space on the main block that initially triggered this rezoning application. Thus, City staff argued at the hearing, and the Ontario Municipal Board agreed, that a consolidated, useable landscaped open space area at the north end of the site should be a prime feature of the site plan. Moving vehicular traffic from the surface to the underground lane greatly assists in accomplishing this goal.

Details of the Ramp Closing Agreement and the Ramp Closing Specifications, two appendices to the Section 37 agreement securing the ramp closing, are still being negotiated between the owners and Hugh Garner Co-operative, who have an ownership interest in the ramp area.

Prior to full development of Parcels A and B, access arrangements utilizing the existing surface lane and the existing ramp will be retained.

The option of providing a service driveway between enclosed garbage rooms in Buildings B and A for use by garbage trucks only is also outlined in the agreement.

3.5Tender of Parking Spaces

The 1978 Development and Land Exchange Agreement between the City and the owners, which is registered on title of the Winchester Square lands, requires the owners to provide 150 public parking spaces in addition to the number of spaces required to meet Zoning By-law standards.

The November 27, 1995 report of the then Commissioner of Planning and Development , adopted by Council that same day as a proposed settlement position, described the Ontario Municipal Board=s comments on the public parking requirement. The Board said he was willing to sacrifice parking in return for the provision of quality community and library space and that he was willing to Acommit to 75 spaces@, suggesting that the City co-operate. The Board also concluded that the City should share with the owners the cost of finishing the remaining 75 spaces in order to make them accessible to the public. The owners had estimated the costs of renovating the parking spaces at $2,662.00 per space in 1995 dollars. (With the cost of renovating the 75 spaces estimated at $199,650.00, the City=s share of such costs would be $99,825.00 in 1995 dollars and to be indexed)

Thus the proposed City settlement position outlined in that report recommended both reducing the requirement from 150 to 75 spaces and contributing to the garage renovation costs.

Subsequent discussions centred around the actual need for such spaces, with the Ontario Municipal Board favouring the evidence of the owners= expert witness who testified that there was no parking demand in the neighbourhood for the 75 spaces and that it was not an economically feasible proposition.

Further discussions between the owners and City staff have resulted in an arrangement whereby the owners, in lieu of an obligation to operate such parking spaces, would be obligated to offer to lease the spaces to an operator under a nominal rental lease. Details of the Parking Operation Agreement, which will be an appendix to the Section 37 agreement are still under discussion. The City contribution to garage renovation costs remains part of the settlement position.

3.6Option to Lease Agreement for Community/Library Space

The text of the Option to Lease Agreement, contained in Appendix C attached to this report, will ultimately be incorporated into the Section 37 Agreement under Article IX. The Form of Lease contained in Appendix D will appear as an appendix to the Section 37 Agreement.

As outlined in Section 2 above, at the time of construction of Building A, 750 square metres of space at grade will be provided for the purposes of a combined community/library facility. If a library is not incorporated , the space will be reduced to 500 square metres.

The Option to Lease Agreement has been structured so that the City will have two full budget cycles to determine whether the corporation wants to lease the space or, instead, wants to exercise the cash option. The cash option would include the estimated costs of construction of the unfinished space and the finishing allowance. The cash option would enable the City to use the cash for community use elsewhere within the defined neighbourhood bounded by Jarvis Street, the Don Valley, Gerrard Street East and Bloor Street East.

Although most of the details of both the Option to Lease and the Form of Lease have been agreed to, a few items including life of the building issues remain under discussion.

3.7Option to Lease Agreement for Education Space

As described in Section 3.3 above, at the time of construction of Building A, 340 square metres of space at grade will be provided for Toronto Board of Education use. Since the Board of Education is not a signatory to the Section 37 agreement, conditions respecting the Option to Lease Agreement and the Form of Lease and the specifications for the education space are attached as appendices to the Section 37 agreement.

As in the City agreement, the Toronto Board of Education has similar provisions respecting nominal rent, term of 99 years, etc. However, no finishing allowance is being provided. The Board will also have an option to elect to be paid cash in lieu of having the space provided.

3.8Parks Levy

As part of the settlement position adopted on November 27, 1995, Council decided to exempt the owners from the Parks Levy provisions of the Municipal Code. The November 27, 1995 settlement report noted that when agreement was reached in the 1970's on the components of a deal for the Winchester Square lands, one component was a contribution by the owners of 1.383 acres of land for parks purposes. Together with the City=s contribution of 1.617 acres, a total of three acres of parkland was created over three separate areas of the site. The then Commissioner of Parks and Recreation at that time concurred with the exemption. The proposed exemption remains as part of the settlement package.

3.9 Leave to appeal application

The Ontario Municipal Board=s March 28, 1995 decision concluded that an Official Plan Amendment was not required to implement the owners= proposal for Winchester Square, despite the fact that the owners= proposed buildings on the main site would exceed the density limit of three times the lot area in a High Density Residence Area.

The City is seeking leave to appeal this decision in the courts.

In November, 1995, Council took the position that the City would withdraw its leave to appeal application should the owners and the City reach an agreed settlement. This remains part of the settlement package.

The City will pursue an Official Plan Amendment to ensure that the definitions in the Official Plan cannot be amended on a site-specific basis through amendments to the Zoning By-law.

3.10Release of Agreements

There are a number of legal agreements on title, including the Development and Land Exchange Agreement referred to above, agreements related to previous development approvals , a Parking Agreement and others. These documents are currently being reviewed by the City Solicitor and will be released and discharged from Parcels A, B and C, with any provisions required to be maintained being incorporated in the Section 37 Agreement.

Conclusion: I am recommending that City Council accept the settlement position outlined in the body of this report in order to bring the lengthy OMB deliberations on the matter of the Winchester Square lands to a close.

The City and area residents would be obtaining the benefit of either a substantial 750 square metre community/library facility or cash in lieu thereof.

The City Solicitor has reviewed this report and concurs with its content and recommendations.

Attachments on file with the City Clerk.

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Councillor McConnell moved that the Clause be amended by adding:

That the report from the Commissioner of Urban Development Services (September 22,1997) be adopted.

which Council adopted.

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Council adopted the Clause, as amended.