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HomeMy WebLinkAboutCAO 05-23Report to Council Report Number: CAO 05-23 Date: March 27, 2023 From: Marisa Carpino Chief Administrative Officer Subject: City Centre Project - Options Analysis Study, Cost Estimates and Financial Implications - File: A-1200-001-23 Recommendation: 1. That Report CAO 05-23, regarding the City Centre Project Option Analysis Study, Cost Estimates and Financial Implications, be received; 2. That Council endorse Option D in the City Centre Project Option Analysis Study set out in Attachment 1, recommended by KPMG and Hariri Pontarini Architects (HPA), as the preferred option for the next phase of analysis regarding the City Centre Project; 3. That staff be directed, in accordance with Purchasing Policy 10.03 (c) of Purchasing Policy PUR 010, to retain KPMG for a fee of $450,000 and an administration fee of up to 7 percent plus applicable HST to be charged to General Government Consulting to conduct a detailed analysis of the preferred option to be presented to Council in Q1 2024, as per their fee proposal set out in Attachment 2; and, 4. That the appropriate officials of the City of Pickering be authorized to take the necessary actions as indicated in this report. Executive Summary: The City of Pickering has pursued the realization of a City Centre vision in its downtown since 2017. By late 2018, City staff were working in collaboration with Ontario Pension Board Realty Inc. (OPB Reality Inc., owners of Pickering Town Centre (PTC) to introduce three new municipally owned and operated community facilities (Library, Youth & Seniors Centre, Performing Arts Centre), Public Square and Public Realm in concert with high rise residential developments by OPB through a swap of land owned by each party. With the onset of the pandemic, the City Centre project was put on pause by Council in April 2020 due to the economic uncertainty presented by COVID. After restarting work on the project in October 2021 and establishing a project cost ceiling of $207.7M, the City Centre project was once again paused by Council on March 11, 2022 when preliminary project costs reached $236M due to rising construction material and labour costs associated with a COVID and post-COVID environment. The Council approved DC Study (July 2022) included a revised cost of $266.1 million. In an effort to realize the City Centre project in a financially sustainable manner, the City set out to assess how leveraging City owned lands on Esplanade South could capture the value of residential development opportunity, subsidize overall project costs and optimize construction cost synergies between civic facilities envisioned in the City Centre project. To that end, as per CAO 05-23 March 27, 2023 Subject: City Centre Project Page 2 Resolution #963/22 from July 11, 2022 and Resolution #997/22 from September 22, 2022, Council directed staff to retain KPMG and Hariri Pontarini Architects (HPA) to generate a design concept and proposed project transaction structure for Options B, C and D. The description of the three design options are as follows: Option B – Legacy Revisited Concept: The City and PTC would swap the City owned lands with PTC owned lands and the City receive the lands (west of Glenanna Road) as parkland dedication from PTC. This option is subject to negotiation and agreement between PTC ownership and the City. Option C – Multiplex Concept: The City receives parkland dedication lands (west of Glenanna Road) as part of PTC development and City would sell South Block (south of Esplanade South) to subsidize project costs. Option D – Facilities on the Park Concept: The City connects Esplanade Park, an important component to establishing a city centre, by relocating Esplanade South to the south and introducing the Library and Seniors & Youth Centre adjacent to the park, creating a view from Glenanna Rd. As is evident, Options C and D leverages City owned land on Esplanade South by working with a development partner to introduce residential development and thereby subsidize the City’s overall project cost. The results of KPMG’s study is outlined in “Pickering City Centre Options Analysis Study” dated March 27, 2023, as set out in Attachment 1. In short, Option B has limitations for residential development potential and requires negotiation with PTC ownership and has the highest cost. Option C has the lowest cost but results in losses to the full functional requirements of the City facilities. Option D provides the next lowest funding requirements, without the loss to the full functional requirements of City facilities and creates a heart in the downtown. In the end, Option D is option recommended by KPMG and HPA as it delivers on the City Centre vision for three municipally owned and operated facilities with a phased-in construction model, and is supported by a public space/square that allows for Esplanade Park and a new park west of Glenanna Road to be animated year round. Subject to Council’s approval of Report CAO 05-23, the next phase of the City Centre Project pre-development process is to contract KPMG at a fee of $450,000 plus HST and 7 percent administration fee to conduct a detailed analysis of the preferred option. This scope of work will include the design of facility floorplates to fully consider program requirements; stakeholder and community engagement; and, the development of a business case with updated designs, financial analysis, and provide recommendations on preferred partnership and governance structures. When the findings are returned in Q1, 2024, Council will be presented with the opportunity to approve the recommendation for preferred option and approve proceeding to procurement and finding the right development partner. CAO 05-23 March 27, 2023 Subject: City Centre Project Page 3 Financial Implications: A financial history of the City Centre project is presented below. City Centre Financial History The 2022 DC Study, approved by Council (in July), included a revised cost of $266.1 million for the City Centre project. Over the project’s three year history, the cost estimates have increased by 98.4 percent or almost doubled. It is anticipated that the actual final cost would have been higher. The City Centre project, at an estimated cost of over $266.1 million, would have caused financial stress to the Corporation and likely deferred other valuable capital projects. From a financial lens, you cannot view the City Centre project as an island. You have to consider this project in the context of all of the other valuable and beneficial projects for Pickering residents. The current estimate for the former City Centre project is high, and when added to the other major capital projects, both growth related and infrastructure renewal, the end result is that the City, would have been in a very challenging financial position. One of the major financial advantages of Option D, is the ability to phase the City Centre development. As the cost of the City Centre project was increasing, it was apparent to senior financial staff that a cost mitigation strategy had to be considered. The selected option was to introduce project phasing that would allow the City, over time, to complete the project and more importantly to manage the project cost and corresponding debt financing at a more controllable pace resulting in a lower level of financial stress. From October 2021 to March 2022, several times, finance staff asked if the project could be phased and were advised that it could not by our then partner and development. The financial phasing strategy would have been very beneficial to the City due to the fact, the project would have been able to progress, at a pace $100,000,000 $150,000,000 $200,000,000 $250,000,000 $300,000,000 July 2019 February 2020 October 2021 March 2022 July 2022 (DC Study) Cost Estimates ($) $134.1 M $266.1 M CAO 05-23 March 27, 2023 Subject: City Centre Project Page 4 that would have allowed the City to consider other projects while operating within its debt capacity limit as prescribed by the Province. On February 6th of this year, the City started the second phase of its 2023 budget engagement process. (This budget engagement exercise concluded on March 12th.) One of the topic questions asked in the survey, was related to increasing capital project costs and possible measures to control costs. The results of the survey are presented below: Capital Project Cost Control Preferences Survey Results (February 6 to March 12, 2023) As the above chart, indicates, 77.20 percent of Pickering residents would like the City to implement a cost control strategy when dealing with higher capital project costs. In early summer of last year, senior staff introduced a concept that that the City consider a strategy to address the project from a financial and functional operational review. The result of this work resulted in the City hiring KPMG Global Infrastructure Advisory in approximately September 2022. Their mandate was to explore various options while maintaining program functionality and to deliver a more cost effective solution as it relates to the City Centre project. Option D, represents, an enhanced City Centre project while maintaining financial flexibility 56.40% 20.80% 22.90% Modify Project To Control Costs Delay Project Continue & Accept Higher Costs Funded from Taxes CAO 05-23 March 27, 2023 Subject: City Centre Project Page 5 and affordability. To put another way, Option D, provides the City with the financial savings and flexibility through project phasing and combining buildings to control the project’s development while considering other worthwhile capital project investments. It is the opinion of the consultant team and City staff that Option D represents the best solution for the City. However, there is need for some additional work to be undertaken before a final decisions can be made. When considering important capital projects and or investments, there are always several factors to consider. The financial lens is important, due to the fact, at the end of the day, the project’s cost has to be paid and by default it is the local taxpayer who bears the most risks. The City’s philosophy or approach for capital project financing has always been to use property tax dollars as the measure of last resort. Therefore, when considering the City Centre, the financial strategy (in priority sequence) was always grants, development charges (DC) and the last financing source was property taxes. Table One below, provides a summary of the City Share (property tax funding) for Option D. Table One Estimated Preliminary City Share Funding Percentage The Senior & Youth Centre has the lowest cost to the Pickering taxpayer due to the fact, it is viewed and or seen as a growth related capital project and therefore, attracts a high level of DC funding. This high level of DC funding, encourages, where possible, the sharing of space with the Library. There is a financial challenge with the Library due to the fact that only the growth related share of the new building is eligible for DC funding. (Development Charge funding can only be applied to the “growth related” capital costs). Under Option D, the new Central Library square footage is 45,000 (SF) and the old Library is 34,165 (SF). Therefore, it is only the growth component of 10,835 (SF) that is eligible for DC funding. It is interesting to note, that the library component for the planned Seaton Community Centre is 100 percent eligible for DC funding. In other words, every square foot of the Seaton Library is eligible for DC funding in contrast to the Central Library project. The Performing Arts Centre, has the highest taxpayer cost. Under the Development Charges Act, cultural spaces such as art galleries, museums and theatres are not eligible for DC funding. However, City staff were able to introduce the concept of “community room programming” into the project design that was eligible for DC funding. The financial attractiveness of this project would increase, if the City would be able to obtain senior government grant funding at the 66 cents dollar level. In other words, the traditional City Share Major Components % Senior & Youth Centre 2.50% Library 32.48% Performing Arts Centre 71.73% CAO 05-23 March 27, 2023 Subject: City Centre Project Page 6 grant funding for these types of projects has been one-third Province, one-third Federal Government and the municipality would fund the remaining costs. The cost associated with Recommendation #3 of this report, would be funded from the casino reserve from the funds collected in 2022. In addition, it should be noted, that there would be additional operating costs associated with the City Centre buildings that will be discussed in future reports. Discussion: Since 2017, the City of Pickering has been crafting a City Centre vision in its downtown. Originally, the vision leveraged 2.2 acres of City owned land located on Esplanade South in the City Centre to introduce a new Seniors & Youth Centre, new Arts Centre and an expanded Public Library through a private/public partnership to construct the facilities and introduce towers. However, by October 2018, with the demolition of the Sears wing at PTC and at the direction of Council (Report CAO 08-18; Resolution #487/18), City staff embarked a refined City Centre vision in collaboration with Ontario Pension Board Realty Inc. (OPB Reality Inc., owners of PTC). This vision introduces three new municipally owned and operated community facilities (Library, Youth & Seniors Centre, Performing Arts Centre), Public Square and Public Realm in concert with high rise residential developments by OPB, as part of a larger Master Plan design to create a dynamic and vibrant City Centre ideal for live, work and play. Staff were given direction to negotiate with OPB on the City Centre vision and the transfer of lands and begin the schematic design phase of the project. Since then, the design for the City Centre facilities and the negotiations regarding the land swap with OPB Realty were underway. Unfortunately, the City Centre Project was paused in April 2020 due to economic uncertainty as a result of the pandemic (Report FIN 05-20; Resolution 284/20). Some aspects of the City Centre Project were undertaken in May 2021 (CAO 04-21; Resolution #604/21) to include an updated project cost estimate. With Council approval of Report FIN 15-21 (Resolution #700/21) in October 2021 and Report LEG 19-21 (Resolution #722/21) in November 2021, the City Centre project was restarted to meet the April 2022 timelines for the awarding of the construction contracts for City Centre and established a cost ceiling for the City Centre project at $207.7M. In early 2022, the preliminary City Centre project costs were estimated at $236M as impacted by rising construction material and labour costs associated with the COVID and post-COVID environment. As a result, on March 11, 2022, Council directed staff to defer any ongoing work on the City Centre Project pending further Council direction and amend the draft 2022 Capital and Current Budget and 2023 Capital Budget Forecast to reflect the deferral (Resolution #833/22). In an effort to realize a City Centre vision in a manner that is financially sustainable with the opportunity for phased-in construction of the City’s three municipal facilities, the City set out to assess how leveraging City owned lands on Esplanade South could capture the value of residential development opportunity to subsidize overall project costs and optimize construction cost synergies between civic facilities envisioned in the City Centre project. To that end, as per Resolutions #963/22 from July 11, 2022 and #997/22 from September 22, CAO 05-23 March 27, 2023 Subject: City Centre Project Page 7 2022, Council directed to retain KPMG and Hariri Pontarini Architects to generate a design concept and proposed project transaction structure for Options B, C and D. Option B – Legacy Revisited Concept: The City and PTC would swap the City owned lands with PTC owned lands and the City receive the lands (west of Glenanna Road) as parkland dedication from PTC. This option is subject to negotiation and agreement between PTC ownership and the City. Option C – Multiplex Concept: The City receives parkland dedication lands (west of Glenanna Road) as part of PTC development and City would sell South Block (south of Esplanade South) to subsidize project costs. Option D – Facilities on the Park Concept: The City connects Esplanade Park an important component to establishing a city centre by relocation Esplanade South to the south and introducing the Library and Seniors & Youth Centre adjacent to the park and creating a view from Glenanna Rd. The consultants have been working since that time, in consultation with the City’s senior project team, to complete their work. The consultants work plan included the following steps:  Functional Program  Value and Cost Savings  Planning Framework  Market Sounding  Architectural Concept  Potential Transaction Structure The functional requirements for the option analysis of the City Centre Project were generally consistent with the City’s original City Centre vision which includes the following: 1. New Central Library (approx. 45,000 sq. ft.) 2. New Seniors & Youth Centre (SYC) (approx. 60,000 sq. ft.) 3. New Performing Arts Centre (PAC) (approx. 40,000 sq. ft.) 4. New Public Square 5. New Administration Space Expansion (approx. 10,000 – 15,000 sq. ft.) 6. Residential Development that could be used to provide financial support for the City Centre Project. To assess the design options, KPMG established a set of twelve guiding principles that define great public spaces and city centres. They include the following: CAO 05-23 March 27, 2023 Subject: City Centre Project Page 8 Great City Centre: Placemaking and prioritizing the citizens of Pickering Business continuity: Keeps operations running during construction (e.g., library) Mobility: Provides adequate access, inclusive environment and parking for users Delivery controls: City has transaction and delivery control Iconic design: Gives the city centre an identity Loading and logistics: Enables building services Space flexibility: Spaces can be repurposed as programming evolves in future Active spaces: Optimizes programming for active space Sustainability: Demonstrates leadership in sustainable and green construction Program synergies: Optimizes programmatic use across spaces Parkland spaces: Provides both green and hard spaces Construction synergies: Provides cost savings The results of KPMG’s study is outlined in “Pickering City Centre Options Analysis Study” dated March 27, 2023, as set out in Attachment 1, and as summarized below: Option B – Legacy Revisited Concept: Option B creates synergies between the Library and SYC and has residential development as standalone to simplify the ownership, development and parking. However, no value is generated from south block due to land swap. This option realizes 7 of the 12 guiding principles. Option B envisions the delivery of the project through 4 phases and needs to be studied. The costs outlined are preliminary estimates and do not constitute a detailed cost estimate. Phase Description Timing Net Project Cost Phase 1 Conduct site servicing and construct new above grade parking behind CHDRC 2025- 2026 $37.7M Phase 2 Relocate the Bell vault, construct the integrated Library and SYC, construct below grade parking and sell land for residential development 2026- 2028 $142.5M Phase 3 Renovate the current Library for administrative expansion, update CHDRC façade and city hall façade 2028 $23.0M Sub Total $203.2M Phase 4 Construct the PAC and any required surrounding improvements 2030- 2031 $75.2M Total $278.4M CAO 05-23 March 27, 2023 Subject: City Centre Project Page 9 Option C – Multiplex Concept: Option C improves upon Option B by using City owned lands, creating more building synergies and optimizing parkland dedication. However, there is loss of full functional requirements for a single facility to ensure proportionality with City Hall and also potential noise challenges between quiet and active spaces. This option realizes 7 of the 12 guiding principles. Option C envisions the delivery of the project through 4 phases and needs to be studied. The costs outlined are preliminary estimates and do not constitute a detailed cost estimate. Phase Description Timing Net Project Cost Phase 1 Construct the park west of Glenanna Rd. including below grade parking, water feature etc. 2026 $25.1M Phase 2 Relocate the Bell vault, construct the integrated Library, SYC and administrative expansion space, sell south block land for residential development, develop the park west of Glenanna Rd., construct below grade parking. 2026- 2028 $68.4M Phase 3 Update the City Hall façade 2028 $5.0M Sub Total $98.4M Phase 4 Construct the PAC, update the CHDRC façade, construct below grade parking, and construct new above grade parking behind CHDRC. 2030- 2031 $115.5M Total $213.9M Option D – Facilities on the Park Concept: Option D improves upon Option C, by leveraging City owned south block lands providing strong views of the Esplanade Park from Glenanna Rd and providing larger Library and SYC footprint improving park views. This option realizes 12 of the 12 guiding principles. Option D envisions the delivery of the project through 4 phases and needs to be studied. The costs outlined are preliminary estimates and do not constitute a detailed cost estimate. Phase Description Timing Net Project Cost Phase 1 Construct the park west of Glenanna Rd. including a refrigerated ice surface and support facility in the winter and water feature in the summer. 2025- 2026 $10.0M Phase 2 Relocate the Bell vault, move Esplanade South, construct the integrated Library and SYC, sell air rights for residential development, construct below grade parking. 2026- 2028 $116.3M Phase 3 Update the City Hall façade, renovate the current Library site for administrative expansion. 2029 $16.0M Sub Total $142.3M Phase 4 Construct the PAC, update the CHRDC façade, construct below grade parking, and construct new CHDRC parking. 2030- 2031 $115.5M Total $257.8M CAO 05-23 March 27, 2023 Subject: City Centre Project Page 10 When considering the findings of the analysis for Options B, C and D, Option B has limitations for residential development potential and requires negotiation with PTC and has the highest cost. Option C has the lowest cost but results in losses to the full functional requirements of City facilities. Option D provides the next lowest funding requirements, without the loss to the full functional requirements of City facilities and creates a heart. Clearly, Option D is option recommended by KPMG and HPA as it delivers on the City Centre vision for three municipally owned and operated facilities, supported by a public space/square that allows for Esplanade Park and a new park west of Glenanna Road to be animated year round. It also allows for phased-in construction with the introduction of a new full season park west of Glenanna Road during phase 1 (2026) featuring a refrigerated ice surface with support facility for winter enjoyment and a water feature and farmers market for summer enjoyment. Subject to Council’s approval of Report CAO 05-23, the next phase of the City Centre Project pre-development process is to contract KPMG, in accordance with Purchasing Policy 10.03 (c) of Purchasing Policy PUR 010, at a fee of $450,000 plus HST and 7 percent administration fee to conduct a detailed analysis of the preferred option. This scope of work will include the design of facility floorplates to fully consider program requirements; stakeholder and community engagement; and, the development of a business case with updated designs, financial analysis, and provide recommendation on preferred partnership and governance structures. When the findings are returned in Q1, 2024, Council will be presented with the opportunity to approve the recommendation for preferred option and approve proceeding to procurement and finding the right development partner. Attachments: 1.Pickering City Centre Options Analysis Study, dated March 27, 2023 by KPMG and Hariri Pontarini Architects 2.Fee Proposal for consulting services by KPMG Prepared/Approved/Endorsed By: Stan Karwowski Director, Finance & Treasurer Marisa Carpino, M.A. Chief Administrative Officer Original Signed By: Original Signed By: CAO 05-23 March 27, 2023 Subject: City Centre Project Page 11 :mc Recommended for the consideration of Pickering City Council Marisa Carpino, M.A. Chief Administrative Officer Original Signed By: Pickering City Centre Options Analysis Study City of Pickering PUBLIC COUNCIL PRESENTATION March 27, 2023 Attachment #1 to CAO 05-23 2Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Disclaimer This document (“Document”) has been prepared by KPMG LLP (“KPMG”) for the City of Pickering (“Client”) pursuant to the terms of the engagement agreement dated the 14th of October, 2022 (the “Engagement Agreement”). KPMG neither warrants nor represents that the information contained in this document is accurate, complete, sufficient or appropriate for use by any person or entity other than Client or for any purpose other than set out in the Engagement Agreeme nt. This document may not be relied upon by any person or entity other than Client, and KPMG hereby expressly disclaims any and all responsibility or liability to any person or entity other than Client in connection with their use of this document. The procedures we performed do not constitute an audit, examination or review in accordance with standards established by the Chartered Professional Accountants of Canada, and we have not otherwise verified the information we obtained or presented in this Document. We express no opinion or any form of assurance on the information presented in the Document and make no representations concerning its accuracy or completeness. We also express no opinion or any form of assurance on potential costs that Client may realize should it decide to implement the options and considerations contained within this Document. Th e Client is responsible for the decisions to implement any options and for considering their impact. 3Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Agenda 01 Overview 4 02 Vision for a Great City Centre 12 03 Detailed Concepts and Analysis of Options 23 04 Project Phasing 66 05 Decision Framework 73 06 Potential Partnership Structures 75 07 Next Steps and Pre-Development Process 80 Overview 5Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Current Status: On Hold Seeking Council Direction The Pickering City Centre (“PCC”) project has been ongoing for some time, as the City initially intended to deliver the project through Option A, a deal with Pickering Town Centre. It is currently on hold seeking new direction. Project Cost Estimate: $236M+ (2021 dollars) Pickering City Centre Project Background Option A: Legacy ConceptThe City identified a need for the PCC project 2018: City received proposal from OPB Realty Inc. owner of Pickering Town Centre (“PTC”) which included concept of land exchange and PTC managing construction 2019: Established non-binding memorandum of understanding with PTC for land exchange and development (Option A) 2020: Architects completed detailed drawings for cost estimates and for requesting pricing from contractors. 2021:Construction Manager tendered drawings for costing 2022:Project put on hold due to cost 6Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Pickering City Centre Functional Requirements Pickering has a vision to develop a culture hub, that provides a collection of spaces to allow residents to grow culturally, academically and physically. The objective of the central hub is to form a great city centre with new facilities. New Central Library (45,000-50,000 square feet (“sf”)) Performing Arts Centre (“PAC”) (38,000-40,000 sf) New Seniors Youth Centre (“SYC”) (60,000 -65,000 sf)New Public Square Administrative Space Expansion (10,000 -15,000 sf) Public Amenities (service counter & washrooms) Note: the square footage of the facilities have been estimated based on other studies conducted by Pickering. Residential Development | Could be used to provide financial support for the PCC project. 7Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Pickering has many goals for the PCC project. Goals for the PCC Project Reduced Risk and Simple Structure Deliver the project through a simple partnership structure to reduce project risk. Financial Sustainability Capture value of residential development opportunity and optimize construction cost synergies between civic facilities envisioned in the PCC project. Space Flexibility and Synergies Build flexible spaces with synergies between requirements –library, administration space expansion and SYC. Sustainability Leadership “Our time is now” to be a leader in sustainability as reference point for future City development and source of pride. Cultural Hub Develop a cultural hub to s erve citizens better and provide them with space that enables socialization, access to culture, etc. 8Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Lands in Consideration for PCC Project Pickering Town Centre Recreation Complex Va l l e y F a r m R o a d Esplanade South City Council directed KPMG and Hariri Pontarini Architects to perform an options analysis study considering the following lands. Current Library Site Gravel Parking Recreation Complex Parcel 2.5 acresSouth Block 2.8 acres PTC Lands 2.5 acres Parkland Dedication 1.7 acres 9Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Key Options for the PCC Project The options analysis study assesses three alternative options for the PCC project. Pickering Town Centre Va l l e y F a r m R o a d Esplanade South Option C: Multiplex Concept Option D: Facilities on Park ConceptOption B: Legacy Revisited Concept Option A (Recap): Legacy Concept Recreation Complex 10Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. The following high-level process is envisioned for Pickering to execute the pre -development process. Pre-Development Process Overview for PCC Project Stage 1: Option Analysis Study Stage 2: Analysis of Preferred Option Stage 3: Finding the Right Developer Partner Steps: •KPMG/HPA complete Options Analysis Study that includes high- level architectural concepts and project economics Action: •Council to: o select a preferred option for further study o approve funding and further analysis for preferred option Steps: •Support two phased procurement process (e.g., RFQ, RFP) •Support evaluation •Support negotiation with preferred developer partner Action: •Workshop partnership principles •Approve procurement documentation •Approve recommendation for preferred partner and to commence negotiation We are here Pre-Development Process Steps: •KPMG/HPA to conduct design of facility floorplates to fully consider program requirements •City with support from KPMG/HPA to conduct stakeholder and community engagement •KPMG/HPA to produce business case with updated designs, financial analysis, and provide recommendation on preferred partnership and governance structures. Action: •Council to: o approve recommendation for preferred option o approve proceeding to procurement 11Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Step 1: Functional Requirements Identify the functional requirements for City and community needs Step 2: Planning Framework Review the legal planning framework Step 4: Net Project Cost Analyze and estimate potential project cost value based on preliminary architectural concepts accounting for recent legislative changes Step 5: Market Sounding Perform market sounding of developers and investors Step 6: Potential Partnership Structure Develop framework for city centre project Step 7: Report Development Develop report for mandate, identify next steps and present to Council Step 3: Architectural Concept* Provide preliminary architectural massing, and rendering concepts The following approach was followed by KPMG and HPA to deliver the options analysis study mandate. Approach to Options Analysis Study *The preliminary architectural concepts show the basic blocking for the design but do not consider the detail of the floor layouts within the blocks to show (e.g., how double gym/pickle ball courts would be incorporated into concept block). Vision for a Great City Centre 13Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Vision for a Great City Centre Pickering has a BOLD vision to transform its city centre with the development of several municipal facilities, leveraging current City properties. Spaces to create a four season destination Space to gather Spaces for leisure Spaces for celebrations 14Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Space to Gather Tobin Centre, San Antonio, TX Union Square, New York City, NY *Sources: TripAdvisor, LMN Architects 15Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Sundance Square Plaza, Fort Worth, TX Spaces for Leisure * Sources: City of Fort Worth (Sundance Square),Time Out (Lincoln Centre) , LMN Architects (Tobin) Lincoln Centre, New York City, NY Tobin Centre, San Antonio, TX 16Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Spaces for Celebrations *Sources: Time Out (Lincoln Centre), DotheOkanagan.com Okanagan, BC Lincoln Center, New York City, NY 17Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Nathan Phillips Square, Toronto, ON The Metropolitan Museum, New York City, NY Spaces to Create a Four Season Destination *Sources: Shutterstock (Nathan Phillips Square) and Metropolitan Museum of Art (Met Fountain) 18Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Spaces for a Farmer’s Market Farmer’s Market, Toronto, ON *Sources: BlogTO (Farmer’s Market in Davisville) 19Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Spaces for Community Events Food Trucks Holiday Market at Washington Square, New York City, NY *Sources: Shutterstock (Food Trucks) and Time Out (Washington Square Holiday Market) 20Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Connecting with Green Spaces James B. Hunt Library, Raleigh, NC Ivey School of Business, London, ON Ledding Library, Milwaukee, WI Capilano Library, Edmonton, AB *Sources: HPA (Ivey), Patkau Architects (Capilano Library), Arcdaily (Ledding Library), and Clarknexsen Architects (Hunt Library). 21Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Small Green Spaces for an Intimate Experience *Sources: Project for Public Spaces (Paley Park) Paley Park, New York City, NY 22Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Guiding Principles For PCC –Becoming a Great City Centre Business continuity | Keeps operations running during construction (e.g., library) Iconic design | Gives the city centre an identity Active spaces | Optimizes programming for active space Parkland spaces | Provides both green and hard spaces Great City Centre | Placemaking and prioritizing the citizens of Pickering Delivery controls | City has transaction and delivery control Space flexibility | Spaces can be repurposed as programming evolves in future Program synergies | Optimizes programmatic use across spaces Mobility | Provides adequate access, inclusive environment and parking for users Loading and logistics | Enables building services Sustainability | Demonstrates leadership in sustainable and green construction Construction synergies | Provides cost savings Twelve guiding principles were established to assess the options included in the study. Detailed Concepts and Analysis of Options 24Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Key Alternative Options for the PCC Project Council directed KPMG and HPA to perform an options study for three options outlined below. Option A (Recap): Legacy Concept Option B: Legacy Revisited Concept Option D: Facilities on Park ConceptOption C: Multiplex Concept 25Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Pickering Town Centre Esplanade North Esplanade South Option A –Legacy Concept Administrative Expansion Performing Arts Centre Senior Youth Centre Library Residential Development Above grade parking deck Land swap Restaurant and loading The City and PTC would swap the lands outlined in black (City owned) for those in red (PTC owned). This is subject to negotiation and agreement. Recreation Complex 26Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Pickering Town Centre Esplanade N Pickering deal with PTC SYC 65,000 sf GFA | 2 stories PAC 40,000 sf GFA | 2 stories Above Grade Parking 450 municipal parking stalls above grade PTC Lands 160 municipal parking spaces on PTC lands below grade Option A –Legacy Concept Library 47,000 sf gross floor area (“GFA”) 4 stories Admin. Expansion/Public Amenities 38,000 sf GFA | 2 stories Administrative Expansion Performing Arts Centre Senior Youth Centre Library Residential Development Above grade parking deck Land swap Restaurant and loading Recreation Complex Esplanade South 27Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option A –Massing Administrative Expansion Performing Arts Centre Senior Youth Centre Library 28Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option B –Legacy Revisited Concept Pickering Town Centre Administrative Expansion Performing Arts Centre Senior Youth Centre Library Residential Development Upgrades to Existing Bldg. Facades Above grade parking deck Land swap The City and PTC would swap the lands outlined in black (City owned) for those in red (PTC owned) and receive the lands in green (Parkland dedication from PTC). This is subject to negotiation and agreement. Recreation Complex Esplanade North Esplanade South 29Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option B –Legacy Revisited Concept PAC 40,000 sf GFA | 2 stories Residential 259,000 sf GFA | 26 stories Library/SYC 115,000 sf GFA | 2-3 stories Admin. Expansion/Public Amenities 38,000 sf GFA | 2 stories Pickering Land swap with PTC Above Grade Parking 450 municipal parking stalls above grade PTC Lands 160 municipal parking stalls below grade Update to City Hall/Recreation Complex Administrative Expansion Performing Arts Centre Senior Youth Centre Library Residential Development Upgrades to Existing Bldg. Facades Above grade parking deck Land swap Recreation Complex Esplanade South 30Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option B –Massing Administrative Expansion Performing Arts Centre Senior Youth Centre Library Residential Development Upgrades to Existing Bldg. Facades 31Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option B –Analysis Option B improves upon Option A. It creates synergies between the library and SYC and has residential development as standalone to simplify the ownership, development and parking. However, no value is generated from south block due to land swap. Great City Centre •Creates a new “district” for city amenities •No holistic masterplan Delivery controls •City owns land outright and controls all development •Residential development is standalone Space flexibility •No condo footprint over library/SYC •Library/SYC within same building, opportunity for flexibility Program synergies •Allows for synergies between PAC, SYC and Library program. •Offers proximity to mall traffic and Glenanna road Business continuity •Existing services remain operational during construction •Minimizes controversial perspectives -existing library Iconic design •Limited integration across all City lands to create iconic civic space Active spaces •Sufficient space for active spaces Parkland spaces •No dedicated park program Mobility •Separate parking for residential however, parking limits height of residential (value) Loading and logistics •Small, dense site with separate loading for facilities and residential •Library remains operational until new complete Sustainability •Potential for sustainability leadership •Proximity of facilities allows for shared systems Construction synergies •Library/SYC facilities within same building 32Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option C –Multiplex Concept Pickering Town Centre Administrative Expansion Performing Arts Centre Senior Youth Centre Library Residential Development Upgrades to Existing Bldg. Facades Above grade parking deck Parkland dedication and features The City receives parkland dedication lands (west of Glenanna) as part of PTC development and City would sell South Block to subsidize project costs. Recreation Complex Esplanade North Esplanade South 33Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option C –Multiplex Concept Pickering Town Centre SYC/Library/Admin. Expansion/Public Amenities 100,000 sf GFA | 3 stories | 225 municipal parking stalls below grade Pickering Sells South Block to Developer 1,359,600 sf GFA | 45 stories Parkland Dedication Water feature/skating rink, art installation, pavilion, infrastructure for farmers market, trees and 145 municipal parking stalls below grade PAC 40,000 sf GFA | 2 Stories | 120 municipal parking stalls below grade Above Grade Parking 300 municipal parking stalls above grade Update to City Hall/Recreation Complex Administrative Expansion Performing Arts Centre Senior Youth Centre Library Residential Development Upgrades to Existing Bldg. Facades Above grade parking deck Parkland dedication and features Recreation Complex Esplanade North Esplanade South 34Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option C –Massing Administrative Expansion Senior Youth Centre Library Residential Development Upgrades to Existing Bldg. Facades Parkland dedication and features 35Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option C –Rendering Option C – 36Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option C –Parkland Dedication 37Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option C –Multiplex 38Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option C –Analysis Option C improves upon Option B by using City owned lands, creating more building synergies and optimizing parkland dedication. However, there is loss of full functional requirements for a single facility to ensure proportionality with City Hall and also potential noise challenges between quiet and active spaces. Great City Centre •No holistic masterplan Delivery controls •City develops city-owned land •Residential development is standalone Space flexibility •Library/admin/SYC within same building, opportunity for flexibility Program synergies •Co-location of library, SYC and admin expansion allows for program overlap and efficiencies •Loss of full functional requirements given multiplex Business continuity •Library operations would be impacted due to development of current library site Iconic design •Library has potential to open up to west side of Esplanade Park •Controversy around removal of familiar city landmarks (library, clock tower) Active spaces •Complex layout for active spaces without exceeding City Hall height Parkland spaces •Dedicated parkland site opens programming opportunities Mobility •Dedicated parkland site provides parking below grade Loading and logistics •Complex logistics for library operations •Loading could be complex for all facilities in a single building Sustainability •Potential for sustainability leadership Construction synergies •Admin/library/SYC within same building 39Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –Activate Esplanade Park Connecting to Esplanade Park is an important component to establishing a city centre. Esplanade South 40Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –Activate Esplanade Park To connect to Esplanade Park, Option C considers relocating Esplanade South Road to the south. Esplanade South Road moves to the south Esplanade South 41Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –Activate Esplanade Park Relocating the road, helps activate Esplanade Park by creating a view from Glenanna Rd. Esplanade South Road moves to the south Creates view from Glenanna Rd. 42Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –Sketch 43Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –Facilities on Park Concept Esplanade North Esplanade South Pickering Town Centre Administrative Expansion Senior Youth Centre Library Residential Development Upgrades to Existing Bldg. Facades Parkland dedication and features Public square and water feature Above grade parking deck City receives Parkland dedication lands (west of Glenanna) as part of PTC development and City would sell air rights on South Block to subsidize project costs. Recreation Complex 44Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –Facilities on Park Concept Pickering Town Centre Admin. Expansion/Public Amenities 38,000 sf GFA | 2 Stories Library 45,000 sf GFA | 2 Stories | 435 municipal parking stalls below grade Residential Towers 794,400 sf GFA | 45 Stories | 2 towers PAC 40,000 sf GFA | 2 Stories | 120 municipal parking stalls below grade Above Grade Parking 300 municipal parking stalls above grade Senior Youth Centre 50,000 sf GFA | 2 Stories Parkland Dedication Water feature/skating rink, art installation, pavilion, infrastructure for farmers market, trees Update to City Hall/Recreation Complex Administrative Expansion Senior Youth Centre Library Residential Development Upgrades to Existing Bldg. Facades Parkland dedication and features Public square and water feature Above grade parking deck Recreation Complex Esplanade North Esplanade South 45Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –Below Grade Parking Library/SYC 290 spots -2 levels Residential 400 spots -4 levels Library Parking Residential Development Parking Parkland Dedication Parking 46Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –Massing Administrative Expansion Senior Youth Centre Library Residential Development Upgrades to Existing Bldg. Facades Parkland dedication and features Public square and water feature 47Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Esplanade North Esplanade South Parkland Dedication –Water Feature Sugar Beach, Toronto *Sources: Waterfront Toronto, Bramptonist Brampton, ON The water feature could be enabled/disabled for wet, dry or skating programming purposes. Community consultation opportunity through the Parks Masterplan. Administrative Expansion Library Upgrades to Existing Bldg. Facades Parkland dedication and features Public square and water feature 48Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Parkland Dedication –Parkland and Celebration Space Toronto Music Garden MoMA Sculpture Garden Parkland and celebration space can be offered on both green and hard scape. Community consultation opportunity through the Parks Masterplan. Esplanade North Esplanade South *Sources: BlogTO, MoMA Administrative Expansion Library Upgrades to Existing Bldg. Facades Parkland dedication and features Public square and water feature 49Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Parkland Dedication –Farmer’s Market and Leisure Space Lincoln Centre Green City Market, Chicago Esplanade North Esplanade South Flexible space allows for leisure, a farmer’s market and other programming. Community consultation opportunity through the Parks Masterplan. *Sources: The Cultural Landscape Foundation, Green City Market Administrative Expansion Library Upgrades to Existing Bldg. Facades Parkland dedication and features Public square and water feature 50Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Parkland Dedication –Pavilion Nathan Phillips Square, Toronto Esplanade North Esplanade South A building to support the ice rink, provide washrooms and potential concession . Community consultation opportunity through the Parks Masterplan. *Sources: Plant Architecture Administrative Expansion Library Upgrades to Existing Bldg. Facades Parkland dedication and features Public square and water feature 51Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Parkland –Intimate Space World Trade Centre, NYC Paley Park, NYC Esplanade North Esplanade South An area for gatherings and also provides flexibility for programming. Community consultation opportunity through the Parks Masterplan. *Sources: Untapped NY, Administrative Expansion Library Upgrades to Existing Bldg. Facades Parkland dedication and features Public square and water feature 52Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Parkland –Art Installation Madison Square Park, NYC *Sources: Madison Square Conservancy An art installation to display public art or create a community sculpture. Community consultation opportunity through the Parks Masterplan. Esplanade North Esplanade South Administrative Expansion Library Upgrades to Existing Bldg. Facades Parkland dedication and features Public square and water feature 53Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –PCC Project Facing South-West 54Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –PCC Project Facing West 55Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –PCC Project Facing South 56Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –PCC Project Facing South-East 57Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –PCC Project Facing East 58Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –Rendering (Summer)Option D –Parkland Dedication 59Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –Parkland Dedication (Summer) 60Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –View from South Esplanade (Summer) 61Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –Library/SYC next to Esplanade Park (Summer) 62Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –Rendering (Winter)Option D –Parkland Dedication 63Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –Parkland Dedication (Winter) 64Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –View from South Esplanade (Winter) 65Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –Analysis Option D improves upon Option C, by leveraging City owned south block providing strong views of the Esplanade park from Glenanna Rd and providing larger library/SYC footprint improving park views. Great City Centre •Forms a cohesive centre of Pickering leveraging all lands Delivery controls •City develops city-owned land Space flexibility •Library/SYC within same building, opportunity for flexibility Program synergies •Co-location of library and SYC allows for program overlap and efficiencies Business continuity •Existing services remain operational during construction •Minimizes controversial perspectives -existing library Iconic design •Library has potential to open up to south end of Esplanade Park Active spaces •Sufficient space for active spaces Parkland spaces •Dedicated parkland site opens programming opportunities Mobility •Dedicated parkland site provides parking below grade Loading and logistics •Separate loading for residential and facilities from Esplanade South •Library remains operational until new complete Sustainability •Potential for sustainability leadership demonstrated in project Construction synergies •Library/SYC within same building Project Phasing 67Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Net Project Cost Estimate Assumptions The net project costs are preliminary and do not constitute a detailed cost estimate. Costs have been derived based on preliminary concepts and not full design.As the design evolves costing will become more defined. •A cost consultant provided construction costs and adjustments for soft costs and contingency applied based on estimate for comparable projects. Costs include: •Total costs for municipal facilities •Less attributable land value •Costs for additional capital projects (approx.): •The above grade parking deck behind Recreation Complex •The renovation for the administrative space •The re-location of the Bell vault •The parkland improvements •Upgrades to City Hall and Recreation Complex façade Total project costs do not consider sources of funding (e.g., developer contributions, grants or development charges). The potential development charge eligibility has been determined separately by Watson & Associates. The net project costs are preliminary and do not constitute a detailed cost estimate. 68Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Conceptual Project Phasing –Option B Pickering Town Centre Rec Centre Esplanade N Esplanade S Pickering Town Centre Esplanade North Esplanade South Phase 1: Conduct site servicing and construct new above grade parking behind Rec. Complex Phase 2: Relocate the Bell vault, construct the integrated library and SYC, construct below grade parking and sell land for residential development Phase 3: Renovate the current library for administrative expansion, update the Recreation Complex façade and city hall façade Phase 4:Construct the PAC and any required surrounding improvements 2 2 3 3 3 1 1 4 Net Project Cost Estimate ($M)* Phase 1 (2025-2026) Phase 2 (2026-2028) Phase 3 (2028) Sub-total Phase 4 (2030-2031) TOTAL $37.7M $142.5M $23.0M $203.2M $75.2M $278.4M Option B envisions the delivery of the project through 4 phases and needs to be studied. The costs outlined are preliminary estimates and do not constitute a detailed cost estimate. Administrative Expansion Performing Arts Centre Senior Youth Centre Library Residential Development Upgrades to Existing Bldg. Facades Above grade parking deck * Net project cost is preliminary and an estimate. It does not constitute a detailed cost estimate. It is net of land value but does not include development charges. Recreation Complex 2 69Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Conceptual Project Phasing –Option C Esplanade North Esplanade South Pickering Town Centre 2 3 4 4 1 4 22 Phase 1: Construct the park west of Glenanna including below grade parking, water feature etc. Phase 2: Relocate the Bell vault, construct the integrated library, SYC and administrative expansion space, sell south block land for residential development, develop the park west of Glenanna, construct below grade parking. Phase 3: Update the city hall façade Phase 4:Construct the PAC, update the Recreation Complex façade, construct below grade parking, and construct new above grade parking behind Recreation Complex. Net Project Cost Estimate ($M)* Phase 1 (2026) Phase 2 (2026-2028) Phase 3 (2028) Sub-total Phase 4 (2030-2031) TOTAL $25.1M $68.4M $5.0M $98.4M $115.5M $213.9M * Net project cost is preliminary and an estimate. It does not constitute a detailed cost estimate. It is net of land value but does not include development charges. Option C envisions the delivery of the project through 4 phases and needs to be studied. The costs outlined are preliminary estimates and do not constitute a detailed cost estimate. Administrative Expansion Performing Arts Centre Senior Youth Centre Library Residential Development Upgrades to Existing Bldg. Facades Above grade parking deck Parkland dedication and features Recreation Complex 70Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option C –Preliminary Parking Layout 135 paved 234 surface 145 Below grade (1 level)300 Deck (2 levels) 100 gravel 120 Below grade (PAC) (1 level) 225 Below grade (SYC/Library/Admin) (3 levels) Phase 4 >< Phases 1 to 3 Option C estimated Phases 1 to 3 Phase 4 Total Existing parking 190 334 524 New programming parking 180 87 267 Total Need 370 421 791 Parking Allocation 370 420 790 Net new parking for SYC, Library, Admin and PAC is about 267 shared spaces. Parking below Parkland Dedication may be better located below SYC/library. The parking layout is preliminary and requires a detailed parking study that will be completed in the next phase of analysis . 71Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Conceptual Project Phasing –Option D Esplanade North Pickering Town Centre Net Project Cost Estimate ($M)* Phase 1 (2025-2026) Phase 2 (2026-2028) Phase 3 (2029) Sub-total Phase 4 (2030-2031) TOTAL $10.0M $116.3M $16.0M $142.3M $115.5M $257.8M Esplanade South Phase 1:Construct the park west of Glenanna including below grade parking, water feature etc. Phase 2: Relocate the Bell vault, move Esplanade South road, construct the integrated library and SYC, sell air rights for residential development, construct below grade parking. Phase 3:Update the city hall façade, renovate the current library site for administrative expansion. Phase 4 Construct the PAC, update the Recreation Complex façade, construct below grade parking, and construct new Recreation Complex parking. 1 3 3 2 2 4 4 4 Option D envisions the delivery of the project through 4 phases and needs to be studied. The costs outlined are preliminary estimates and do not constitute a detailed cost estimate. Administrative Expansion Performing Arts Centre Senior Youth Centre Library Residential Development Upgrades to Existing Bldg. Facades Above grade parking deck Parkland dedication and features Public square and water feature * Net project cost is preliminary and an estimate. It does not constitute a detailed cost estimate. It is net of land value but does not include development charges. Recreation Complex 72Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Option D –Preliminary Parking Layout Net new parking for SYC, Library, Admin and PAC is about 321 shared spaces. The parking layout is preliminary and requires a detailed parking study that will be completed in the next phase of analysis 234 surface 300 Deck (2 levels) 100 gravel 120 Below grade (PAC) (1 level) Phase 4 >< Phases 1 to 3 435 Below grade (3 levels) (Library/Parkette) Option C estimated Phases 1 to 3 Phase 4 Total Existing parking 190 334 524 New programming parking 235 87 321 Total Need 425 421 845 Parking Allocation 435 420 855 135 paved Decision Framework 74Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Summary of Options and Conclusions Option B: Legacy Revisited Concept Option C: Multiplex Concept Option D: Facilities on Park Concept Pros •Residential development is standalone •Business continuity with existing services •Space/programming synergies between library/SYC –cost savings Cons •No holistic masterplan design •Limited parking •Limited development value due to parking constraints and site size •Not integrated with Esplanade Park •Requires negotiation with PTC Pros •City develops its city-owned land •Residential development is standalone •Dedicated parkland •Space synergies between library/SYC/admin –more cost savings •Three condo towers providing most value Cons •Loss of full functional requirements •Loss of business continuity for library •Challenge with logistics and loading •Removal of familiar city landmarks Pros •Forms a cohesive Heart of Pickering •City develops its city-owned land •Moving Esplanade South, creates opportunity for full connection to Esplanade Park and Recreation Complex •Space/programming synergies between library/SYC –cost savings •Dedicated parkland •Two condo towers to provide value, with creation of civic feel Cons •Residential development integrated with SYC adding some complexities Option B has limitations for residential development potential and requires negotiation with PTC and has the highest cost. Option C has the lowest cost but results in losses to the full functional requirements. Option D provides the next lowest funding requirements, without the loss of full functional requirements and creates a heart. Net Project Cost Estimate ($M) Phase 1 –3 sub-total Phase 4 (2030-2031) TOTAL $203.2M $75.2M $278.4M Net Project Cost Estimate ($M) Phase 1 –3 sub-total Phase 4 (2030-2031) TOTAL $98.4M $115.5M $213.9M Net Project Cost Estimate ($M) Phase 1 –3 sub-total Phase 4 (2030-2031) TOTAL $142.3M $115.5M $257.8M Potential Partnership Structures 76Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Partnership Structure –Drivers Efficient allocation of risk / scope Allocate risks on the basis of capability and experience managing such risks to manage costs and ensure efficient management. Leverage skills and relationships of developer Developers have long standing relationships with suppliers, trades and key industry players that could potentially be leveraged to reduce costs. Ensure City has sufficient control over development Allow the City sufficient decision making and delivery controls during the development of the project. Provide cost and schedule certainty Ensures that the costs incurred from the contract will not exceed the bid price and schedule. Alignment with internal project delivery capability Leverages City internal capability while further strengthening project delivery capability for project. The preferred partnership structure with a developer would achieve the following drivers. 77Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Partnership Structure –Risks of Development Cost Risk Risk that the cost of construction and overall development increases over the project, due to changes in requirements/ scope, design, cost of materials, cost of labour, interest rates etc. Market Risk Risk that land value and condo values could decrease since these are a function of the market and could decline in the face of rising construction costs and rising interest rates. City Delivery Control Risk Risk that the City has insufficient decision making and delivery controls during the development of the project. Council Approval Process Risk The project needs to proceed through the council approval process with Council. The process is risky if Council changes, or if the project requires zoning change approvals. The following are key development risks normally assumed by the City. 78Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Partnership Structure –Developer Partners Value Trade and materials relationships Developers have long standing relationships with suppliers, trades and key industry players that could potentially be leveraged to reduce costs. Historical experience Developers bring extensive prior experience to development projects to help mitigate challenges, bring innovative ideas, and help ensure successful delivery. Project management expertise Developers can bring project management to a project, to help ensure it remains on schedule and cost. They can also help manage risks appropriately. Retention of design and construction risk Depending on the partnership model, developers can be responsible for design and construction scope, which means that the developer retains risks associated with constructability issues due to design or cost overruns. Private sector financing potential Developers can bring private sector financing to a project if desired. Depending on their credit rating, the developer may be able to get an attractive borrowing rate, which can help manage Pickering’s current debt capacity. A developer partner would bring significant value to the project . 79Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Overview of Potential Partnership Structure Models A spectrum of partnership structures models could support the PCC Project. •The City develops the design to 30% and executes procurement process to engage developer partner. •The developer would oversee and manage the design and construction of the PCC project. •City hires a prime consultant to design the project. •City awards separate contracts for design and construction works for municipal facilities across PCC project. •The City sells the vacant lands to a developer/contractor depending on option selected. •City engages a prime consultant to design the project. •City hires a developer to provide construction management services to manage the delivery of the PCC project. Partnership Structure Model 1 Partnership Structure Model 2 Partnership Structure Model 3 Refer to Appendix G for partnership structure diagrams. Next Steps and Pre-Development Process 81Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. The following high-level process is envisioned for Pickering to execute the pre -development process. Pre-Development Process Overview for PCC Project Stage 1: Option Analysis Study Stage 2: Analysis of Preferred Option Stage 3: Finding the Right Developer Partner Steps: •KPMG/HPA complete Options Analysis Study that includes high- level architectural concepts and project economics Action: •Council to: o select a preferred option for further study o approve funding and further analysis for preferred option Steps: •Support two phased procurement process (e.g., RFQ, RFP) •Support evaluation •Support negotiation with preferred developer partner Action: •Workshop partnership principles •Approve procurement documentation •Approve recommendation for preferred partner and to commence negotiation We are here Pre-Development Process Steps: •KPMG/HPA to conduct design of facility floorplates to fully consider program requirements •City with support from KPMG/HPA to conduct stakeholder and community engagement •KPMG/HPA to produce business case with updated designs, financial analysis, and provide recommendation on preferred partnership and governance structures. Action: •Council to: o approve recommendation for preferred option o approve proceeding to procurement 82Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Stage 2: Deliverable Details Activities •City performs stakeholder and community engagement with support from HPA/KPMG leveraging designs from design analysis •Virtual and in-person community sessions Deliverables •Community feedback to incorporate in designs •KPMG/HPA will participate in up to five stakeholder input sessions of a maximum of two hours. •KPMG/HPA will participate in up to five community engagement sessions of a maximum of three hours. Activities •HPA updates designs based on stakeholder and community feedback •KPMG update financial analysis from stage 1 •KPMG conduct multi-criteria analysis of partnership structures based on City objectives to identify preferred partnership structure •KPMG conduct detailed market sounding with developers based on the concept design •KPMG to workshop governance structure with City staff. Deliverables •Present recommendations in a business case that recommends a go to market strategy, including a proposed the partnership structure for the project, which informs the level of design required prior to procurement and whether to proceed directly to stage 3 or if detailed design is required. •Go to market strategy Stage 2a: Design Analysis Stage 2b: Stakeholder and Community Engagement Stage 2c: Business Case Activities •Confirm program requirements with City staff and stakeholders. •HPA to develop basic facility floor plate designs for PAC, SYC and Library •Develop a basic layout for the parkland dedication •Parking study to determine parking requirements •Civil study to consider the relocation of Esplanade South •Design workshops with City staff •Cost consultant to provide high-level costing based on level of design. •Review value engineering opportunities with City staff Deliverables •Designs of floor plates showing all major program requirements •Basic parking study identifying requirements and parking layouts •High-level PCC site plan identifying property limits, potential required grading and site servicing •Renderings of key interior spaces Detailed design. Based on the business case, detailed design may be required in advance of procurement. Optional scope for detailed design will be scoped and priced if required. The following stages outline the activities and deliverables for stage 2 scope in more detail. 83Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Stage 2 Roadmap Below presents the Stage 2 Roadmap. 2022 2023 2024 Roadmap Oct –Dec Q4 Jan to Mar Q1 Apr to Jun Q2 Jul to Sept Q3 Oct to Dec Q4 Jan to Mar Q1 Pre-development Phase Stage 1:Options Analysis Study Action: Council selects a preferred option Stage 2:Analysis of Preferred Option a)Design Analysis b)Stakeholder and Community Engagement c)Business Case 84Document Classification: KPMG Public© 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent me mber firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the in dependent member firms of the KPMG global organization. Proposed Stage 2 and 3 Fees Stage 2: Analysis of Preferred Option (Q2 2023 –Q4 2023)Estimated Fee* Stage 2a –Design Analysis $275,000 Stage 2b and 2c –Stakeholder and Community Engagement and Business Case $175,000 Total Estimated Fee $450,000 * Our fees exclude HST and a 7% administration & technology fee. Stage 3: Finding the Right Partner (Q4 2023 –Q4 2024)Estimated Fee* Stage 3a –Develop Project and Partnership Principles $35,000 Stage 3b –Draft and Release a RFQ $40,000 Stage 3c –Evaluate and Shortlist Proponents $25,000 Stage 3d –Draft and Release a RFP $25,000 Stage 3e –Find the Right Developer Partner $25,000 Total Estimated Fee $150,000 Proposed fees for Stage 2 and 3 scope of work has been estimated below. Document Classification: KPMG Public The information contained herein is of a general nature and is not intended to address the circumstances of any particular in dividual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such infor mation without appropriate professional advice after a thorough examination of the particular situation. © 2023 KPMG LLP, an Ontario limited liability partnership and a member firm of the KPMG global organization of independent member firms affiliated with KPMG International Limited, a private English company limited by guarantee. All rights reserved. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. home.kpmg/ca ABCD 1 March 21, 2023 City of Pickering 1 The Esplanade S Pickering, ON L1V 6K7 Attention: Mr. Stan Karwowski, Director, Finance & Treasurer Cc: Mr. Paul Bigioni, Director, Corporate Services & City Solicitor Ms. Marisa Carpino, Chief Administrative Officer Re: City Centre Project – Scope Amendment for City Centre Project for Stages 2 and 3 Dear Mr. Karwowski, Per Council direction on September 18, 2022, the City of Pickering retained KPMG with its subconsultant Harriri Pontarini Architects (“HPA”), to assess options to develop the Pickering City Centre (“PCC”) on City owned land. The details of our mandate can be found within our proposal dated October 1, 2022. The proposal included a phased approach to assess the options for PCC, whereby the first stage included considering three layout options and the second stage was to complete a more detailed design and business case analysis of the preferred design to be approved by Council. The first stage included preparing architectural concepts and determining the project economics for the various options. As such, the City of Pickering is seeking to retain KPMG to complete the stage 2 of the analysis of PCC. We are excited about continuing to support the City of Pickering on the City Centre Project, a visionary and transformational project for Pickering. We are pleased to submit this letter outlining our statement of work to the City of Pickering to support a detailed analysis of the preferred option for the City Centre Project and to support in selection of a developer partner. The scope of work and associated fees provided in this letter are based on our understanding of your needs identified through numerous discussions with you. A.Scope of Services The City seeks a developer partner to support it with implementing its bold vision to transform the city centre to leverage its experience, skills and buying power to support the City in building the Pickering City Centre buildings on a cost-effective basis while reducing the risk exposure and maintaining some control. The following two stages are contemplated as support that both KPMG LLP (KPMG) and Hariri Pontarini Architects (HPA) can provide to support the City in realizing its vision for the City Centre Project. For clarity, we confirm that HPA is a subcontractor to KPMG for the purposes of completing the services for Stage 2. The City does not have any direct relationship or obligations to HPA, nor is it obligated to HPA for any further work. Conversely, unless agreed otherwise, at the completion of Stage 2, HPA would be able to participate in any procurement opportunities as part of a developer bid. Attachment #2 to CAO 05-23 ABCD 2 Stage 2: Analysis of Preferred Option The following steps should be completed: a) Design Analysis KPMG/HPA team to conduct internal stakeholder engagement to confirm program requirements and possible synergies. From this, HPA will develop designs of facility floorplates for preferred option to fully consider program requirements and advance designs to support stakeholder engagement Activities: • Confirm program requirements with City staff and stakeholders. • HPA to develop basic facility floor plate designs for PAC, SYC and Library • Develop a basic layout for the parkland dedication • Parking study to determine parking requirements • Civil study to consider the relocation of Esplanade South • Design workshops with City staff • Cost consultant to provide high-level costing based on level of design. • Review value engineering opportunities with City staff Deliverables: • Designs of floor plates showing all major program requirements • Basic parking study identifying requirements and parking layouts • High-level PCC site plan identifying property limits, potential required grading and site servicing • Renderings of key interior spaces b) Stakeholder and Community Engagement City with support from KPMG/HPA to conduct stakeholder and community engagement with the designs from step a) to gather feedback Activities: • City performs stakeholder and community engagement with support from HPA/KPMG leveraging designs from design analysis • Virtual and in-person community sessions Deliverables: • Community feedback to incorporate in designs • KPMG/HPA will participate in up to five stakeholder input sessions of a maximum of two hours. • KPMG/HPA will participate in up to five community engagement sessions of a maximum of three hours. ABCD 3 c) Business Case KPMG/HPA produce a business case with updated designs, updated financial analysis from stage 1, and provide recommendations on preferred partnership structure and governance structure Activities: • HPA updates designs based on stakeholder and community feedback • KPMG update financial analysis from stage 1 • KPMG conduct multi-criteria analysis of partnership structures based on City objectives to identify preferred partnership structure • KPMG conduct detailed market sounding with developers based on the concept design • KPMG to workshop governance structure with City staff. Deliverables: • Present recommendations in a business case that recommends a go to market strategy, including a proposed the partnership structure for the project, which informs the level of design1 required prior to procurement and whether to proceed directly to stage 3 or if detailed design is required. • Go to market strategy Stage 3: Finding the Right Developer Partner a) Develop project and partnership principles After selecting a partnership structure, KPMG to leverage and review the guiding principles developed within this options analysis study, the risks of development and the value of a developer partner and craft project and partnership principles. The project and partnership principles should be workshopped with City staff and City Council as they will form the evaluation framework for the Request for Qualifications (“RFQ”). b) Draft and release a Request for Qualifications Leveraging the project and partnership principles, KPMG can support development of a RFQ. It should comprise of two parts; part one should market the opportunity to the development community, and part two should outline the procurement process and evaluation framework that includes the project and partnership principles. c) Evaluate and shortlist proponents The City should evaluate the respondents and shortlist three to five proponents for the Request for Proposals (“RFP”) stage. KPMG can provide ad hoc advisory services. d) Draft and release a Request for Proposals While the RFQ is in market, KPMG can support preparation of the RFP document that would include a technical submission and a financial business case. The technical submission would require the proponents to outline their vision in detail and the financial business case would require the proponent to lock in their net project cost. The City should evaluate the shortlisted proponents and select the right developer partner based on the scored evaluation that considers both the technical submission and financial business case. KPMG can provide ad hoc advisory services to support negotiation with the selected developer partner to reach an agreement. 1Based on the business case, detailed design may be required in advance of procurement. Optional scope for detailed design will be scoped and priced if required. ABCD 4 B. Timeline The following high-level timeline is outlined below to support the City through stages 2 and 3. C. Professional Fees The table below outlines our professional fees estimate for Stages 2 and 3 which are exclusive of HST and 7% administration and technology fee. Stage 2: Analysis of Preferred Option (Q2 2023 – Q4 2023) Estimated Fee* Stage 2a – Design Analysis $275,000 Stage 2b and 2c – Stakeholder and Community Engagement and Business Case $175,000 Total Estimated Fee $450,000 Stage 3: Finding the Right Partner (Q4 2023 – Q4 2024) Estimated Fee* Stage 3a – Develop Project and Partnership Principles $35,000 Stage 3b – Draft and Release a RFQ $40,000 Stage 3c – Evaluate and Shortlist Proponents $25,000 Stage 3d – Draft and Release a RFP $25,000 Stage 3e – Find the Right Developer Partner $25,000 Total Estimated Fee $150,000 ABCD 5 We kindly request your approval of the above via written response, change order and/or purchase order update. If you have any questions or concerns regarding the details outlined herein, please do not hesitate to contact me. Yours sincerely. Augusto R. Patmore, P. Eng, MBA Partner, Global Infrastructure Advisory KPMG LLP 416 777 3277 apatmore@kpmg.ca