Proposed Redevelopment - North-East Quadrant,

North Regent Park, Don River Ward

 The Community and Neighbourhood Services Committee recommends the adoption of the following report (April 7, 1998) from the Commissioner of Community and Neighbourhood Services, subject to amending Recommendation No. (1) to read as follows:

 A(1)staff be directed to continue working with Provincial representatives, the Province=s development partner, the North Regent Park Working Committee and community representatives to further the proposed redevelopment, on the basis of the City goals and objectives set out in the body of this report;@:

 Purpose:

 To inform Council of the redevelopment which is being planned for the area bounded by Gerrard, River, Oak, and Sumach Streets, and of the position staff has taken to date regarding the proposal. To seek Council=s endorsement of that position, and obtain any additional input Council may wish to provide.

 Funding Sources, Financial Implications and Impact Statement:

 To be determined. No impact on the 1998 budget. Financial information on this proposal will be provided when the details are further developed.

 Recommendations:

 It is recommended that:

 (1)staff be directed to continue working with Provincial representatives, and with the Province=s development partner, to further the proposed redevelopment, on the basis of the City goals and objectives set out in the body of this report;

 (2)staff be instructed to report back to Council when the redevelopment proposals are further advanced including all costs, revenues, and any contribution from the City, if required; and

 (3)staff be requested to report again in two months on the progress of negotiations between the parties, and the extent to which the City=s goals and objectives are being satisfied.

 Background/History:

 In May 1997, the Ministry of Municipal Affairs and Housing, on behalf of the Ontario Housing Corporation, issued a Request for Proposals (RFP) to the development industry for the redevelopment of the north-east quadrant of North Regent Park via a public/private partnership. The proposed redevelopment area comprises the lands bounded by Gerrard Street on the north, River Street on the east, Oak Street on the south, and Sumach Street on the west (see plan attached).

The RFP elicited seven responses. These were assessed by a team comprised of one representative each from the former City of Toronto, CMHC, the Ministry of Municipal Affairs and Housing, and the Metropolitan Toronto Housing Authority, and three tenant representatives of the Regent Park community. The professional advisor was Barry Lyon. This team ultimately recommended two proposals. The Arcadia Group was selected by the Board of the Ontario Housing Corporation as the party with which the Province would negotiate a development agreement. Those negotiations are still underway. In the absence of an agreement satisfactory to the Province, they have the right to go to the second candidate.

 The issuance of the RFP flowed from the initiatives of a Working Committee of Regent Park tenants and resource people, chaired by John Sewell. That Committee continues to meet with Provincial staff and Arcadia, to work out the plan for, and details of, the proposed redevelopment.

 The subject site currently contains 163 subsidized housing units in a variety of sizes - a few on-grade townhouses, and the rest in three-storey walk-up apartments. All are in a deteriorated condition and in need of significant repair. The RFP required the replacement of the existing units, and the creation of additional units of market housing to assist in re-establishing a mixed-income, mixed-tenure community. One of the other stated objectives of the proposal is to reintegrate the Regent Park community with the surrounding neighbourhoods.

 The Arcadia Group=s concept is to use the income from the land used to build the market units to finance the shortfall that will exist between the cost of construction and ongoing operating costs of the new RGI units, and the money currently available from existing government subsidies and tenants= rents. By prepaying the shortfall as an annuity, Arcadia believes it can be reduced to a level that can make the project financially successful.

 The Province has agreed to continue the flow of subsidy funds to the replacement units. The current subsidies are paid under a Federal/Provincial agreement which expires in the year 2011.

 The site is owned by the Ontario Housing Corporation, however the City of Toronto has a reversionary interest in the land and will regain title in the year 2024, i.e., thirteen years after the current subsidy agreement expires. Under an Agreement dated May 1, 1969, Central Mortgage and Housing Corporation (CMHC) loaned the Ontario Housing Corporation (OHC) some $7.5 million to acquire the entire North Regent Park site, comprising 1,397 housing units. The loan was repayable in 45 years, and therefore comes due in 2014. For the proposed redevelopment of the north-east quadrant to take place, CMHC=s consent will be required.

 The Ministry of Municipal Affairs and Housing wrote to me on January 26, 1998, Ato formally request that the City of Toronto proceed to take those steps necessary to relinquish to Ontario Housing Corporation the City=s remaining interest in the site.@

 The Provincial share of subsidies currently paid to finance all of North Regent Park are being down-loaded onto the City. Only the responsibility for administration of the program remains to be decided.

 Comments:

 A team comprised of staff from various City Departments has been formed to deal with this Provincial/private sector proposal. That group has started to formulate the goals and objectives that the City should establish for the proposed redevelopment. In the absence of a specific proposal, and without a plan or pro-forma, we are only able to address the proposed undertaking at a very general level. Therefore, we are taking this opportunity to make Council aware of the proposed redevelopment, and to set out the position taken to date by staff. We are seeking endorsement of the staff position, and authority to continue working with the Province and Arcadia in an effort to bring it about as quickly as possible.

 The Commissioner has responded to the request that the City relinquish its interest in the land by saying that the City will consider restructuring its interest in a way that will facilitate the redevelopment. Beyond that, we have set out the following objectives:

 -Protection of Affordable Housing: The new units which replace the existing stock must remain rental in the long term, and be affordable to low-income tenants in the long term. Some means of ensuring their availability for long-term affordable rental must be put in place, whether by a lease of the land under the replacement units, or by means of a social housing agreement, or equivalent, registered on title to those units. Similarly, appropriate protections for existing tenants through relocation, into the proposed new units, and for their future long term tenure must be provided.

 -Planning Approvals: The redevelopment must result in a livable community, and one which complements the surrounding neighbourhood. The City expects its normal planning approval process will be followed, but will endeavor to expedite that process to the extent possible. This approval process will likely entail an Official Plan Amendment, a site-specific rezoning, the subdivision of the land, and development review. These approvals may be dealt with simultaneously, under one application.

 -City Contributions to the Redevelopment: The Province has indicated, in its RFP, that it wishes the proposed undertaking to be Aexpenditure neutral@ from its point of view. The City is being asked to give up its reversionary interest in the land in the north-east quadrant. The value of the City=s reversionary interest in the remainder of the land will likely increase in the future if the redevelopment proceeds and moves into further phases. In addition, the City may be requested to front-end infrastructure costs, and to forego various development charges. If the City is formally requested to contribute financially to the transformation of part of North Regent Park, our position should be that it is reasonable to expect equivalent contributions from senior governments. The City=s position should be Aexpenditure equal@ with the other levels of government.

 -General Issues: The Province and the developer have been made aware that the City is prevented, under Section 111 of the Municipal Act, from bonusing private developers, by assisting a commercial enterprise, either directly or indirectly.

 The City has indicated that it wishes to be kept apprised of Agreements between the Province and the developer. In general, we are looking for a full and open exchange of information, past and future. There is no hard information presently available regarding the costs or financial viability of the proposed redevelopment, the anticipated schedule, nor the proposed plan. All this material is required to evaluate the costs and benefits of the proposal, and for the City to make a decision regarding the Province=s request that it relinquish its reversionary interest in the site.

 The position that the City is putting forward here relates only to the proposed redevelopment of the quadrant bounded by Gerrard, River, Oak and Sumach Streets. If redevelopment continues in subsequent phases, the City reserves the right to reassess its goals, objectives and requirements, and to make such changes as it deems necessary or desirable.

 We are aware that all parties, and, in particular, the residents of North Regent Park, are anxious that decisions be made as quickly as possible to advance the proposed redevelopment. The City=s willingness to relinquish its reversionary interest in the land is a key to allowing the redevelopment to proceed. Staff should be requested to report back within two months on the progress of the negotiations between the parties, and the extent to which they are satisfactorily addressing the City=s goals and objectives for the redevelopment.

 Conclusions:

 The redevelopment of part of North Regent Park will represent a significant benefit to the local community, and to the City. These benefits will include the amelioration of an area currently in need of upgrading; its reintegration with the surrounding communities, both through plan changes and the addition of ownership units to create a mixed-income neighbourhood; the introduction of additional retail space on a main street; the expansion of the City=s tax base; and, in the longer term, the creation of greater value in the City=s reversionary interest in the balance of the Regent Park land.

 If this first phase of redevelopment can be successfully accomplished, and lead to the ultimate redevelopment of the entire area, the benefit will increase more than proportionately. In addition, the successful realization of this redevelopment will be a precedent for similar undertakings all across Canada. Therefore, it is in the City=s interest to encourage the proposal, and to take such steps as it may deem appropriate to help bring it about. Staff should continue to work with the Province and their development partner, and be instructed to report further as the plan and implementation proposals evolve.

 Contact Name:

 Ross Winter

Tel: 416-392-6614/Fax: 416-392-0560

 The following persons appeared before the Community and Neighbourhood Services Committee in connection with the foregoing matter:

 -Ms. Debra Dineen, resident of Regent Park;

-Mr. Mohammed Mohammed, resident of Regent Park;

-Councillor Pam McConnell, Don River; and

-Councillor Jack Layton, Don River.