HomeMy WebLinkAboutNovember 1, 2021 - Special Council
Special Council Meeting Agenda
November 1, 2021
Electronic Meeting
12:30 pm
For information related to accessibility requirements please contact:
Committee Coordinator
905.420.4611
clerks@pickering.ca
Due to COVID-19 and the Premier’s Emergency Orders to limit gatherings and maintain
physical distancing, the City of Pickering continues to hold electronic Council and
Committee Meetings.
Members of the public may observe the open, public portion of the meeting proceedings
by accessing the livestream. A recording of the meeting will also be available on the City’s
website following the meeting.
Parts of this Meeting will be In Camera in accordance with the provisions of Section 239 (2) of
the Municipal Act and Procedural By-law 7665/18, in that the matters to be discussed relate to:
b) personal matters about an identifiable individual, including municipal or local board
employees (Item 3.2);
d) labour relations or employee negotiations (Item 3.1);
e) litigation or potential litigation, including matters before administrative tribunals, affecting
the municipality or local board (Item 3.3);
f) advice that is subject to solicitor-client privilege, including communications necessary for
that purpose (Items 3.3 and 3.4); and,
k) a position, plan, procedure, criteria or instruction to be applied to any negotiations carried
on or to be carried on by or on behalf of the municipality or local board (Item 3.4).
Page
1. Roll Call
2. Disclosure of Interest
3. In Camera Matters
3.1 Confidential Memorandum from the Director, Human
Resources
Confidential
Attachment
Provided Under
Separate Cover
Re: Ratification of the Pickering Firefighters’ Collective
Bargaining Memorandum of Settlement
3.2 Confidential Memorandum from the Director, Human
Resources
Confidential
Attachment
Provided Under
Separate Cover
Re: Personal Matter about an Identifiable Individual
Special Council Meeting Agenda
November 1, 2021
Electronic Meeting
12:30 pm
For information related to accessibility requirements please contact:
Committee Coordinator
905.420.4611
clerks@pickering.ca
3.3 Confidential Memorandum from the Director, City Development Confidential
Attachment
Provided Under
Separate Cover
Re: Claremont Subdivision and Rezoning Applications Before
the Ontario Land Tribunal (OLT)
3.4 Confidential Verbal Update from the City Solicitor Confidential
Attachment
Provided Under
Separate Cover
Re: Master Development Agreement Negotiations for the
City Centre
4.Delegations
Due to COVID-19 and the Premier’s Emergency Orders to limit gatherings and
maintain physical distancing, members of the public may provide a verbal
delegation to Members of Council via electronic participation. To register as a
delegate for any items listed under Section 5 of the agenda, visit
www.pickering.ca/delegation, and complete the on-line delegation form or email
clerks@pickering.ca.
The list of delegates who have registered to speak will be called upon one by one
by the Chair and invited to join the meeting via audio connection. A maximum of
10 minutes shall be allotted for each delegation. Please ensure you provide the
phone number that you wish to be contacted on.
Please be advised that your name and address will appear in the public record
and will be posted on the City’s website as part of the meeting minutes.
5.Matters for Consideration
5.1 Director, Corporate Services & City Solicitor, Report LEG 19-21 1
City Centre Project Master Agreement Issues
Recommendation:
1.That Report LEG 19-21 be received;
2.That should Council wish to proceed with the City Centre Project,
staff be directed to finalize the Master Agreement: (i) without any
provisions for profit-sharing; and, (ii) without any additional
provisions addressing restrictive covenants; and,
Special Council Meeting Agenda
November 1, 2021
Electronic Meeting
12:30 pm
For information related to accessibility requirements please contact:
Committee Coordinator
905.420.4611
clerks@pickering.ca
3. That appropriate City of Pickering officials be authorized to take the
actions necessary to implement the recommendations in this report.
6. Confirmation By-law
7. Adjournment
Report to Council
Report Number: LEG 19-21
Date: November 1, 2021
From: Paul Bigioni
Director, Corporate
Subject: City Centre Project Master Agreement Issues
-File: D-1000-003-18
Recommendation:
1.That Report LEG 19-21 be received;
2.That should Council wish to proceed with the City Centre Project, staff be directed to
finalize the Master Agreement: (i) without any provisions for profit-sharing; and (ii) without
any additional provisions addressing restrictive covenants;
3.That appropriate City of Pickering officials be authorized to take the actions necessary to
implement the recommendations in this report.
Executive Summary: Recommendation 4 of Report FIN 15-21 was adopted by Council
on October 21, 2021. That Recommendation consisted of Council’s endorsement of the
material content of the draft Master Agreement for the Pickering City Centre Project
(Attachment 2). Council’s endorsement of that Recommendation was qualified to the extent
that it was subject to the satisfaction of staff’s concerns about: (i) the unwillingness of OPB
Realty Inc. (“OPB”) to include a profit-sharing provision in the Master Agreement, and (ii)
certain restrictive covenants registered against title to the lands being transferred to the City
and which would limit certain uses to be made of the new City facilities.
Unfortunately, OPB is unwilling to include a profit-sharing provision in the Master Agreement,
and will not proceed with the City Centre project unless the City agrees to forego the profit-
sharing provision. The Director, Corporate Services & City Solicitor cannot recommend, from a
legal perspective, that the City proceed without the protection of the cost-sharing provision. In
addition, the restrictive covenants registered on title to OPB’s lands could limit the City’s ability
to present certain pre-recorded content in its new facilities. Council must consider this as well
as the anticipated social and economic benefits of the project, and must decide to either: (i)
direct staff to finalize the Master Agreement without any provisions for profit-sharing and
without any additional provisions addressing restrictive covenants; or (ii) make no further
Resolution or Direction, and risk OPB’s withdrawal from negotiations and the likely end of the
City Centre project.
Financial Implications: As set out in Report FIN 15-21.
- 1 -
LEG 19-21 November 1, 2021
Subject: City Centre Page 2
Discussion: On October 21, 2021, Council adopted Recommendation 4 of Report
FIN 15-21 (Resolution 700/21). Report FIN 15-21 (without attachments) is Attachment 1 to this
Report. Recommendation 4 reads as follows:
4. That, in the event Council approves the actions set out in Recommendation 3 above,
the material content of the provisions contained in the draft Master Agreement and
related Memorandum (Attachment 2) are endorsed, and will be contained within a final
Master Agreement to be executed by the City and OPB Realty Inc. (or an affiliate of
OPB Realty Inc.), subject to the satisfaction of the concerns more particularly set out
within this report regarding: (i) profit sharing on any future sale of the South Esplanade
Block and (ii) certain restrictions on title to OPB's lands;
Since October 21st, OPB has confirmed that it will not agree to any profit-sharing provision in
the Master Agreement. Council must therefore decide to either: (a) direct staff to finalize the
Master Agreement without any provisions for profit-sharing and without any additional
provisions addressing restrictive covenants; or (b) make no further Resolution or Direction, and
risk OPB’s withdrawal from negotiations and the likely end of the City Centre project.
Information regarding the profit-sharing provision and the restrictive covenants is set out
below.
The Profit-sharing Provision:
The Master Agreement (and previously the non-binding Memorandum of Understanding)
contemplates residential condominium development on the South Esplanade Block. To enable
this development, OPB intends to transfer the South Esplanade Block to a developer
experienced in residential condominium development. This aspect of the Project is of
significant value to OPB, and it is also important to the City, because the development will
result in assessment growth and an increase in property tax revenues that will help defray the
City’s project costs. If development of the South Esplanade Block does not occur, the expected
assessment growth will not materialize.
In an effort to protect the City from that possibility, staff have sought the agreement of OPB
and its transferee that, if development does not occur, and instead the South Esplanade Block
(or any part of it) is sold within five years, the City would be entitled to a 50 percent share of
the net profit realized on such sale. This commitment (referred to as a “Participation
Covenant”) was requested to deter land banking (i.e. the developer simply electing not to
construct the residential condominium development) and land speculation (i.e. a subsequent
‘flip’ of the undeveloped South Esplanade Block for a purchase price significantly in excess of
that attributed to the lands as part of the land swap arrangements with OPB). This commitment
would also serve as a prudent protection from the reputational harm that could result if the
South Esplanade Block was sold on to a third party at a large profit. Considering this from a
legal perspective, the Director, Corporate Services & City Solicitor recommends that the profit-
sharing provision be included as a protection for the City. Council should consider that together
with the social and economic benefits of the project that are set out in Report FIN 15-21.
It is important to understand that the profit-sharing provision would apply only if the lands are
sold without being developed as residential condominiums. If the South Esplanade Block is
- 2 -
LEG 19-21 November 1, 2021
Subject: City Centre Page 3
developed by OPB or its transferee as residential condominiums (as contemplated by the
MOU and the Master Agreement), then the City would not claim any share of the profits. In any
event, OPB has clearly stated that it is unwilling to agree to any profit-sharing provision in the
Master Agreement.
The Restrictive Covenants:
The City is aware of certain restrictive covenants which affect the OPB lands which the City will
be acquiring. These restrictive covenants appear in certain leases with tenants of the Pickering
Town Centre Shopping Centre. The City is currently aware of two restrictions in particular, in
favour of Farm Boy and Cineplex, which as it currently stands, have a material impact on the
proposed operation of the new City Facilities. These restrictions will limit the ability of the City
to hold a farmers’ market in the new public square, and will also prevent the City from showing
videos or films in any of the new City Facilities. These restrictions will need to be removed or
amended to enable the City to fully use the new City Facilities for their intended purpose.
Discussions are ongoing with OPB as to how these restrictions will be addressed, but any
resolution will require the agreement of both Farm Boy (Sobeys) and Cineplex. There may be
other restrictions which become apparent as further due diligence is conducted on the OPB
lands by the City.
It must be noted that the draft Master Agreement (Attachment 2) calls for the City to receive
title to the lands for the new City Facilities “free and clear” of such encumbrances, however,
the risk remains that OPB may not be able to obtain the agreement of its tenants to remove or
amend in a satisfactory manner, these restrictive covenants. Because the City will in no way
enter into commercial competition with Farm Boy or Cineplex, staff have some confidence that
Farm Boy and Cineplex will amend their restrictive covenants so that the use of City facilities is
unrestricted, however, that cannot be guaranteed.
Attachments:
1.Report FIN 15-21 (without attachments)
2.Attachment 2 of Report FIN 15-2
Prepared/Endorsed By:
Paul Bigioni
Director, Corporate Services & City Solicitor
PB:ks
- 3 -
Original Signed By:
LEG 19-21 November 1, 2021
Subject: City Centre Page 4
Recommended for the consideration
of Pickering City Council
Marisa Carpino, M.A.
Chief Administrative Officer
- 4 -
Original Signed By:
Report to Council
Report Number: FIN 15-21
Date: October 21, 2021
From: Stan Karwowski
Director, Finance & Treasurer
Subject: City Centre Financial and Legal Implications
-File: F-1200-001
Recommendation:
1.That Report FIN 15-21 of the Director, Finance & Treasurer be received;
2.That Council receive for information the “5-Year Capital & Operating Financial Plan”
prepared by Watson & Associates Economists Ltd., dated October 14, 2021;
3.That should Council wish to proceed with the City Centre Project, that the following
actions related to the Project be approved:
a.That the City Centre project’s fixed cost ceiling be established at $207.70 million, that
is funded from reserves of $3.6 million, that results in the preliminary estimated total
new debt borrowing of $204.13 allocated between Development Charge Funded
Debt of $110.13 million and City Share Debt of $94.00 million (to be funded from
future casino revenues), and to reduce the financial stress and strain this total
amount of debt (DC and City) would cause in both the short and medium term, that
City staff be directed to explore all revenue options including grants and partnerships
and that to manage the City’s debt structure below the Provincial Annual Repayment
Limit (ARL), all debt financed projects related to Seaton and the Pickering Museum
Village be placed on a “medium term pause” (post 2028) and that other future debt
financed capital projects be measured against the recommended guideline that they
proceed, only if the project is required for the health and safety of residents and/or
staff;
b.That, in order for staff to meet the April 2022 timeline of awarding of the construction
contract for the Pickering City Centre, Council approve the following investments
(expenditures) from October 22, 2021 to April 30, 2022:
i That Council approve $6,449,000 million (net of HST) to be awarded to
architects-Alliance for the preparation of construction drawings and tender
documents for the City Centre project excluding the City parking garage;
ii That Council approve $345,000 (net of HST) to Cushm an & Wakefield Asset
Services LLC on account of its development management fees related to the
Senior & Youth Centre, Bridge Link and for the relocation of site services;
Attachment #1 to Report LEG 19-21
- 5 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 2
iii That Council approve $627,000 (net of HST) to twopointO Partners Inc. on
account of its development management fees related to the Library, Public
Square/Public Realm and Performing Arts Centre;
iv That Council approve $512,870 (net of HST) to SKA for works related to the
design and drawings for the relocation of services;
v That Council approve $175,900 (net of HST) to Deloitte LLP for construction
project management services to be funded from current budget operating
account 2121.2392 and funded 100 percent from the casino reserve in
accordance with Purchasing Policy 10.03 (c);
vi That Council approve $432,480 (net of HST) to Torys LLP to complete all of the
legal agreements necessary for the execution of contracts to be approved at the
April 2022 meeting;
vii That Council approve $40,700 (net of HST) for soil/environmental testing and
related works as part of the due diligence process related to the land transaction
and to be funded from the 2019 Capital Budget account;
viii That IBI Group be retained to undertake a parking strategy for the new proposed
underground parking garage at a cost not to exceed $50,000 (net of HST) and
to be funded from 2019 Capital Budget account;
ix That Council approve $941,000 (net of HST) to OPB Realty Inc. for
reimbursement of work for the City portion of the underground parking garage
design and development expenses;
x That Deloitte LLP be retained to undertake and develop a debt financing
strategy for the City Centre project at a cost not to exceed $45,800 (net of HST);
xi That the Director, Finance & Treasurer be authorized to allocate the above
approved expenditures and prior approved and prior year’s City Centre
expenditures to the various capital accounts and to maximize the use of
development charge funding; and
xii That Council approve $92,284 (plus HST) to be awarded to EllisDon
Corporation for General Contractor Services consulting contract related to
preconstruction work for the City Centre project under RFP2021 -3 and this cost
be funded from the 2019 Capital Budget account.
4. That, in the event Council approves the actions set out in Recommendation 3 above, the
material content of the provisions contained in the draft Master Agreement and related
Memorandum (Attachment 2) are endorsed, and will be contained within a final Master
Agreement to be executed by the City and OPB Realty Inc. (or an affiliate of OPB Realty
Inc.), subject to the satisfaction of the concerns more particularly set out within this report
regarding: (i) profit sharing on any future sale of the South Esplanade Block and (ii)
certain restrictions on title to OPB's lands;
- 6 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 3
5. That, in the event Council approves the actions set out in Recommendation 3 above, the
form of Contract for Architectural Services (Attachment 7) be approved for use in
respect of the design and construction of each of the new City facilities included in the
City Centre project, and that the Mayor and City Clerk be authorized to execute such
contracts in conformity with the budget parameters established in this report by the
Director, Finance & Treasurer and subject to minor revisions acceptable to the Chief
Administrative Officer and the Director, Corporate Services & City Solicitor;
6. That, in the event Council approves the actions set out in Recommendation 3 above, the
final form of Master Agreement, and all project contracts referred to within it, be brought
before Council for approval as they are negotiated, but no later than April, 2022; and
7. That the appropriate City of Pickering officials be authorized to take the necessary
actions as indicated in this report.
Executive Summary: The 2021 budget report (FIN 05-21), included a discussion on the
need to undertake a “5-Year Capital & Operating Plan” (5YCOP) due to the City Centre project
and ambitious capital plan for the years 2022 up to and including 2026. The building blocks of
the financial plan are:
Asset Management Plan or AMP (approved in principle for financial planning purposes ,
Resolution #683/21);
2022 Preliminary Draft Capital Budget & Four Year Forecast ( approved in principle for
financial planning purposes, Resolution #661/21);
Revised cost estimate for the City Centre project as developed by Turner & Townse nd.
After many months of work, and leveraging the expertise of consultants Watson & Associates
Economists Ltd, the results of the analysis is reflected in this report and set out in Attachment
1.
The City Centre project represents a multi-generational opportunity that will transform the
City’s downtown core. The 2022 draft capital budget and four year forecast includes capital
projects that will generate long-term community benefits. The purpose of the 5CYOP is not to
debate the merits and/or community benefits of these projects but to answer the fundamental
financial question of affordability, risk and the impact of these projects on the City’s finances.
Complicating the analysis is the pandemic and its possible negative and short and long term
impact of the local and national economies. It should be noted that the approval for the
construction of the City Centre project occurred in a pre-pandemic environment. In addition, to
the core financial analysis, staff have also investigated other matters related to the City Centre
project such as parking, naming rights revenues and preliminary estim ates for the operating
costs of the City Centre project. The information, presented in this report, represents the best
available information and/or expert opinions at this current date and can change over time.
- 7 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 4
The 5CYOP was developed by Watson & Associat es Economists Ltd. and the City Centre DC
funding reflected in the document is based on their expertise in this area . To prepare the
5CYOP, assumptions had to be made in order to develop financial plans and options . The
results of the analysis indicates that the City is hitting the Annual Repayment Limit or ARL if it
plans to undertake all of the capital construction projects (City Centre and capital forecast).
The issue of the ARL was identified by the Treasurer in the 2020 and 2021 budget reports . To
reduce the financial pressure and strain, a second option was developed whereby the
Pickering Heritage Community Centre & Library and Seaton Recreation & Library Community
Centre are deferred. Even after employing this option, and while recognizing that the financial
stress level is reduced, it is still financially uncomfortable. Therefore, from a financial lens only,
the Treasurer does not recommend adopting recommendation 3 . a and b. However, if there
are new revenue sources (such as senior government grants) and depending upon the dollar
level of new revenues, the Treasurer’s recommendation could be reversed. Whatever course
of action Council approves, the City should continue with its current business practice as it
relates to its finance management of prudent and conservative fiscal management that has
served the City well.
In the event that Council decides to proceed with the City Centre project, it will be necessary to
enter into a Master Agreement with OPB Realty Inc. to define the many elements of the project
and the roles and responsibilities of the City and OPB with respect to the design, construction,
operation and maintenance of the project. Subject to the specific concerns set out in this report
regarding (i) profit sharing on any sale of the South Esplanade Block and (ii) restrictions on title
to OPB's lands, it is recommended that Council endorse the material content of the attached
draft Master Agreement and related Memorandum, for inclusion in the final form of Master
Agreement to be brought to Council for subsequent approval, together with the other project
contracts referred to in the Master Agreement.
In the event that Council decides to proceed with the City Centre project , it is further
recommended that the attached template Contract for Arc hitectural Services be approved, and
that contracts with architectsAlliance be approved and executed on the same terms for each of
the City facilities comprising the project.
Financial Implications: The “5-Year Capital & Operating Plan” (5YCOP) is a framework
for Council and senior staff to consider the future financial challenges and opportunities
through financial forecasting, scenarios and analysis with the goal of trying to achieve short
and long term financial sustainability. The 5YCOP is the process of projecting revenues and
expenditures (including capital expenditures) over the five year period while using assumptions
relevant to the municipality. The development of the 5YCOP is complex and contains several
inter-related decision making factors. It is recommended to Council that the 5YCOP be
refreshed every two years in order to identify and highlight both positive and potential “bumps
in the road”. With each update to the 5YCOP, the data and information will be more refined to
reflect the current financial environment and the corresponding challenges and opportunities
that the City may leverage and or develop appropriate strategies.
- 8 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 5
The 5YCOP, as developed by Watson & Associates, is based on Council approved inputs for
the following two major components: 2022 Preliminary Draft Capital Budget & Four Year
Forecast (FIN 13-21) and Asset Management Plan (FIN 14-21). Another key building block of
the 5YCOP is future anticipated development and the consultant used the City’s 2020 and
2021 year-to-date building permit activity and growth data from the City’s 2017 DC Background
Study. The growth data is important due to the fact it develops the calculation for assessment
growth and corresponding taxation revenue for the five year time period.
City Centre Project – Financial Summary and Discussion
Table One
City Centre Project Expenditure Ceiling
April 2022
Col. A Col. C
Expenditures DC
Line # Capital - (Alphabetical Order) (Net of HST 1.76%)DC's City Share Fund. %
1 Bridge Link 1,234,017$ 895,720$ 338,297$ 72.60%
2 Library 47,017,879 22,360,092 24,657,787 47.60%
3 Performing Arts Centre (PAC)69,550,000 15,251,204 54,298,797 21.90%
4 Phase 1 Service Relocations 7,489,001 4,390,798 3,098,203 58.60%
5 Public Realm (City Lands)6,861,816 450,000 6,411,816 6.60%
6 Public Square 5,948,814 3,379,510 2,569,304 56.80%
7 Senior & Youth Centre (S&Y)43,038,550 41,871,070 1,167,481 97.30%
8 Underground Parking (350 Stalls)26,529,470 21,981,205 4,548,265 82.90%
9 Total City Expenditure Celling 207,669,547$ 110,579,599$ 97,089,950$ 53.25%
Col. B
Funding Sources
The Bridge Link costs as shown above are substantially lower than previous estimates . The
decrease in the cost is mainly due to the original concept of the bridge link was first treated as
an add-on and therefore, Poole Construction Limited (PCL) had placed a premium on the
bridge and support structure. The other factor is that the current design of the bridge link is
integrated into the SYC and Library buildings and therefore, the support structure of the bridge
budget is being carried in each of those budgets.
As the above table indicates, the expenditure ceiling for this project from a City perspective is
$207.7 million with Development Charge (DC) funding providing 53.2 percent of the total
project costs. It should be noted that there is the potential for some of the Public Realm costs
to be funded through a “Community Benefit Charge (CBC)”. As stated in the 2021 budget
presentation, City staff have now started the Development Charge Study and Community
Benefit Study process and where possible, staff will explore the opportunity to have these
costs funded by the CBC. It is interesting to note that the Senior & Youth Centre DC funding
component is almost funding the entire project’s capital cost. Table One excludes any future
senior government grant funding opportunities. It is staff’s intent to apply for all grant
opportunities even including smaller grants where there may be an opportunity to help fund
energy efficient equipment and/or accessibility capital investments.
- 9 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 6
Table Two
City Centre Project Estimated Net Cost
April 2022
Total City Expenditure Celling $207,669,547
Less:
PTC Refund (6,300,000)
Estimated Net Project Cost $201,369,547
The Pickering Town Centre (PTC) Refund and timing of the payment is based on the City
completing the “Public Realm” improvements. The goal is to have the Public Realm
improvements completed when the City Centre is completed. Payment is received from PTC
only when the entire public realm project area has been completed.
The Public Realm area consists of a new public urban square and will be constructed between
the Performing Arts Centre and the Youth & Seniors Centre extending from the Central Library
to Glenanna Road. In addition, a small secondary urban square is proposed immediately north
of the new Central Library. These two park blocks will have a combined area of 2,403 square
metres, and are intended to be conveyed to the City to satisfy the parkland dedication
requirements under the Planning Act for the future redevelopment of the easterly portion of the
PTC lands.
The Public Square blocks will feature a unique paving treatment with seating, planters, public
art, water feature and landscaping in a design that connects the Central Library, Seniors &
Youth Centre and Performing Arts Centre. This space will be used for outdoor experiences;
from large events to small performances while providing access to the retail stores at the
Pickering Town Centre. The proposed hardscape treatment is intended to extend through the
new public road fronting the Central Library, and will continue through Esplanade South to the
Chestnut Hill Developments Recreation Complex. The purpose of this extension of hardscape
features is to provide a unified streetscape treatment from the Central Library to the Recreation
Complex, that will connect all existing and new City facilities, as well as create a cohesive and
defining identity for the City Centre neighbourhood . The area of the Public Realm
improvements is shown in diagram one.
- 10 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 7
Diagram One
Public Realm Area
Notes:
The light green area represents Public Realm
The red crosshatched area is the responsibility of the residential tower owner
City Centre Debt Analysis & Watson Report
As stated earlier in the 2020 and 2021 budget reports, the Treasurer has raised the issue and
expressed concerns regarding the level of debt as it relates to the planned future capital
expenditures and its impact on the Annual Repayment Limit or ARL. The City Centre project
and the City’s capital forecast both add to the financial strain and stress referenced in
recommendation 3. a.
A financial snapshot is presented in Table Three of the Council approved 2022 Preliminary
Draft Capital Budget and Four Year Forecast.
- 11 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 8
Table Three
2022 Preliminary Draft Capital Budget & Four Year Forecast ($ Millions)
2022
Preliminary 2023 2024 2025 2026 Total
Draft Forecast Forecast Forecast Forecast
Budget
Major Project Animal
Shelter
Highway
401 Bridge
Seaton
Community
Centre
Design
Civic
Complex
Renovations
Seaton
Community
Centre
Construction
Total Expenditures 41.3$ 117.3$ 66.8$ 50.7$ 134.8$ 410.7$
Financing
By Major Sources
External Debt 3.1 24.2 18.3 27.6 19.5 92.7
Internal Loans 2.0 3.4 2.7 3.1 1.0 12.1
DC Debt 6.9 11.1 18.5 0.0 88.3 124.7
Sub Total 12.0 38.7 39.5 30.7 108.8 229.5
Prov/Fed Gov Grants 6.1 7.0 4.6 6.8 4.0 28.5
DC Funding 6.7 30.1 5.4 4.1 8.0 54.3
City Funded Reserves 10.9 14.6 12.1 6.8 11.0 55.3
Third Party Contributions 2.3 25.3 1.1 0.7 1.4 30.7
Other *3.3 1.7 4.2 1.6 1.6 12.3
Total 41.3$ 117.4$ 66.8$ 50.7$ 134.8$ 410.7$
Table Three does not include the City Centre project cost.
As shown in Table Three, the preliminary 2022 draft capital plan is substantially funded with
debt. The Development Charges (DC) debt is the largest forecasted component and this debt
is required to be issued due to the fact the City’s DC reserve funds do not have sufficient
dollars to meet the growth related capital expenditures. The issue of the DC reserve funds
having insufficient balances and, therefore, having to borrow funds was identified by the
Treasurer in Report FIN 11-21.
Table Four
Debt Summary (City Centre & 2022 Capital Budget & 4 Year Forecast)
City Centre Debt
DC Debt
City Share Debt
$110,129,598
94,009,951 $204,139,549
2022 Budget & Forecast
Total Estimated New Debt
229,500,000
$433,639,549
- 12 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 9
Table Four above only reflects new debt. The City currently has outstanding (issued) debt of
$30.6 million plus $32.7 million of new debt to be issued from previously approved capital
budgets, totaling 63.3 million. (The 2021 budget included the Pickering Heritage Community
Centre of which $11.4 million of the project’s cost would be funded from debt). The estimated
new debt represents an increase of 6.85 times over the revised debt of $63.3 million.
What is the ARL?
The Municipal Act through Regulation 403/02 permits a maximum of 25 percent of net
operating revenues to be used to fund principal and interest charges for debt . For Pickering,
the net operating revenues consists of the following major items:
Property tax revenue
User fees and charges
Fines, penalties and interest on taxes
License fees, permit fees and rent
Gaming and casino revenues
Every year, as the budget levy increases, the City’s annual repayment limit increases that in -
turn results in a higher ARL. Over the last seven years, the City has maintained a steady
course as it relates to debt use and has maintained its debt level below 5 percent of the
maximum allowed of 25 percent. The financial strategy of being prudent and cautious has
served the City well as it relates to its management of debt. With the addition of a new revenue
source (casino revenue), the City can now proceed to consider, to a certain degree, to expand
its use of debt.
Ontario Regulation 403/02 does permit municipalities to appeal to the Ontario Land Tribunal
(OLT) to exceed the 25 percent limit. The use of this path by municipalities is rare. Staff are
aware of one situation whereby a municipality requested an exemption to exceed the limit to
borrow funds to install water and sewer infrastructure. Under this situation, the municipality
could demonstrate that the additional debt costs could be accommodated through future water
and sewer revenues. In other words, the higher capital costs were directly funded by
corresponding water and sewer rates and this revenue stream has a low risk of default and or
failure. In Pickering’s situation, the City Centre capital program , when completed, results in
higher net operating costs. In other words, the revenue stream from the City Centre project is
inadequate to cover the debt costs.
To start the appeal process, the City’s solicitor would have to write to the OLT asking for an
increase to the debt ceiling. The following information would have to be provided to the
Tribunal:
i. Set out the current debt limit
ii. Set out why the debt limit needs to be increased
iii. Describe the extent of the increase
iv. Describe what the increased funds would be used for
v. Describe the costs of the project
vi. Give the rationale for the project
- 13 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 10
vii. Describe the plan to return to balanced position
It is staff’s understanding that the “hearing” would be held by correspondence and the process
is not subject to the current backlog of the OLT. Therefore, it appears that a decision could be
rendered within a reasonable amount of time.
Watson & Associates Report Analysis
When reviewing the “5-Year Capital & Operating Financial Plan” prepared by Watson &
Associates, the reader has to understand that certain assumptions were made in developing
the various scenarios and options in consultation with finance staff. The key assumptions are:
City Centre debt borrowing occurs over a three year period , rate stabilization reserve balance
would be at 15 percent of net expenditures, population would increase by 1.8 percent per year
translating into assessment growth and the goal is to build up the casino reserve balance to 2
years’ of annual debt financing costs to offset unpredictable events .
Table Five
ARL Summary (Watson & Associates Report – Pages 22 to 27)
Line # Option A Option B
Deferral
Scenario’s Capital All In Seaton Rec & North Heritage
2027 2027
A #1 – Maintain Status Quo 26.5% 20.7%
B #2 – Reflects AMP Strategy 24.6% 19.2%
C Average 25.6% 20.0%
The above information on table f ive can be found on pages 22 to 27 of the attached Watson &
Associates report.
Option A
Scenario 1 is based on the City’s current approach of moderate increases to the tax levy and
includes all of the capital projects (City Centre and capital forecast) proceeding as currently
forecasted. Under this scenario, the City exceeds the ARL.
Scenario 2 takes into the consideration the City’s Asset Management Plan (AMP) with
corresponding levy increases with the identical capital construction build plan as scenario 1.
The ARL is lower for scenario 2 due to the fact the annual property tax increases have been
higher to reflect the AMP strategy (of increasing the tax levy to fund capital replacements) and
therefore, creating more ARL room. If the City adopts a phase-in approach as reflected in Line
C, the City is still above the ARL. For this reason, and only viewing from a financial lens, the
Treasurer strongly does not recommend Option A.
- 14 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 11
Option B
The ARL figures represented in “Option B” represents the capital construction plan (City
Centre), with a deferral of the Pickering Heritage Community Centre & Library ($29.08 million)
and the Seaton Recreation & Library Community Centre ($110.10 million). By deferring these
two major capital projects, the City reduces its ARL below the 25 percent limit. However, by
adopting the “Average” AMP levy strategy, the City is still above average ARL as compared to
the vast majority of municipalities in Ontario. There is still a sufficient level of risk associated
with this approach such as: the willingness of Council to consider moderate increases in the
tax levy to fund the AMP, uncertainty in a post pandemic economic environment, casino
revenue streams and future assessment growth. The capital program (City Centre and
forecast) is based on the principle of “growth”, that in-turn generates DC fees to pay for DC
debt. A recession and/or other significant negative even that disrupts the “growth” model
assumption translates into financial stress for the City. To partially mitigate this risk, the
Treasurer recommends that a reserve be established with a target balance equivalent to two
years of City Centre debt financing costs. However, it should be noted that there are other DC
debt financed projects where a reduction in DC fees that results insufficient funds to meet the
DC borrowing costs would have to be funded from other City sources.
The Treasurer is still recommending that the project not proceed under Option B even when
considering the significant deferrals due to the fact the City is still relatively close to the ARL
limit, the uncertainty of the pandemic and its impact on local economy and assessment growth .
If and when other or additional revenue sources become available such as senior government
grants, these additional revenues may reduce the financial stress and or the amount borrowed.
The fiscal challenge for any municipality while still operating in a pandemic is trying to manage
the risk when undertaking such a large investment (City Centre & Capital Forecast). There are
basically five options in managing the risk: defer projects over a longer period of time,
decrease the number of projects, scale back the size of the capital projects (smaller buildings)
find alternative or new sources of revenues or increase the size of the contingency or rainy day
fund. Unfortunately, there is no mathematical formula that would develop the optimum strategy
for managing the risk envelope of what the City is proposing. However, the guiding principle
should be to be cautious and or risk adverse at the initial stage of the five year plan until some
of the variables trend in a positive direction for the City.
It should be recognized that the City Centre project provides other community, socio-economic
benefits described later in this report that when taken into consideration, Council may decide to
move the project forward. The recommendations made in this report by the Treasurer are
based only on financial inputs and/or considerations and do not take these other factors into
account. From a financial lens and when considering Options A and B, B is preferred .
However, from a financial perspective, the best option is not to proceed, unless there are other
new revenue streams that would lower the ARL to a more moderate level.
- 15 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 12
Discussion:
Explanation of Key Recommendations
a) Hiring of architects-Alliance for preparing construction and tender documents –
Recommendation 3. b. i
architects-Alliance staff and their team of consulting engineers will be working with the
development managers and the pre-construction general contractor to complete working
drawings and progressively tender the City Centre project (excluding the City parking garage).
b) Engagement of Cushman & Wakefield (Development Managers) –
Recommendation 3. b. ii
Staff from Cushman & Wakefield will be working with City staff, architects-Alliance staff as well
as their team of consulting engineers on the following items: developing and reviewing the City
Centre working drawings; working with the pre-construction General Contractor on the
progressive tendering of the City Centre project; and obtaining all the necessary approvals
from the City and other authorities having jurisdictio n required for City Centre related to the
Senior & Youth Centre, Bridge Link and for the relocation of site services
c) Employment of twopointO (Development Managers) – Recommendation 3.b. iii
The team from twopointO will be working with City staff and other project staff related to the
following City Centre projects: Library, Public Square/Public Realm and Performing Arts
Centre. The work performed will be similar as to the Cushman & Wakefield project work,
however, the DM’s work will be focused on differe nt buildings and structures related to the City
Centre.
d) Hiring of SKA for Relocation of Services – Recommendation 3. b. iv
The engineering consulting firm of Sabourin, Kimble & Associates Ltd. (SKA) was retained in
March 2019 to provide project management services and undertake preliminary engineering
services for the relocation of services associated with the City Centre Project. In July 2019 , the
scope of their assignment was expanded to include detail design, utility relocation coordination
and transportation planning. The revised project cost for the assignment was $880,000 (HST
extra).
SKA worked on the assignment until the end of March 2020 after which the City Centre project
was placed on “pause” due to economic uncertainty as a result of the COVID-19 pandemic. At
that point SKA had completed approximately 60 percent of the assignment. Taking into
account the 18 months that has passed since agencies have reviewed the first submission of
the design, there is additional time, and effort required to get back to what is considered a 60
percent design submission.
SKA has submitted a proposal dated September 27, 2021 outlining the scope of work and cost
estimate to complete the relocation of services design assignment which includes project
management services, additional preliminary engineering services, detail design services
- 16 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 13
(discounted to reflect work completed), geotechnical work and utility locates. The estimated
cost of their services is $512,870 (net of HST) for the period of October 2021 to April 2022. It
should be noted that this schedule is aggressive, but all efforts will be made to achieve full
approvals by April 30, 2022.
It should also be mentioned that the previous and the proposed design assignments include
costs related to both the Phase 1 relocation of services (benefiting the Performing Arts Centre,
Library, Youth & Seniors Centre, residential tower and the underground parking garage) and
Phase 2 relocation of services that solely benefits Ontario Pension Board’s (OPB) proposed
development on the Pickering Town Centre lands south of the Youth & Seniors Centre to
Pickering Parkway. As such, some of the costs within the scope of the assignments are to be
cost shared with OPB.
e) Contracting of Construction Project Management Services to Deloitte LLP –
Recommendation 3. b. v
There is a need for the City to engage the services for construction project management to
undertake several of the major development tasks related to the City Centre project . These
tasks include the following such as perform reviews and provide recommendations to senior
City staff on quality, tender document compliance including design/technical specifications,
scheduling cost and change order processes.
f) Hiring of Torys LLP to Complete Legal Agreements – Recommendation 3. b. vi
The Master Agreement lists as schedules the various other contracts and documents which
must be finalized in order to completely define all aspects of the Project. Provided that OPB
and the City agree on the business terms as set out in the draft Master Agreement
(Attachment 2), staff do not expect major disagreement between the parties on the terms of
the other contracts and documents. That being said, a significant amount of work will be
necessary to negotiate and finalize the other contracts and document s. Torys LLP has been
advising the City with respect to the Project since 2019 and, since May of this year, has
advised the City with respect to all the matters addressed within the draft Master Agreement.
g) Hiring of IBI Group to develop the strategy for New Underground Parking Garage
– Recommendation 3. b. viii
As a follow up to the Civic Complex Parking Strategy, it is recommended that the City retain a
consultant to conduct an operational review of the proposed underground parking garage that
will service the City’s Youth & Seniors Centre, Library and Performing Arts Centre. There is a
need to determine strategies around parking space designation and allocation, technology to
be used to control ingress/egress and parking, and an operating model to be used. It is
important to have this determined early so that requirements for technologies and systems can
be worked into the design drawings for the underground parking garage and three facilities.
Staff requested a scope of work and cost proposal from IBI Group who have expertise in this
field of work. Staff is recommending that IBI Group be retained at a cost not to exceed $50,000
to undertake this work.
- 17 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 14
h) Payment to Pickering Town Centre for Underground Parking Design –
Recommendation 3. b ix
A key component of the project is the City Centre parking garage. The City has approximately
350 parking stalls on the P1 level of the garage that connects directly to the Library, Seniors &
Youth Centre as well as the Performing Arts Centre. Due to the integrated nature of the
parking facilities, the parties have agreed that that the parking garage will be constructed by
Pickering Town Centre and the City will reimburse PTC for their proportion share of the cost.
The payment is to reimburse PTC for the City’s share of th e parking garage design related
costs.
i) Hiring of Deloitte LLP to develop a Debt Financing Strategy – Recommendation 3.
b. x
The City Centre project and four year capital forecast heavily rely on the use of external debt
(City and DC) financing. In the past, the City would use external debt financing, however, the
debt amount and its impact on the ARL was never an issue . With the City Centre project and
other future planned debt financed capital projects, there is a need to seek outside expertise to
develop a strategy that not only considers the historical low interest (borrowing) costs but also
considers a blended borrowing approach (medium and long term debt) that would strike a
balance between risk and cost. The work plan is to develop a debt financing strategy between
November and March (2022) and present the strategy at the March 2022 budget meeting .
j) Maximizing DC Funding for City Centre Development Start-Up Costs –
Recommendation 3. b. xi
The 2019 Capital Budget included $2.0 million for City Centre start-up costs funded from the
rate stabilization reserve. Many of these costs such as developing the legal agreements and
consulting resources for the RFPQ and RFP could be considered as part of the projects over
all cost. Any costs that are re-allocated as a capital cost, would result in being funded (in
theory) at the 53.25 percent DC level resulting in a transfer and or increase to the rate
stabilization reserve. Under this scenario, the City Centre cost ceiling approved by Council in
Recommendation 3a, would be increased to match the transfer to the rate stabilization
reserve.
k) Hiring of EllisDon Corporation to undertake consulting work related to
preconstruction for the City Centre – Recommendation 3. b. xii
Between now and April 2022, the City will be utilizing the expertise and experience of its DM’s
and EllisDon Corporation staff as it relates to preconstruction activities. These activities
includes tendering for the various building and construction components such as plumbing and
electrical and also engaging in a value engineering exercise to control and potential reduce the
overall project cost while maintaining program functionality.
l) The Master Agreement – Recommendation 4
The goal of Pickering’s new City Centre project (the “Project”) is to create a vibrant, connected,
and bustling downtown, where municipal service delivery, shopping and retail, and residential
- 18 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 15
intensification come together as the heart of the City. Pursuant to report CAO 07-19 dated July
22, 2019 (Attachment 3), City Council endorsed the non-binding Memorandum of
Understanding (“MOU”) outlining the main features of the Project and directed staff to
negotiate binding agreements to govern all the issues set out in the MOU. Pursuant to report
CAO 04-21 dated May 25, 2021 (Attachment 4), City Council approved, among other things,
the retainer of external legal counsel to assist with the negotiation of the various contracts
which define the Project. Consistent with both these reports, City staff have entered into
negotiations with Dentons LLP, the solicitors for OPB, with respect to an overarching Master
Agreement which, once finalized and signed, will contain binding obligations on both the City
and OPB with respect to the land transfers and the construction of the various facilities and
appurtenant services which will create the Project. City staff have been assisted in the
negotiation of the Master Agreement by Torys LLP and Deloitte LLP. These negotiations have
also involved Twopoint0 Partners Inc., the development manager for the City, and Cushman &
Wakefield Asset Services ULC, the development manager for OPB, and for the City's new
Seniors and Youth Centre.
The Master Agreement sets out all of the required agreements and obligations of the parties
necessary for the construction, development and operation of the Project. It includes a series
of land exchanges between OPB and the City and the construction on lands to be acquired
from OPB of the following new City facilities (collectively, the “New City Facilities”):
(i) New central library;
(ii) New Seniors and Youth Centre (“SYC”);
(iii) New Performing Arts Centre (“PAC”);
(iv) Pedestrian public square physically and visually connecting City Hall with the new
City facilities and the Pickering Town Centre Shopping Centre;
(v) Public Realm improvements, inclusive of a visually unifying surface treatment, from
the Public Square through Esplanade Park and Esplanade South to the Chestnut Hill
Development Recreation Complex;
(vi) underground parking with access to and from each of the New City Facilities and
OPB’s new rental apartment building; and
(vii) connecting roads, amenities and other improvements;
In addition, the Master Agreement addresses the construction by OPB (or an affiliate of OPB)
of a 50 storey rental apartment building to be constructed by OPB above the SYC.
The location of these facilities, and their orientation around the new public square are depicted
on the Master Plan (Attachment 5). This vision for the Project is consistent with Provincial
recognition of the site as an Urban Growth Centre and Mobility Hub.
In exchange for the lands to be acquired by the City, OPB (or a third-party at OPB’s direction)
will acquire from the City the South Esplanade Block, on which it is presently contemplated will
be constructed a mixed use residential development including a six storey pedestal bisected
by a public road and a pedestrian walkway, and two condominium towers, in conformity with
the requirements of City Zoning By-law 7719/19;
- 19 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 16
The Master Agreement addresses the servicing needs of the new City Facilities as well as the
new rental and condominium development, including sanitary sewer, storm sewer and water
service capacity. To facilitate the location of the new City Facilities and the residential rental
tower existing Regional water and sewer lines will be relocated from what is now the east
parking lot of the Pickering Town Centre Shopping Centre to Glenanna Road.
Since late May of this year, City staff, with the assistance of Torys LLP and Deloitte LLP, have
negotiated the terms of the Master Agreement with Dentons LLP (solicitors for OPB Realty
Inc.). Since that time, the parties have reached consensus (subject to Council approval) on
most of the significant business terms that define the role of each party in the Project. This
includes the Master Agreement terms regarding the site plan for the new City facilities, rental
tower and South Esplanade Block condominium development, the cost and operation of
shared facilities and the land transfers between the City and OPB Realty Inc. Attachment 2 is
the draft Master Agreement, together with a Memorandum from Torys LLP which sets out the
positions of the parties (and their substantial agreement) on the terms of the land swap and the
other main features of the Project. The Master Agreement is not ye t finalized, but it is
sufficiently complete to serve as a statement of the obligations of both parties with respect to
the Project.
A key feature of the Master Agreement is the exchange of lands between the parties. It is
important to note that staff have negotiated significant improvements to the terms of the land
swap since they were first set out in the non-binding MOU approved by Council in July of 2019.
Those improvements are summarized below:
1. Library – As of November, 2019, the expectation was that t he City would receive a
strata parcel of part of the OPB lands on which the new Library was to be built. No air
rights or other interests were to be conveyed. As of September, 2021, OPB has agreed
to convey fee simple (freehold) title to the City of the lands on which the Library will be
situated, together with easements for access and support. This increases the value and
long term usability of the Library lands.
2. City Parking Structure – As of November, 2019, the expectation was that the City
would receive a 99 year lease of a subsurface strata parcel of part of the OPB lands on
which the City’s Parking Structure (Level P1) would be built. As of September, 2021,
OPB has improved its proposal by agreeing to convey fee simple title to the City of a
strata parcel of part of the PTC land on which the City’s Parking Structure will be
situated, together with easements for access and support. It must also be noted that the
portion of the City Parking Structure lying below the Library will also be conveyed to the
City in fee simple. These improvements increase the value and usability of the City
Parking Structure.
3. Public Square – As of July, 2019, OPB proposed to give the City no interest
whatsoever in the public square area of the Project. As of November, 2019, OPB was
prepared to offer the City a 99 year lease of a strata parcel to accommodate the Public
Square. As of September, 2021, OPB has agreed to convey fee simple title to the City
of a strata parcel for the Public Square, together with easements for access and
- 20 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 17
support. This means that the City will, appropriately, remain the owner of its Public
Square in perpetuity.
4. Public Road – Before September, 2021, OPB proposed that the new local road
adjacent to the Library, Town Square and PAC would be a private road. As of
September, 2021, staff have obtained the agreement of OPB to make this a public road,
with ownership being transferred to the City. The transfer of this road to the City will be
a combination of fee simple (freehold), and strata parcel (where the road sits atop the
underground parking structure). Again, this improves the value and utility of the land
being conveyed to the City.
Outstanding Issues in the Master Agreement
The negotiations of the Master Agreement terms since May of this year have resulted in
resolution in principle of most of the fundamental business terms of the Project. That being
said, there remain some areas of concern which must be brought to Council’s attention:
1. Participation Covenant: The Master Agreement (and previously the non-binding MOU)
contemplates residential condominium development on the South Esplanade Block. To
enable this development, OPB intends to direct the transfer of the South Esplanade
Block to a developer experienced in residential condominium development. This aspect
of the Project is of significant value to OPB, and it is also important to the City, because
the development will result in assessment growth and an increase in property tax
revenues that will help defray the City’s project costs. If development of the South
Esplanade Block does not occur, the expected assessment growth will not materialize.
In an effort to protect the City from that possibility, staff have sought the agreement of
OPB and its transferee that, if development does not occur, and instead the South
Esplanade Block (or any part of it) is sold within five years, the City would be entitled to
a 50 percent share of the net profit realized on such sale. This commitment (referred to
as a “participation covenant”) was requested to deter land banking (i.e. the developer
simply electing not to construct the residential condominium development) and land
speculation (i.e. a subsequent ‘flip’ of the undeveloped South Esplanade Block for a
purchase price significantly in excess of that attributed to the lands as part of the land
swap arrangements with OPB). OPB is unwilling to make this commitment to the City.
2. Restrictive Covenants: The City is aware of certain restrictive covenants which affect
the OPB lands which the City will be acquiring. These restrictive covenants appear in
certain leases with tenants of the Pickering Town Centre Shopping Centre. The City i s
currently aware of two restrictions in particular, in favour of Farm Boy and Cineplex,
which as it currently stands, have a material impact on the proposed operation of the
new City Facilities. These restrictions will limit the ability of the City to hold a farmers’
market in the new public square, and will also prevent the City from showing videos or
films in any of the new City Facilities. These restrictions will need to be removed or
amended to enable the City to fully use the new City Facilities for their intended
purpose. Discussions are ongoing with OPB as to how these restrictions will be
addressed, but any resolution will require the agreement of both Farm Boy (Sobeys)
and Cineplex. There may be other restrictions which become apparent as further d ue
- 21 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 18
diligence is conducted on the OPB lands by the City. It must be noted that the draft
Master Agreement (Attachment 2) calls for the City to receive title to the lands for the
new City Facilities “free and clear” of such encumbrances, however, the risk remains
that OPB may not be able to obtain the agreement of its tenants to remove or amend in
a satisfactory manner, these restrictive covenants.
3. Environmental Condition of the South Esplanade Block : As part of the land swap terms,
the City is required to deliver the South Esplanade Block to OPB without any material
environmental contamination and following issuance of a Record of Site Condition
(“RSC”) from the Ministry of the Environment sufficient to permit the residential
development. The City has not yet undertaken environmental site assessments of the
South Esplanade Block to identify what, if any, contamination exists. To the extent any
such contamination does exist, the City will be required to remediate at its sole cost and
expense to the satisfaction of the Ministry. In addition, the timing for obtaining the
necessary RSC is unclear and could take upwards of four months from the time an
application is submitted to the Ministry. It is therefore unlikely that the RSC will be
available for the spring of 2022, when the closing of the land swap and commencement
of construction of the Project is anticipated.
Architect’s Agreement – Recommendation 5
Attachment 7 is the template Contract for Architectural Services between the City and
architects-Alliance. Architects-Alliance has provided architectural design and related services
for the Project since 2019, and has also been engaged by OPB Realty Inc. to design the rental
tower which will be located above the SYC. As Council may recall, the Project was put on hold
in 2020 due to the COVID pandemic. If Council proceeds with the Project, it will be important to
re-engage architects-Alliance to complete its design work, so that the parties can proceed to
the construction phase. The attached template Contract for Architectural Services has been
reviewed by City staff, the City’s Development Manager and Torys LLP, and contains terms
satisfactory to City staff.
Project Contracts Contemplated by the Master Agreement – Recommendation 6
The Master Agreement lists as schedules the various other contracts and documents which
must be finalized in order to completely define all aspects of the Project. These other contracts
and documents include the following:
(i) Agreement of Purchase and Sale f rom PTC Ownership to City;
(ii) Agreement of Purchase and Sale from City to PTC Ownership-South
Esplanade Block-substantially the same form as (i) above;
(iii) Reciprocal Operating Agreements for Library, SYC, PAC, Public Square
and City Parking Structure;
(iv) Parking Garage Development Management Agreement;
- 22 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 19
(v) Parking Management Agreement;
(vi) City and Region of Durham standard development and servicing
requirements;
(vii) City Centre Master Plan;
(viii) Draft Plan of Subdivision for the PTC Lands;
(ix) Legal Description of the Performing Arts Centre Parcel;
(x) Legal Description of the City Lands;
(xi) Legal Description of the Library Parcel;
(xii) Legal Description of the PTC Ownership Lands;
(xiii) Legal Description of the PTC Lands;
(xiv) Legal Description of the SYC Parcel;
(xv) Legal Description of the South Block Lands;
(xvi) Site Plan to be submitted under s.41 of the Planning Act;
(xvii) Architect’s agreements;
(xviii) CCDC 2 construction contracts; and
(xix) Shared Facilities Management Agreement.
Socio-economic Benefits of the Project
The capital expenditure by the City to construct the City Centre Project can be expected to
generate economic activity at the Provincial, regional and local level, contributing to Ontario’s
GDP, creating and maintaining jobs and generating tax revenues. The City of Pickering has
retained Deloitte LLP to provide a high level estimate of the potential economic contributions of
the Project and to profile selected socio -economic benefits that can also be expected. Below is
an excerpt of the quantitative analysis provided by Deloitte LLP. Additional details c an be
found in the Deloitte report, which is Attachment 6 to this report.
The total capital expenditure for the Project is estimated at $207.7 million. It is estimated that
the City of Pickering’s capital expenditure during the construction period could yield the
following economic contributions:
$0.96 of GDP for every dollar spent by the City of Pickering on the Project could be
generated for the Ontario economy;
$199.5 million in GDP, as well as 1,779 jobs (FTEs) created or maintained - 23 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 20
in Ontario;
$33.9 million in Provincial and municipal tax revenues, of which $18.9 million is at the
Provincial level and $15 million is at the municipal level.
The aforementioned estimates account for direct, indirect and induced economic contributions
from the construction of the project and are reported in 2021 Canadian dollars.
The table below provides more details:
Table 1 -Detailed estimated economic contributions
The totality of the City Centre project represents an important series of investments for the
local economy and community. As summarized by Deloitte LLP in Attachment No. 6, a number
of potentially lasting socio-economic benefits could be observed as a result of this major
capital investment including but not limited to:
1. The immediate spike in economic activity that can be expected during construction,
coupled with the longer-term benefits gained from new investments, could advance the
standard of living of the community and help contribute to local economic competitiveness.
The expected enhanced transportation networks (enhanced local road network) will help
local businesses and lead to positive economic outcomes.
2. The addition of approximately 3,692 new residential units is aligned to national action on
housing, and could help the Pickering increase available housing stock. Finally, the new
Library, SYC, and PAC can help support positive learning, health, mental health and skills
outcomes, and create new opportunities for the community to congregate and connect with
one another, and create new business opportunities for Pickering.
Notes:
While the construction of approximately 3,692 new residential units can be expected to
generate economic contributions, they are not accounted for in Deloitte’s review.
The economic contributions are estimated using an “Input -Output” methodology, which
traces how spending associated with the City’s capital expenditures contributes to the
economy by creating demand for goods and services across different industries.
- 24 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 21
h) Other Matters for Consideration
Civic Complex Parking Strategy
Pursuant to Recommendation 2. d of Report CAO 04-21 endorsed by Council on May 25,
2021, IBI Group was retained to undertake a parking strategy to review immediate and short
term parking needs for the Pickering Civic Complex area.
During the relocation of municipal services onto Glenanna Road between Kingston Road and
Pickering Parkway, the availability of parking on Glenanna Road and within the Esplanade
South parking lot will be impacted. As such, there will be a requirement to find alternative
parking for City staff and Civic Complex (Library and City Hall) patrons.
In order to determine existing and future parking demand, the consultant referenced the
Institute of Transportation Engineers Parking Generation Manual in lieu of conducting parking
utilization surveys given the on-going COVID-19 pandemic. Parking demand profiles were
generated, allowing hourly parking demands to be estimated based on time-of-day distribution
of parking demand.
Since peak utilization will increase above the 87 percent level with all parking available, there
is a requirement to find alternative parking. Once the Glenanna Road relocation of services
project commences, peak utilization will be 125 percent, therefore the requirement for
alternative parking will occur early in the City Centre project.
It has been determined that the best source of alternative parking is the existing gravel
overflow parking area that is located in the south east parking lot of the Chestnut Hill
Developments Recreation Complex. This parking area will require upgrades including asphalt
paving, line marking, lighting and security cameras in order to provide a safe environment an d
to maximize the number of parking spaces. The estimated cost to upgrade the parking area is
$400,000. A project cost of $270,000 was approved in the 2020 Capital Budget and the
funding source for this project is the casino reserve.
Risks & Opportunities
Stormwater Management
When the Pickering Town Centre Mall was being expanded in the 1980’s, the requirement for
storage of stormwater from major storms for the upstream drainage area was addressed by
providing on-site parking lot storage as a stormwater management facility. The parking lot was
designed and graded for approximately 7400 m 3 of water to be detained on the surface until
such time as downstream flows subsided.
The development of the south area of the Master Plan (Blocks 4, 6, 7 and 8) is in the area of
the storm water storage area. The consulting firm of Sabourin Kimble and Associates (SKA),
on behalf of Ontario Pension Board (OPB), have prepared a Preliminary Servicing and
Stormwater Management Report to address both the interim and ultimate solution for the
storage of stormwater on the site. SKA has determined that for Phase 1 of the Master Plan
(Blocks 1-9), some of the stormwater can be stored in underground chambers while some
- 25 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 22
stormwater can remain as surface storage by regarding the parking lot. For the ultimate
development of the site (Blocks 10-17 west of Phase 1), the storage of stormwater can be
addressed as either a combination of underground and surface storage, or stored entirely in
underground chambers. This issue may have financial implications for the City. If the project
proceeds, staff will endeavor to investigate the possible financial liability and report back at a
future date.
Transportation
In support of the City Centre Master Plan (Blocks 1-9 and the South Block), a report entitled
“Pickering City Centre Master Plan Review Urban Transportation Considerations” was
prepared by BA Consulting Group Ltd., and submitted to the Ministry of Transportation (MTO)
for review and comment.
In discussions with MTO prior to submission of this report, their staff raised no significant
concerns raised regarding the initial development consisting of the three City facilities, the
residential tower and the South Block. MTO did request that a traffic impact study be
undertaken. As such, City staff are not anticipating any significant requirements from MTO
such as Highway 401 interchange improvements in order to proceed with the first phase of the
Master Plan.
MTO is aware that the City will be issuing a Request for Proposals for a City Centre
Transportation Master Plan that will consider not only full build out of the City Centre Master
Plan, but also the transportation needs and impacts of other development projects either
underway, such as Universal City, or proposed along Kingston Road. Future development
projects could possibly trigger the need for improvements at critical Highway 401 interchanges
such as Brock Road, Liverpool Road and Whites Road. The Terms of Reference for the City
Centre Transportation Master Plan, which have been reviewed and accepted by MTO, include
studying existing and future traffic demands at these interchanges
Tillings Road Land Sales
The City’s Operations facility located at 2570 Tillings Road was vacated in July of 2019 when
Public Works moved to the new Operations Centre at 1955 Clements Road. The area of the
site used by Public Works at the Tillings Road site was the 10 acres immediately south of
Scenic Lane Drive. All buildings and above grade structures were demolished and removed in
2020. The City is currently completing an environmental site assessment and submission to
the Ministry of Environment prior to the final remediation and decommissioning of the site. The
Durham District School Board have expressed the intent to acquire up to 8 acres of the site as
the location of a future planned elementary school, once remediation is complete. Remediation
is anticipated to be completed in 2022, subject to final approval from the Ministry of
Environment.
The City intends to work with the Durham District School Board for the sale of land to
accommodate the new school and the goal is to obtain fair market price for the land . At this
time, it would be premature to attach a sales figure for the land, however, based on recent
experiences, City staff estimate a land value of $2.1 million of developable acre. Before the
land is sold, however, the City would engage a certified property appraiser . The net proceeds
- 26 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 23
from the land sale would be transferred to the Rate Stabilization Reserve to offset and or
reduce the dollar amount of identified debt financed capital projects. The remaining 2 acres at
the west end of the property would be retained by the City and staff will recommend to Council
re-purposing this land as a parkette amenity to provide passive green space in the
neighborhood.
City Centre Net Operating Costs Estimated Forecast
The following tables provide an estimate of the 2026 and 2027 net costs (based on 2021
costs) to operate the three City Centre buildings, underground parking garage (City portion)
and the Public Square based on an opening date of July 1, 2026. For 2026, the net operating
costs include pre-opening costs for the first six months and net operating costs for the
remaining six months of the year.
Naming Rights revenue has been included in each of the City buildings and the Public Square
estimated revenues for 2026 and 2027. The City had earlier engaged Sponsorship Canada to
value the naming rights for these assets. Sponsorship Canada provided the City with a 10 year
pricing range (High, Mid and Low) for selling the naming rights of each facility and the Public
Square. For this financial exercise, the mid-point naming rights pricing was used to estimate
the naming rights revenue. There are also additional revenue opportunities available by
obtaining naming rights revenue for internal large rooms/structures such as the Library
Auditorium. The internal naming rights revenue is not included in the City Centre cost
exercise.
Table Six
New Central Library Incremental Net Operating Costs
2026 2027
Expenses
Salary & Benefits
Building & Equipment Maintenance
Library Materials & Program Supplies
General Administration & Technology
Total Expenses
(July 1 opening date)
$816,320
195,040
43,250
374,395
$1,429,005
(full 12 months)
$1,019,365
293,380
57,500
351,630
$1,721,875
Revenues
Building Naming Rights
Other
Total Revenues
($50,000)
(22,625)
($72,625)
($100,000
(42,250)
($142,250)
Net Incremental Operating Costs $1,356,380 $1,579,625
Regarding the City Centre Library, incremental expenses and revenues for 2026 and 2027
have been identified that are in addition to the Central Library’s current expenses and
revenues and are based on a July 1, 2026 opening date and pre -opening costs.
The incremental cost to operate the City Centre Library is primarily for additional staffing (See
Table 10) followed by increased costs for building utilities and maintenance, general
- 27 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 24
administration and technology. Building naming rights revenue is estimated at $50,000 in 2026
(July 1st opening date) and $100,000 in 2027.
Table Seven
Performing Arts Centre Net Operating Costs
2026 2027
Expenses
Salary & Benefits
Building & Equipment Maintenance
Marketing & Promotion
Programming
General Administration & Technology
Total Expenses
(July 1 opening date) (full 12 months)
$1,426,825 $1,873,155
143,015 204,125
267,250 299,500
474,000 861,000
373,555 438,850
$2,684,645 $3,676,630
Revenues
Ticket Sales
Rental Revenue
Other
Building Naming Rights
Total Revenues
($646,500)
(255,600)
(304,150)
(62,500)
($1,268,750)
($1,293,000)
(511,200)
(608,300)
(125,000)
($2,537,500)
Net Operating Costs $1,415,895 $1,139,130
The largest driver of operating costs for PAC are salary and benefits followed by programming
costs, and marketing and promotion costs. The PAC’s operating costs are partially offset by
Ticket Sales, rental revenues and grants and donations. Building naming rights revenue is
estimated at $62,500 in 2026 (July 1st opening date) and $125,000 in 2027.
Table Eight
Public Square Net Operating Costs
2026 2027
Expenses (July 1 opening date) (full 12 months)
Salary & Benefits $128,965 $236,080
Public Square & Equipment Maintenance 156,150 203,600
Programming 25,500 37,000
General Administration 20,850 30,700
Total Expenses $331,465 $507,380
Revenues
Square Naming Rights ($30,000) ($60,000)
Total Revenues ($30,000) ($60,000)
Net Operating Costs $301,465 $447,380
The cost to operate the Public Square is largely due to salary and benefit costs (see table 10)
to maintain the public square (during all seasons) and equipment maintenance costs. Public
Square naming rights revenue is estimated at $30,000 in 2026 (July 1st opening date) and
$60,000 in 2027.
- 28 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 25
Table Nine
Seniors & Youth Centre Net Operating Costs
2026 2027
Expenses
Salary & Benefits
Building & Equipment Maintenance
Marketing & Promotion
Programming
General Administration & Technology
Total Expenses
(July 1 opening date)
$977,745
213,265
119,000
43,250
228,655
$1,581,915
(full 12 months)
$1,563,770
274,960
83,000
50,500
244,265
$2,216,495
Revenues
Programming
Other
Building Naming Rights
Total Revenues
(297,500)
(63,800)
(12,500)
($373,800)
(595,000)
(127,600)
(25,000)
($747,600)
Net Operating Costs
Less savings from ESCC closure
$1,208,115
(318,270)
$1,468,895
(636,590)
Net Incremental Operating Costs $889,845 $832,305
Regarding the new Seniors and Youth Centre (SYC), the 2026 and 2027 net costs to operating
the SYC have been calculated in the above table. Estimated savings from the closure of the
ESCC (subject to Council approval) have then been deducted to arrive at the net incremental
costs to operate the new SYC in 2026 and 2027.
The net cost to operate the SYC is largely due to salary and benefits costs for new staff
including an enhanced corporate security staff team (See Table 10) followed by building
utilities and maintenance costs, marketing and promotion costs for City programs and general
and administrative expenses, partially offset by programming revenues. Building naming rights
revenue is estimated at $12,500 in 2026 (July 1st opening date) and $50,000 in 2027.
Table Ten
Underground Parking Garage
Expenses 2026 2027
(July 1 opening date) (full 12 months)
Salary & Benefits $158,785 $213,895
Parking Garage & Equipment Maintenance 76,500 134,000
General Administration 17,875 14,500
Total Expenses $253,160 $362,395
Net Operating Costs $253,160 $362,395
The cost to operate the underground parking garage (City portion) is largely due to salary and
benefit costs (see Table 10) and parking garage and equipment maintenance costs. Revenues
- 29 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 26
have not yet been estimated until the City has completed its external underground parking
strategy.
Table Eleven
Additional Staff
Additional Staff (Full Time Equivalents or FTEs)
Facility 2025 2026 2027 Total Additional
FTEs
Central Library -16.9 (0.7) 16.2
PAC 2 23.0 -23.0
Public Square -3.5 0.4 3,9
SYC -20.4 -20.4
Underground Garage -2.8 -2.8
Total 2 66.6 (0.3) 68.3
The total Net City Centre Operating Costs will add $4.5 million to the City’s total 2026
operating expenditures which will increase the 2026 tax levy in the range of 4.5 percent to 5.5
percent. Usually, most municipalities construct and open one building. The City Centre project
consists of three buildings, underground parking garage and public square. As the construction
period comes to an end, there may be an opportunity to partially “Phase -in” the operating costs
over a few years. The estimated tax levy range between 4.5 and 5.5 percent will be in addition
to the City’s estimated average annual 2.5 percent tax levy increase that was used for financial
modelling purposes for this report.
Attachments:
1. 5-Year Capital and Operating Financial Plan dated October 14, 2021 by Watson &
Associates Economists Ltd.
2. Draft Master Agreement
3. Report CAO 07-19
4. Report CAO 04-21
5. Master Plan Excerpts
6. Deloitte LLP Socio-economic Contributions Summary
7. Contract for Architectural Services
- 30 -
FIN 15-21 October 21, 2021
Subject: City Centre Financial and Legal Implications Page 27
Prepared By: Approved/Endorsed By:
Original Signed By: Original Signed By:
James Halsall Paul Bigioni
Division Head, Finance Director, Corporate Services & City Solicitor
Approved/Endorsed By:
Original Signed By:
Stan Karwowski
Director, Finance & Treasurer
Recommended for the consideration
of Pickering City Council
Original Signed By:
Marisa Carpino, M.A.
Chief Administrative Officer
- 31 -
NATDOCS\56762896\V-3
DRAFT AGREEMENT –FOR DISCUSSION PURPOSES ONLY
MASTER AGREEMENT
THIS AGREEMENT made as of the day of , 20 ,
B E T W E E N:
THE CORPORATION OF THE CITY OF PICKERING
(hereinafter called the "City")
-and -
PTC OWNERSHIP REALTY INC.
(hereinafter called "PTC Ownership")
WHEREAS:
A.In 2018 the City and PTC Ownership announced a strategic partnership for the redevelopment of
PTC Ownership lands on the east side of the Pickering Town Centre and for the redevelopment of
City lands on the south side of Esplanade South, which redevelopment is known as the “City
Centre Joint Initiative”;
B.The parties share the goal of creating a vibrant, connected, and bustling downtown, where
municipal service delivery, shopping & retail, and residential intensification come together as the
heart of the City;
C.The vision for the City Centre Joint Initiative includes, among other things, a series of land
exchanges between PTC Ownership and the City and the construction on lands to be acquired
from PTC Ownership of a new:
(i)central library, and
(ii)seniors and youth centre, with a 50 storey rental apartment building to be constructed
above it, and
(iii)performing arts centre, and
(iv)a pedestrian piazza connecting City Hall with the new City facilities and the Pickering Town
Centre Shopping Centre, and
(v)public realm improvements from the Piazza through Esplanade Park and Esplande South
through to the Parks and Recreation Centre.
Attachment #2 to Report FIN 15-21
Attachment #2 to Report LEG 19-21
- 32 -
2
NATDOCS\56762896\V-3
(vi) underground parking with access to and from each of the new City facilities and residential
building, and
(vii) connecting roads, amenities and other improvements;
D. In exchange, PTC Ownership will acquire from the City certain lands which are referred to as the
“South Block Lands” on which will constructed, on a future date, mixed use residential including
two condominium point towers;
E. The parties have agreed on a master plan (the “City Centre Master Plan”) that describes the
development of the PTC Ownership lands and the City lands to be exchanged and developed in
accordance with City Centre Plan;
F. On July 22, 2019, Council endorsed a Memorandum of Understanding (“MOU”) dated July 16, 2019
between the City and PTC Ownership that formed the basis for negotiating the definitive
agreements necessary to implement the Master Plan and City Centre 2023 Plan, and including,
without limitation, this Agreement; [NOTE: THE LAST EXECUTED MOU FILES IS DATED
“AUGUST 6, 2019 UPDATED NOVEMBER 26, 2019”]
G. In 2019, the City initiated rezoning of the lands contemplated in the City Centre Master Plan and in
accordance with the MOU, to support the development of the City Centre Joint Initiative and the
development described herein;
H. The proposed use and development of the PTC Ownership lands and the City lands as described
in the City Centre Master Plan conforms with the City’s Zoning By-Law 7443/17;
I. The City has determined that adequate sanitary, storm and water service capacity exists to permit
the development of the South Block Lands as intended by PTC Ownership without delay, and
[NTD: 1) we should address that we are awaiting MTO’s consent - note MTO are reviewing
the off ramp implications from Brock to Whites Rd in Pickering because of the overall City
growth (presume and improvements will be part of the Levies?)]
J. The City and PTC Ownership have both actively engaged in and independently retained
consultants to assist with conducting the necessary due diligence to move forward with the City
Master Plan, , the contemplated land exchanges, and the definitive agreements necessary to
implement the City Centre Master Plan and City Centre 2023 Plan;
K. The affected lands are provincially recognized as an Urban Growth Centre and Mobility Hub, and
L. The City and PTC Ownership have agreed to enter into this Agreement with respect to setting out
the roles and responsibilities of each of them in all matters concerning the City Center Joint Initiative
and including the contemplated land exchanges, the construction of infrastructure and new facilities
and improvements, the entering into of the definitive agreements and all other matters related to
and necessary for the build out of the City Centre Master Plan.
NOW THEREFORE this Agreement witnesses that in consideration of the covenants contained herein, as
well as other good and valuable consideration and the sum of ten dollars ($10.00) of lawful money of
Canada, now paid to each of the parties by the other party (the receipt and sufficiency whereof are hereby
acknowledged), the Parties hereby covenant, promise and agree with each other as follows:
- 33 -
3
NATDOCS\56762896\V-3
ARTICLE 1
DEFINITIONS and INTERPRETATION
1.1 In this Agreement and the attached Schedules, the words and expressions listed in this Section
shall have the meanings set out below:
(a) “Agreement” means this executed master development agreement and its schedules, all
of which are incorporated by reference into and form part of the Agreement, as follows:
[NOTE: WILL WE HAVE ACTUAL FINAL OPERATING AGREEMENTS AND LEASE
TO ATTACH OR OUTLINE OF TERMS?]
(i) Schedule “A” - Agreement of Purchase and Sale from PTC Ownership to City -
Arts Centre Parcel
(ii) Schedule “B’ - Agreement of Purchase and Sale from PTC Ownership to City -
Library Parcel
(iii) Schedule “C” – Agreement of Purchase and Sale from PTC Ownership to City –
S Y & C Parcel
(iv) Schedule “D” - Agreement of Purchase and Sale from City to PTC Ownership-
South Block Lands
(v) Schedule “E” - Library Development Management Agreement
(vi) Schedule “F” – Library Reciprocal Operating Agreement
(vii) Schedule “G” – S & YC Development Management Agreement
(viii) Schedule “H” – S & YC Reciprocal Operating Agreement
(ix) Schedule “I” – Arts Centre Development Management Agreement
(x) Schedule “J” – Arts Centre Reciprocal Operating Agreement
(xi) Schedule “K” – Lease of Piazza and City Parking Structure
(xii) Schedule “L” – Piazza and City Parking Structure Reciprocal Operating
Agreement
(xiii) Schedule “M” – Parking Garage Development Management Agreement
(xiv) Schedule “N” - Parking Management Agreement
(xv) Schedule “O” - City and Region of Durham standard development and servicing
requirements
(xvi) Schedule “P” – City Centre Master Plan
- 34 -
4
NATDOCS\56762896\V-3
(xvii) Schedule “Q – Draft Plan of Subdivison for the PTC Lands [NTD: change
lettering on remainder of Schedules
(xviii) Schedule “Q” – Legal Description of the Arts Centre Parcel
(xix) Schedule “R” – Legal Description of the City Lands
(xx) Schedule “S” – Legal Description of the Library Parcel
(xxi) Schedule “T” – Legal Description of the PTC Ownership Lands
(xxii) Schedule “U” – Legal Description of the PTC Lands
(xxiii) Schedule “V” – Legal Description of the S & YC Parcel
(xxiv) Schedule “W” – Legal Description of the South Block Lands
(xxv) Schedule “X” – Legal Description of ●
(xxvi) Schedule “Y” – Legal Description of ●
(xxvii) Schedule “Z” - Site Plan to be submitted under s.41 of the Planning Act [NTD:
single site plan or multiple and phased?]
(xxviii) Schedule “AA” - Form of Architect’s agreement
(xxix) Schedule “BB” – Form of CCDC 2 construction contract
(xxx) Schedule “CC” – Memorandum of Understanding
(xxxi) Schedule “DD” – Schedule A1 to the MOU
(xxxii) Schedule “EE”● [NTD…Schedules to be confirmed]
(b) “Architects” means Architects Alliance including their subconsultants responsible for the
design of the City Facilities, Parking Garage,
(c) “PAC” means a 600 seat performing arts and concert hall to be built on the Arts Centre
parcel and to be owned and operated, directly or indirectly, by the City.
(d) "PAC Parcel" means the freehold parcel legally described on Schedule ● located at ●
within the existing PTC Lands, and to be conveyed by PTC Ownership to the City, and
upon which the PAC is to be situate, together with and subject to such support and
access easements as may be necessary for the use and enjoyment of such freehold
parcel and the adjoining improvements. [NTD: do we include the triangle Parkette ? –
yes make this part of Part 2]
(e) “PAC PTC Common Area" means ●[NTD; there is no common area between PAC
and PTC do not know where the definition will be used]
- 35 -
5
NATDOCS\56762896\V-3
(f) “PAC Development Management Agreement” means the agreement attached as
Schedule ● between the City and the City Development Manager to oversee the
procurement, design and construction, fixturing and interior fit out of the PAC on behalf of
the City.
(g) “City” means the Corporation of the City of Pickering
(h) City Centre means the City Facilities,
(i) “City Development Manager” means twopointO,
(j) City Facilities means the Library, PAC and SYC buildings
(k) “City Lands” means the lands to be conveyed to the City by PTC Ownership in exchange
for the South Block Lands to be conveyed to PTC Ownership by the City, and being
specifically the PAC Parcel, Library Parcel, and SYC Parcel.
(l) “City Parking Structure” means that portion of the Parking Garage located on the first
level thereof to be leased to the City under the City Parking Structure and Piazza Lease.
(m) "City Parking Structure and Piazza Lease" means the 99 year lease by which the
subsurface strata parcel for the City Parking Structure and the at grade parcel for the
Piazza are leased to the City, and which is attached as Schedule ●.
(n) City Public Realm Improvements means the Public Realm improvements on Glenanna
Rd through Esplanade Park, Esplanade South through to the Parks and Recreation
Centre.
(o) “City Shared Facilities” means the City facilities electrical vault and central plant that will
be located in the S&YC Parcel
(p) “Credits” [NTD: do we need to define the development and cost-sharing credits
that will accrue to PTC Ownership as a result of its contributions?]
(q) “Commercial Space” means commercial space within the Master Plan lands [NTD:
including the City facilities?] .
(r) “Cushman & Wakefield” means Cushman & Wakefield Asset Services ULC.
(s) “CW Development Manager” means Cushman & Wakefield.
(t) “Draft Plan of Subdivision” means
(u) “Definitive Agreements” means each the following ●
(v) “Development Charges” means ●
(w) “Effective Date” means ●
(x) “Future Development Parcels” means ●
- 36 -
6
NATDOCS\56762896\V-3
(y) “General Contractor” means ● the General Contractor retained pursuant to Section 4.3
(z) “Governmental Authorities” means the City acting in its regulatory capacity, Durham
Region and [NTD: is there a role for the conservation authority? Need to clarify any
other government authorities Check with Planning – conservation authority is not
an issue here. The City is storing upstream stormwater on the PTC site which we
have developed an interim solution for – we can discuss this in more detail on our
next call. We should add some reference about MTO as well.]
(aa) “Library Development Management Agreement” means the agreement attached as
Schedule ● between the City and the City Development Manager to oversee the
procurement, design and construction, fixturing and interior fit out of the Library on behalf
of the City.
(bb) “Library Parcel” means the strata parcel legally described on Schedule ● located at ●
within the existing PTC Lands, and to be conveyed by PTC Ownership to the City, and
upon which the Library is to be situate, together with and subject to such support and
access easements as may be necessary for the use and enjoyment of such strata parcel
and the adjoining improvements.
(cc) “Library PTC Common Area” means ● [NTD: there is no common area between
Library and PTC]
(dd) “Block Plan” means the nine blocks of land as defined in the City Centre Master Plan
and attached as Schedule ●.
(ee) “Master Plan Lands” means that portion of the PTC Lands which include Blocks 1 to 9
as shown in ● on Schedule ● that will be developed mutually with the City as part of the
City Centre Master Plan.
(ff) “Parking Garage Development Management Agreement” means the agreement
attached as Schedule ● between PTC Ownership and the C&W Development Manager
to oversee the procurement, design, construction, fixturing and interior fit out of the
Parking Garage.
(gg) “Parcels” means ●
(hh) “Parking Garage”” means a three-level underground parking garage structure to be
constructed by PTC Ownership , which includes the City Parking Structure, the Rental
Property Parking Structure and the Shared Facilities.
(ii) “Parking Management Agreement” means the agreement attached as Schedule ● to be
entered into between the Parties regarding the operation and management of the City
Parking Structure.
(jj) “Parking Structure PTC Common Area” means ●
(kk) “Parties” means PTC Ownership and the City collectively, and “Party” means one of
PTC Ownership or the City as the context determines.
- 37 -
7
NATDOCS\56762896\V-3
(ll) “Piazza” means the public exterior plaza to be located at grade over the City Parking
Structure including all related facilities and services, as shown hatched in green on
Schedule ●.
(mm) “PTC” means the Pickering Town Centre shopping centre.
(nn) “PTC Ownership” means the owner of PTC, who is PTC Ownership Realty Inc as of the
date hereof.
(oo) “PTC Ownership Contribution” means ●
(pp) “PTC Lands” means the lands legally described on Schedule ●. [NTD: this is the
definition for the existing shopping centre lands]
(qq) “PTC Ownership Contribution” means any financial cost-sharing as agreed to and
documented in this Agreement as well as PTC Ownership’s contributions to the sewage
and water pipe realignment along Glenanna Rd to align with City Facility relocation and
PTC Ownership’s contribution towards the cost of constructing the Piazza.
(rr) “PTC Residential” means the owner of the rental building to be constructed on the S&YC
Parcel above the S&YC.
(ss) “Public Realm Improvements” means the Piazza and City Public Realm Improvements
as shown in Green on Schedule DD.
(tt) “Rental Building” means the rental apartment building to be constructed on the S & YC
Parcel above the S & YC and owned by PTC Residential.
(uu) “Rental Building Parking Structure” means that portion of the Parking Garage located
on the second and third level thereof.
(vv) “Shared Costs” means ●.
(ww) “Shared Facilities” in respect of the City and PTC Residential means the shared entry
ramp to the first parking level, shared water / fire pump and telecom rooms, the storm
water meter room and storage tank as well as the shared loading dock, as shown in ● on
Schedule ●.
(xx) “SYC” means the Seniors & Youth Centre and related facilities and improvements
comprised of approximately 64,000 square feet and shown in ● on Schedule ●.
(yy) “SYC Parcel” means the strata parcel legally described on Schedule ● located at ● within
the existing PTC Lands, and to be conveyed by PTC Ownership to the City, and upon
which the SYC is to be situate, together with and subject to such support and access
easements as may be necessary for the use and enjoyment of such strata parcel and the
adjoining improvements.
(zz) "SYC PTC Common Area" means the lands outlined in ● on Schedule ● and adjacent to
the SYC, to which the general public will have access he City Centre as will the tenants
and patrons of PTC. [NTD: I believe this is intended to be the Piazza. Tenants and
- 38 -
8
NATDOCS\56762896\V-3
patrons of the shopping centre have access and egress (do we need an easement for
this?) to the Piazza through the mall doors but this is the City’s space
(aaa) “SYC Development Management Agreement” means the agreement attached as
Schedule ● between the City and the C&W Development Manager to oversee the
procurement, design and construction of the SYC on behalf of the City.
(bbb) “South Block Lands” means the lands legally described on Schedule ●, to be conveyed
to PTC Ownership by the City in exchange for the conveyance of the Library Parcel, PAC
Parcel and the SYC Parcel to the City by PTC Ownership.
(ccc) “South Block Plans” means the plans attached as Schedule ● [NTD: these plans
require a C of A approval]
(ddd) “twopoint0” means twopoint0 partners inc.
1.2 The documents that comprise this Agreement are complementary and what is called for by any
one of them shall be interpreted as if called for by all, except in the event of ambiguities, conflicts
or inconsistencies, in which case Section 1.3 shall apply.
1.3 In the event of ambiguities, conflicts or inconsistencies between or among any of the provisions of
this Agreement, the provisions shall govern in the following order of precedence with each taking
precedence over those listed subsequently:
(a) the provisions of amendments in writing to this Agreement signed by the Parties including
changes shall govern and take precedence only over those specific provisions of this
Agreement expressly amended thereby;
(b) any provision establishing a higher standard of safety, reliability, durability, performance
or service shall take precedence over a provision establishing a lower standard of safety,
reliability, durability, performance or service;
(c) the body of this Agreement;
(d) the Dispute Resolution Procedure set out in Article 11.
[NTD…..need paramountcy language regarding schedules if there is a conflict among the
schedules and this Agreement] NOTE: SCHEDULES WILL BE MORE DETAILED AND
SPECIFIC AND THEREFORE I THINK SHOULD GOVERN IN THE EVENT OF CONFLICT
ARTICLE 2
RECITALS AND SCHEDULES
2.1 The Parties agree that the recitals hereinbefore set out are true in substance and in fact, and that
the Recitals and Schedules form an integral part of this Agreement.
- 39 -
9
NATDOCS\56762896\V-3
ARTICLE 3
CO-ORDINATION OF DEVELOPMENT AND USE OF THE PUBLIC FACILITIES
3.1 The City and PTC Ownership have jointly submitted the City Centre Master Plan and the South
Block to the City’s Director of City Development.. The City Centre Master Plan will be presented
for the Planning Development Committee Approval on October 3rd 2021 and if approved there on
to City Council approval on October ●, 2021
3.2 The City has made a preliminary site plan submission for the Library, PAC and SYC to the City’s
Director of City Development. The City Planning Department is in general satisfied with the site
plan submissions subject to the satisfaction of the customary site conditions and formal sign off
from the Authorities having jurisdiction. [NTD: the City Planning Department has NOT signed
off to date but will have if the Parties sign this agreement]
3.3 PTC Ownership has made a preliminary site plan submission for the Rental Building, Commercial
Space and South Block to the City’s Director of City Development. The City Planning Department
is in general satisfied with the site plan submissions subject to the satisfaction of the customary
list of site conditions and formal sign off from the Authorities having jurisdiction. [NTD: the City
Planning Department has NOT signed off to date but will have if the Parties sign this
agreement]
3.4 PTC Ownership will submit a Draft Plan of Subdivision for the Master Plan Lands based on the
City Centre Master Plan to the City’s Director of City Development. Provided that the Draft Plan of
Subdivision conforms with the City Centre Master Plan, the City will support PTC Ownership in
this application.
3.5 The Parties will determine by the time an application for subdivision approval is submitted at the
latest, which roads will be privately held and which roads will be assumed by the City as public
roads.
3.6 The City shall have sole responsibility for programming and issuing permits for use of the Piazza,
as well as for insuring it in regards to its use. The Parties agree that the City may temporarily
close the Piazza to vehicular traffic from time to time as the City sees fit and to support
programming.
3.7 The City will ●[NTD…should we have a covenant obligating the parties to execute the
Definitive Agreements? Should we have language obligating PTC Ownership to cause
PTC Residential to execute agreements as applicable?] NOTE: I THINK A COVENANT TO
EXECUTE OR CAUSE TO BE EXECUTED BY THE APPLICABLE PARCEL OWNERS WOULD
BE APPROPRIATE
ARTICLE 4
CONSTRUCTION OF CITY AND SHARED BUILDINGS
The Parties agree that to facilitate and support the development of the City Lands (including the Rental
Building) and the future development of the South Block, reciprocal easements will be granted between
each of the Parcels to ensure pedestrian and vehicular access, installation of servicing, construction
- 40 -
10
NATDOCS\56762896\V-3
phasing and shared facilities. [NTD…do we need language obligating the parties to consent the
easements, etc?]
4.1 The City and PTC Ownership have independently retained the Architect to develop an integrated
design for the City and PTC Ownership buildings making up City Centre.
4.2 The City and PTC Ownership confirm that PTC Ownership has retained Cushman & Wakefield as
development managers to oversee the design, development, and construction of the Parking
Garage, SYC, Rental Building and the Commercial Space. The City and PTC Ownership confirm
that twopointO has been retained by the City to oversee the design, development and
construction of the Library, PAC and the Public Realm Space.
4.3 To benefit from cost efficiencies and to ensure optimal coordination of construction activity, the
City and PTC Ownership have independently retained the same General Contractor using the
same CCDC2 form of contract. The General Contractor will be responsible for the construction of
all Building(s) [NTD; add a definition for ‘Building’ from DoW] save and except those to be
constructed on the South Block.
4.4 The City is responsible for the construction of the Library, PAC, SYC and the Public Realm
Space. PTC Ownership will be responsible for the construction of the Rental Building,
Commercial Space, Parking Garage and PTC Public Realm Improvements. In addition, at the
time of the demolition of the old PTC theatres, PTC Ownership shall construct the Library/PTC
shared loading facility [NTD: we need to pick up how the City reimburses PTC Ownership for
their portion of this cost.]
The work to be completed by each Building by the respective Party and the easements required
through Adjacent Building(s) [NTD: add a definition for ‘Adjacent Building’] are detailed in the
Delineation of Work (DoW) between the Parties as attached in Schedule ● [NTD: clarify any
wording required in the DoW rather than attempting to restate the work in this Master
Agreement as the DoW will be used by the Architects, Cost Consultants and General
Contractor to define what goes in each Building]
4.5 The General Contractor will have individual construction contract (and therefore take instructions
only) from the City respecting the construction of each of the Library, PAC, SYC and Public
Realm Improvements. The General Contractor will have individual construction contract (and
therefore take instructions from PTC Ownership) respecting the construction of each of the Rental
Building, Commercial Space, Parking Garage and PTC Public Realm Improvements [NTD: need
to add PTC Public Realm Improvements to the definitions].
4.6 [NTD: Add Cross-default provisions to protect the Parties in the event of a default by the
General Contractor in any one of the buildings. Also, need to add wording to protect both
Parties once the work proceeds - both Parties are depending on the performance of the
other once the work commences]
4.7 The Parking Garage, including the City Parking Structure, shall be constructed by PTC
Ownership, subject to the reimbursement by the City to PTC Ownership for the City Parking
Structure costs. The City Parking Structure will be designed and constructed in accordance with
plans and specifications reviewed and approved by the City and PTC Ownership. PTC Ownership
has enter into contracts with C&W Development Manager, the Architects, the General Contractor
- 41 -
11
NATDOCS\56762896\V-3
respecting the design and construction of the Parking Garage (including the City Parking
Structure). PTC Ownership and the City will approve in writing the Parking Garage Budget and….
[NTD: we need to articulate in this section how the Parties will approve the progress draw
payments to the contractor (even though the City does not pay until the work is
substantially complete]
4.8 The shared City Centre vision contemplates common hard and soft landscaping treatment from
the Piazza, Glendale Avenue, South Esplande and Esplanade Park through to the Parks and
Recreation Centre. The City shall be responsible for constructing the Public Realm Improvements
with a $6.3M contribution from PTC Ownership. The Parties have agreed to provide further
definition as to the hard and soft landscaping materials to be used throughout the public realm
space bench marked against the specification used to establish the PTC Ownership Contribution.
The Parties have agreed that the Public Realm Improvements will be completed prior to
occupancy of the City Facilities, and the City will use all commercially reasonable efforts to effect
the completion of same to ensure timely occupancy of the City Facilities. The PTC Ownership
payment for their portion of the Public Realm Improvements to the City will be made when the
Public Realm Improvements are Substantially Complete (as defined in the CCDC 2 contract)
4.9 Prior to commencement of construction of the Parking Garage the City will be responsible for the
Phase 1 relocation of the existing sanitary and storm sewers, and the existing watermain from
the PTC Lands to Glenanna Road as well as the reinstatement of Glenanna Rd. PTC Ownership
will be responsible for the Phase 2 relocation of the existing sanitary and storm sewers, and the
existing watermain from the PTC Lands to Glenanna Road, including the reinstatement of
Glenanna Rd. all as shown on Schedule ●. PTC Ownership may elect to complete the Phase 2
relocation concurrently with Phase 1 or at such later date as may be determined by PTC
Ownership and agreed by the City. In the event PTC Ownership does not elect to commence the
Phase 2 relocation concurrently, the City at its expense will tie the relocated Phase 1 services
into the existing services on the PTC Lands. [NTD: The City has taken the lead on the
relocation of services. Is the City going to oversee this work? Should we investigate
converting PTC Ownership Phase 2 service relocates to cash in lieu?]
4.10 [NTD: Overview of Service Capacity and Consent from Authorities Having Jurisdiction -
City to confirm that there is adequate service capacity to complete the Master Plan. MTO
capacity still to be determined if not available by the time this is signed what do we do?
Confirm that City to carry out ‘interim stormwater relocation’ at such a time as Block 6, 7
and 8 are ready for development (PTC Ownership to provide access to the Bay South lot to
make the necessary modifications). Lastly, need confirmation from the Region that a
pumping station is not required]
4.11 No work shall be commenced by either Party and/or its contractors until it has filed with the other
Party a certificate of public liability insurance with reasonable coverages, in accordance with this
Agreement and which are then acceptable with the City, acting as a municipality, or other
applicable Governmental Authorities having jurisdiction and which insurance coverages and
terms are mutually agreed upon by the Parties, acting reasonably. All costs related to such
insurance shall be included in the Shared Costs.
- 42 -
12
NATDOCS\56762896\V-3
ARTICLE 5
OPERATION OF MASTER PLAN FACILITIES
5.1 The City will be solely responsible for the maintenance and operation of the City Facilities, and
PTC Residential will be solely responsible for the maintenance and operation of the Rental
Building.
5.2 External common areas shall be operated and maintained by ● [NTD each Party responsible
for their own with the exception of snow removal which makes sense to be shared]
5.3 The City Parking Structure shall be operated and maintained by the City. PTC Residential shall
operate and maintain the Rental Building Apartment Structure and the Shared Facilities. The
Shared Facilities will be maintained in accordance with the Shared Facilities Management
Agreement.
5.4 The Parties have agreed that the roads shown in ● on Schedule ● will be private roads to be
operated and maintained by PTC Ownership, and the roads shown in ● on Schedule ● will be
assumed by the City as municipal roads to be operated and maintained by the City. [NTD: Lets
look at this plan – there is a plan to have one road initially as an easement which would
become a public road in the future.]
5.5 PTC Ownership will develop the South Blocks independent of the City, except for its role as a
regulator / Government Authority. [NTD: confirm that the City is generally satisfied with the
South Block plans subject to customary site plan review. Confirm the public road and
walkway over the South Block to CAPREIT lands. Confirm C of A support to plan changes
as a result of CAPREIT settlement]
ARTICLE 6
OWNERS’ COMMITTEE
6.1 Final decisions on the matters set out in this Agreement, or any of the Definitive Agreements shall
be made by the Committee, subject to ratification by City Council and PTC Ownership. It is the
role of the Committee to advance the decision-making to a place where it can be presented to
Council for final approval.
6.2
(a) The Committee shall consist of:
(i) representing the City, Paul Bigioni, ● and
(ii) representing PTC Ownership, ● [NTD…do we need PTC Residential too?]
(b) The City and PTC Ownership agree that the following provisions apply to the Committee
in carrying out its mandate:
(c) The City and PTC Ownership may each have advisors present at Committee meetings.
- 43 -
13
NATDOCS\56762896\V-3
(d) All decisions shall be made by unanimous consent of the Committee.
(e) The Committee shall be responsible to finalize drafts and make recommendations in
respect of finalization of the architects agreement template, the template agreement with
the General Contractor, the agreement of purchase and sale template, and any other
related matters to be presented to Council for final approval.
(f) Each of the parties agrees to be bound by, adopt and implement all of the decisions of
the Committee, subject to any limitations on authority noted herein. The decision of a
Committee Member with respect to a specific matter will be deemed to be the decision of
the party who has appointed such Committee Member.
(g) The Committee shall use their best efforts to prevent any deadlock in the decision-
making process, and, in the event of a deadlock, the parties shall submit the matter for
consideration by their respective senior management.
(h) Either party shall be entitled at any time to remove any of its Committee Member by
notice to such Committee Member and the other party, and nominate a successor who
shall, effective upon removal of the existing Committee Member, be appointed a
Committee Member to replace the Committee Member so removed.
(i) The Committee shall endeavour to meet bi-weekly during the period until the agreements
are approved by Council, and may choose to meet thereafter to assist in the development
process. Any Committee Member may call a meeting of the Committee at any time on
five (5) business days prior written notice to the other Committee Members. With respect
to all meetings of the Committee, the Committee Member calling such meeting shall
issue a written notice in respect of such meeting that indicates the time and place of the
meeting and provides a summary of the matters to be considered.
(j) A quorum for meetings of the Committee shall consist of four (4) members of the
Committee, provided that at least two (2) Committee Member representing the City and
two Committee Members representing PTC Ownership are present. Committee
Members may attend meetings in person or by proxy, and they may also participate in
the meeting by means of conference call or similar communications equipment that
permits all Committee Members to hear each other. Any action required or permitted to
be taken at any meeting of the Committee may be taken without a meeting if one or more
written consents to such action shall be signed by a quorum of Committee Members or
otherwise by or on behalf of the parties.
ARTICLE 7
COST SHARING
7.1 Subject to the provisions of this Agreement, costs not otherwise apportioned will be shared by the
parties on the following basis:
(a) in respect of the Parking Garage,
- 44 -
14
NATDOCS\56762896\V-3
(i) PTC Ownership shall pay 61.1 % of the total costs, including contract
administration and subject to the further provisions of this section.
(ii) City shall pay 38.9 % of the total costs, including contract administration and
subject to the further provisions of this section.
(iii) The City and PTC Ownership shall each be responsible for paying half the cost
of the entry ramp to the P1 parking level.
(iv) PTC Ownership shall be responsible for paying 100% of the costs of ramp
construction and gates or other security features related to the PTC Residential
Parking.
(v) The City shall be responsible for the costs and necessary action to operate and
maintain the City Parking Structure, and shall commission and provide to PTC
Ownership copies of engineering certificates verifying appropriate maintenance
has been carried out, every five years.
(vi) PTC Ownership shall be responsible for the costs and necessary action to
maintain the Residential Parking Structure, being levels 2 and 3 of the Parking
Structure, and shall commission and provide to the City copies of engineering
certificates verifying appropriate maintenance has been carried out, every five
years.
(vii) The City and PTC Ownership shall share equally all costs associated with the
construction, operation and maintenance of the Shared Facilities. The Shared
Facilities will be operated and maintained in accordance with the Shared
Facilities Management Agreement.
(b) in respect of the Piazza, PTC Ownership shall pay the total costs of construction, and the
City will assume the Piazza as a municipal facility, and shall be responsible for the
operation and maintenance and operations costs of the Piazza, including without
limitation, all landscaping, lighting, walkways, driveways, furniture and other
improvements within the Piazza. [NTD: need to set out responsibility for landscaping,
furniture, lighting, etc.]
(c) the City shall be responsible for paying all costs of construction, maintenance and
operations of the Library, to be provided for in the Library Development Management
Agreement.
(d) the City shall be responsible for paying all costs of construction, maintenance and
operations of the Arts Centre, to be provided in the Arts Centre Development
Management Agreement.
(e) PTC Ownership shall be responsible for paying all costs of construction, maintenance
and operation of the PTC Residential.
(f) The City shall be responsible for paying all costs of construction, maintenance and
operation of the SYC.
- 45 -
15
NATDOCS\56762896\V-3
(g) the City and PTC Ownership shall share the cost of maintaining and operating shared
external common areas as identified on Schedule ●[NTD: who pays hard and soft
landscaping, street furniture , lighting and drainage pipe and waterproofing over
parking garage –not clear from dow]
(h) the City and PTC Ownership will each be responsible for paying any costs related to the
Shared Facilities [NTD…see delineation of work document]
(i) the Parties agree that neither the City or PTC Ownership shall terminate, amend or
otherwise modify the scope or the shared costs agreed to because to do so would
materially and adversely affect the ability of the Parties to undertake the Master Plan
development, and could increase the potential for liability.
[NTD: We assume that details respecting invoicing and payment of construction that is cost-
shared, will be set out in the construction agreements. Please advise if it should be added here]
NOTE: SHOULD BE ADDED HERE. PARTIES TO THE CONSTRUCTION CONTRACTS MAY BE
DIFFERENT THAN THE MASTER AGREEMENT?
[NTD: to what extent are the normal development and servicing requirements be included in this
Agreement? I think it is important to cover them off to the greatest extent possible]
[NTD…..need language confirming that PTC Ownership has satisfied its parkland dedication
obligations and no cash in lieu will be required]
ARTICLE 8
CITY FEES AND CHARGES, AND APPLICABLE CREDITS
8.1 PTC Ownership acknowledges that it will be responsible for the payment of all development
levies, fees and charges that would normally apply from all Governmental Authorities when
developing land within the City including but not limited to application fees, development
charges, parkland cash in lieu, and community benefits charges and subject to credits that may
apply. [NTD…to be confirmed]
8.2 The City accepts responsibility for paying all applicable fees and charges that may apply from all
Governmental Authorities in respect of the construction and operation of the City Facilities and it
will not seek any development levies, fees and charges from PTC Ownership in respect of the
- 46 -
16
NATDOCS\56762896\V-3
City Facilities, regardless of who has responsibility to construct or maintain such facilities. For
clarity, this includes the City Parking Facility and the Piazza.
8.3 The City acknowledges that certain of the works to be carried out by PTC Ownership under this
Agreement may be eligible for credits against applicable City and Durham Region Development
Charges and the City agrees to apply any such credits.
8.4 PTC Ownership will pay applicable Development Charges in accordance with the provisions of
By-Law # 7595/17 as amended, and Durham Region By-Law # 28-2018 as amended before the
first above ground permit is issued for each building.
8.5 Certain capital infrastructure is required to build out the Master Plan, and the Parties may work
together to consider whether front-end financing under s. 44 of the Development Charges Act or
construction as a municipal capital facility under s. 110 of the Municipal Act, 2001 should apply.
ARTICLE 9
LAND TRANSFERS
The Parties agree that the lands to be transferred between them are to be of equivalent value, and that
this has been confirmed by market appraisals undertaken by ● and dated ●. And furthermore that any
difference has been made up through costs PTC Ownership (PTC Ownership Contributions) has
assumed that go beyond fees and charges that would normally apply.
9.1 Separate agreements of purchase and sale will be entered into for each parcel or strata parcel of
land to be conveyed within the Master Plan.
9.2 The parties agree that the proposed land severances are required to implement the Master Plan
development as approved by the Parties and that they will [NTD: option of deal with through
the plan of subdivision or jointly apply to the Durham Region Land Division Committee
and support the technical land severance consents required to convey the land parcels
contemplated by this Agreement.] NOTE: DO WE NEED PROVISION TO ALLOW FOR THE
STRATA PARCELS TO BE ADJUSTED ONCE STRUCTURES ARE COMPLETE?
9.3 The Parties will agree on a date for the land transfers to take place, following approval of this
Agreement by City Council and by PTC Ownership.
9.3.1 The Parties agree that PTC Ownership reserves the ability to determine who will take title
of the South Block lands to be acquired from the City.
9.4 The Parties agree that as conditions of consent to sever the land, all required reciprocal support
and access easements for both vehicles and pedestrians shall be finalized for all lands within the
Master Plan as well as general easements to provide rights-of-way for the maintenance and
repair of buildings on adjacent lands, the installation of utilities and services, rights of support,
emergency egress and temporary construction access.
[NTD….Land transfer tax considerations]
- 47 -
17
NATDOCS\56762896\V-3
ARTICLE 10
REPRESENTATIONS and WARRANTIES
10.1 The City represents that it has authority to enter into this development Agreement.
10.2 PTC Ownership represents that it has authority to enter into this development Agreement.
10.3 The City represents that it will provide PTC Ownership, twopoint0 and Cushman Wakefield with
an “ambassador level of service” in respect of obtaining all necessary approvals required to
construct this project.
[NTD: Additional reps and warranties to be added once further information is available]
ARTICLE 11
Dispute Resolution
11.1 A Party may give written notice of a difference with respect to any determination under this
Agreement, or the interpretation, application or administration of this Agreement to the other
Party. Such notice shall describe the particulars of the matters in dispute. The other Party shall
reply to such notice no later than twenty (20) business days after they receive it or are considered
to have received it, setting out in such replies their position regarding the matters in dispute.
11.2 Where a notice and replies have been given, if the Parties fail to resolve the dispute within ten
(10) business days after delivery of all replies within the period of time described above, each
Party, within five (5) business days thereafter, shall nominate a senior officer of its management
to meet at a mutually agreeable place and time to resolve the matters in dispute. Should the
Parties be unable to resolve the dispute to their mutual satisfaction within a further thirty (30) days
after such nomination, then either Party may give written notice to the other Party requiring that
the dispute be referred to mediation under Section 11.2.
11.3 The mediation shall be held within sixty (60) days following the date of notice given by a party
requiring that the dispute be referred to mediation.
11.4 Within ten business (10) days following the end of such notice, the Parties shall jointly select and
appoint a skilled and experienced mediator to assist the Parties to reach an agreement through
mediation.
11.5 The mediation shall be conducted under such mediation rules as the mediator recommends and
the cost of mediation shall be shared equally by the Parties. Any settlement reached by
mediation shall be set forth in writing, shall be signed by the Parties and shall be final and binding
on them. If the Parties fail to agree on a mediator within such ten (10) business day period or the
dispute is not resolved to the mutual satisfaction of the Parties (as evidenced by the written
- 48 -
18
NATDOCS\56762896\V-3
agreement referenced herein) within sixty (60) days following the selection of the mediator as
provided herein, then Section11.3 shall apply with respect to such dispute.
11.6 Either Party may elect to refer this matter to binding arbitration by a single arbitrator selected and
paid for proportionately by both Parties.
ARTICLE 12
NOTICE
12.1 Any notices, requests, demands, instructions, certificates, consents or other communications
required or permitted under this Agreement shall be in writing and delivered under this Agreement
shall be delivered,
(a) to the City:
Attention:
Email:
And
Attention:
Email:
(b) To PTC Ownership:
Attention:
Email:
12.2 A notice given by email or by hand delivery to the persons identified above, shall be deemed to
have been received on the day it is delivered, subject to:
(a) a notice delivered or transmitted on a day that is not a business day or on a business day
after 4pm EST, shall be deemed to have been received on the next business day;
- 49 -
19
NATDOCS\56762896\V-3
(b) a notice delivered by email shall be deemed to have been received only if and when the
recipient acknowledges receipt of such email by reply email or by otherwise
acknowledging receipt in writing.
ARTICLE 13
REMEDIES
13.1 1If at any time or from time to time a Party does not advance its responsibilities under this
Agreement, such Party is hereinafter referred to as a “Defaulting Party” and the other Party as
“Non-Defaulting Party”. In the event of default as aforesaid and should such default continue for
five (5) days after written notice thereof is given to the Defaulting Party by the Non-Defaulting
Party, the Non-Defaulting Party may elect to demand the Defaulting Party remedy the Default
within a specified time. [NTD: we have used clauses that would allow the non-defaulting
party to notify the Defaulting Party’s bonding company to demand the bonding company
assume responsibility. Is this something we want to consider as a way to keep the project
moving? If yes, we would suggest putting some construction clauses in this Agreement
as well as the construction contracts. Additionally we may want to have each Party named
as an additional insured on the other’s coverage]
[NTD….should there be language inserting a predetermined damages amount should either party
abandon its obligations under this Agreement or any Definitive Agreement?]
13.2 Force Majeure
In the event either shall be delayed or hindered in or prevented from the performance of any act
required to be performed by such party by reason of Acts of God, strikes, lockouts, unavailability
of materials or services, failure of power, prohibitive governmental laws or regulations, delays in
issuance of governmental approvals, riots, insurrections, the act or failure to act of the other
party, adverse weather conditions preventing the performance of work as certified to by an
architect, war or other reason beyond such party's control, including in respect of a pandemic
which impacts labour availability, then the time for performance of such act shall be extended for
a period equivalent to the period of such delay. Lack of adequate funds or financial inability to
perform shall not be deemed to be a cause beyond the control of such party.
13.3 The Party claiming relief shall notify the other as soon such an event occurs and shall also notify
the other Party as soon as the consequences of the event of Force Majeure have ceased, and of
when performance of its affected obligations can be resumed.
13.4 If, following the issue of any notice referred to in this section, the Party claiming relief receives or
becomes aware of any further information relating to the event of Force Majeure and/or any
failure to perform, such Party shall submit such further information to the other Party as soon as
reasonably possible.
13.5 Insured Exposure [NTD: Do we want this here or in the construction agreements? ]
The compensation payable to the Non-defaulting Party pursuant to this Section 13shall be
reduced by any amount which the Non-Defaulting Party recovers, or is entitled to recover, under
- 50 -
20
NATDOCS\56762896\V-3
any insurance policy, or would have recovered if it had complied with the requirements of this
Agreement in respect of insurance or the terms of any policy of insurance required under this
Project Agreement, which amount, for greater certainty, shall not include any excess or
deductibles or any amount over the maximum amount insured under any such insurance policy.
13.6 Modifications
The Parties shall use commercially reasonable efforts to agree to any modifications to this
Agreement which may be equitable having regard to the nature of an event or events of Force
Majeure. The Dispute Resolution Procedure set out in Article 11 shall not apply to a failure of the
City and PTC Ownership to reach agreement pursuant to this Article 13.
ARTICLE 14
CONFIDENTIALITY
14.1 Each Party shall keep confidential the terms of this Agreement and of all negotiations related to
the Master Plan and redevelopment of the site, except to the extent disclosure is necessary to
inform their individual professional advisors, potential lenders or investors, or the officers,
directors, Members of Council or employees of each Party to the extent they have a need to
know.
14.2 All dispute resolution proceedings shall be strictly confidential, and each Party shall have a
fiduciary obligation to the other to protect, preserve and maintain the integrity of such
confidentiality.
14.3 Neither Party shall issue any news release or other public announcement or communication
about this Agreement and its contents without the prior written approval of the other party.
14.4 The Parties agree that any public notice to third parties, including the City, and any media release
or publicity issued concerning the redevelopment of the Site shall be jointly planned and
coordinated by the Parties.
14.5 For purposes of the Municipal Freedom of Information and Protection of Privacy Act, the parties
agree that the contents of this Agreement, and the agreements to be negotiated and all related
documents constitute financial and commercial information the disclosure of which will harm the
economic interests of the City and PTC Ownership if disclosed.
- 51 -
21
NATDOCS\56762896\V-3
ARTICLE 15
GENERAL
15.1 The headings in the body of this Agreement form no part of the Agreement but shall be deemed
to be inserted for convenience of reference only.
15.2 The Schedules attached hereto form an integral part of this Agreement.
15.3 This Agreement shall be construed with all changes in number and gender as may be required by
the context transmitted (as the case may be).
15.4 PTC Ownership may assign, transfer, or otherwise dispose of this Agreement in whole or in part
without the consent of the City provided that the person to whom any such assignment, transfer
or disposition has the legal capacity, power and authority to accept such assignment, transfer or
disposition, and agrees in writing with the City to be bound by and to perform all the obligations of
PTC Ownership that have been assigned, transferred or disposed.
15.5 Any amendment to or waiver of any provision of this Agreement must be in writing and signed by
the Parties.
15.6 If any covenant or provision of this Agreement, including all or any part of this clause, is
determined to be invalid or unenforceable in whole or in part, such invalidity or unenforceability
shall attach only to such provision and all other provisions hereof shall continue in full force and
effect.
15.7 Furthermore, in lieu of such illegal, invalid or unenforceable provision, there shall be added
automatically as part of this Agreement, a provision as similar in its terms to such illegal, invalid or
unenforceable provision as may be possible and be legal, valid and enforceable, in order to
effectively implement and carry out the true intent and meaning of this Agreement.
15.8 This Agreement shall be construed and enforced in accordance with, and the rights of the Parties
shall be governed by, the laws of the Province of Ontario and of Canada applicable thereto, and
the Parties submit to the jurisdiction of the courts of the Province of Ontario.
15.9 If at any time during the continuation of this Agreement, the Parties shall deem it necessary or
expedient to make any alteration or addition to this Agreement, they may do so by means of a
- 52 -
22
NATDOCS\56762896\V-3
written agreement among all of them which may be signed in counterparts, which shall be
supplemental and form part of this Agreement.
15.10 It is agreed that there is no representation, warranty, collateral agreement or condition affecting
this Agreement except as expressed in it.
15.11 Any reference in this Agreement to any law, by-law, rule, regulation, order or act of any
government, governmental body or other regulatory body shall be construed as a reference
thereto as amended or re-enacted from time to time, or as a reference to any successor thereto.
15.12 Time shall be of the essence with respect to all time limits mentioned in this Agreement.
15.13 This Agreement may be executed in counterparts.
IN WITNESS WHEREOF the parties hereto have executed this Agreement.
THE CORPORATION OF THE CITY OF PICKERING
Per: ___________________________________
Name:
Title:
Per: ___________________________________
Name:
Title:
I/We have authority to bind the City
PTC OWNERSHIP REALTY INC.
Per: ___________________________________
Name:
Title:
Per: ___________________________________
Name:
Title:
I/We have authority to bind the Corporation.
- 53 -
32990746.5
NATDOCS\58116755\V-1
MEMORANDUM
PRIVILEGED AND CONFIDENTIAL DENTONS COMMENTS SEPTEMBER 24, 2021
To OPB Realty Inc.
Dentons LLP
Date September 20, 2021
(original draft dated
August 25, 2021)
From Torys LLP
The Corporation of the City of Pickering
Re Pickering City Centre Redevelopment – Draft Master Agreement (revision dated
as of July 21, 2021) (the “Agreement”)
City staff and advisors have undertaken an initial review of the Agreement. The following
memorandum reflects the preliminary comments, questions and proposals of the City.
We would be happy to facilitate a detailed review and/or provide further information on any of
the comments below and look forward to advancing the Agreement with you.
All capitalized terms used in this memorandum shall have the meanings ascribed to such terms
in the Agreement.
General Comments
1. The Agreement remains a work in progress and further legal comments including
drafting revisions will be provided in due course. Dentons – agreed. The business terms
need to be settled asap.
2. City would like to understand the relationship between PTC Ownership Realty Inc. and
OPB Realty Inc. City requires assurances as to OPB’s continued involvement in the
project (i.e. no disposition of any interests during development without the approval of
the City (not to be unreasonably withheld), no release of OPB’s covenant etc.). Further
information to be provided as to the identity of the OPB entity which will own/operate
the rental tower and who will own and maintain the OPB Parking Garage. Dentons –
PTC Ownership Inc. has not been created yet so far as we are aware. We understand that
the intention is that the obligation to construct and develop should bind the owner of the
shopping centre 58 acre parcel. There can be no controls on OPB or its assets as we have
discussed. City proposes that all roads servicing City Facilities and the Parking Garage
are conveyed to the City as public roads, with the City then dedicating the same as ‘public
highway’. Notwithstanding, we understand the road which will service the Parking
- 54 -
32990746.5
– 2 –
NATDOCS\58116755\V-1
Garage would remain a private road, therefore appropriate public easements would be
required over such private road to enable access to the Parking Garage. Dentons –
Agreed in principle.
3. Section 4.6 - Provisions should be added (or a new construction coordination agreement
should be added as a schedule) to address the construction of the Parking Garage and
covenants and obligations of the parties with and to each other, with respect to
construction generally and construction contracts. For instance, with respect to the
Parking Garage, the City will need rights for input/approval as to any change orders,
payments and other development matters under the construction contract with OPB. It
will also need benefit of warranties etc. This would also speak to mutual obligations to
pay contractors, commence and complete the construction of the various facilities, as
well as provide clarity on the cross-default provisions of the contracts (i.e. neither owner
will be required or compelled by the other to enforce cross-default under its contracts).
Dentons – agreed in principle. OPB to have the lead as constructor of the parking
garage. We can discuss particulars of inputs and approvals and applicable time frames
recognizing the shared cost of this facility.
4. Timing for execution of agreements of purchase and sale and closing of all land transfers
to be discussed. Also question of due diligence (e.g. title due diligence, existing restrictive
covenants on OPB lands which could impact use/development of the site) to be
considered. We understand OPB/Dentons is in the process of preparing a summary of
the relevant restrictive covenants which relate to the OPB lands for review by City and
mitigation of the impacts of these may need to be addressed in the Agreement. We
understand that the agreement in principle is that the City would not be subject to any
restrictions on title which would impact the proposed use and/or development of the
lands to be transferred to the City. Dentons- agreed in principle. Materially adverse
restrictions on title will be dealt with. We note that the Cineplex lease has a theatre
exclusive that contemplates permitted uses by the Performing Arts Centre that will
remain on title. An excerpt from the Cineplex lease is attached as Schedule “A”.
5. Detailed operating and maintenance cost breakdown of shared facilities and estimates of
such costs are required. Breakdown should include, for example, lighting, landscaping,
utilities and details on other items. Dentons – need to identify what are shared facilities.
6. Commercial space in SYC Centre – the agreement should address the commercial space
to be located in the SYC Centre building but retained by OPB. City would propose
registration on title to the lands of a form of restrictive covenant which would limit
certain noxious uses (e.g. nightclubs, adult entertainment etc.). Dentons – agreed in
principle.
7. Responsibility and cost associated with additional deliverables (such as, reference plans,
environmental reports etc.) to be agreed between the parties and reflected in the
Agreement. We understand the agreement in principle is that each party would bear
costs of its own engineers/advisors, however there may be some scope for reliance on
other party’s reports etc. Dentons – to be discussed. To the extent available, retainer
agreements should provide for reliance by both parties regardless of who has
commissioned the report, etc.
Formatted: Strikethrough
- 55 -
32990746.5
– 3 –
NATDOCS\58116755\V-1
8. An additional recital and/or schedule should be included clearly identifying which parts
of the site lands the Agreement relates (i.e. South Block Lands and lands on which City
Facilities and Rental Tower are being constructed). Dentons – we do not understand
this comment. City to clarify the request.
9. The draft agreement contains a number of references to events which have yet to occur,
but which must take place prior to execution of the agreement. Dentons – these issues
should be addressed and resolved by the time the Master Agreement is executed. City to
confirm target signature date – is it next spring? For instance, a number of the recitals
state definitive positions of the parties (e.g. Recital E (“parties have agreed on a master
plan”), Recital I (“City has determined that adequate sanitary, storm and water service
capacity exists”). At the present time, these statements are not correct, however we
understand the majority of these will be verified or known at the date of signing of the
Agreement. These include:
a. Recital H - The City cannot confirm that that the Master Plan conforms with the
City Centre Zoning By-law until they have reviewed the detailed plans. Variances
or other technical zoning by-law amendments may be required.
b. Recital I - The Region will need to provide confirmation that there is adequate
water and servicing capacity. Through the master plan planning process, the
Region may need to confirm adequacy of servicing for services it controls. OPB
needs to demonstrate compliance with City Centre SWM guidelines. Dentons –
City to confirm the solution to stormwater management and stormwater storage
should be addressed in the Master Agreement.
c. Section 1.1(a) – Schedule “O” – There is also a stand-alone servicing agreement
required by the Region. This should be referenced also. Dentons-we assume the
City will also be a party to the servicing agreement given the land swap. Please
confirm.
d. Section 3.1 - The South Block Lands are zoned to permit residential. City is in
process of determining what, if any, additional approvals from Council are
required (Note: South Block Lands also remain subject to the Minutes of
Settlement dated March 30, 2021). Dentons – has MTO approval been obtained?
If not, what is the plan and timing?
10. Parties to consider including the settled form of ‘Delineation of Works’ memorandum as
a new schedule to the Agreement. Dentons – Agreed.
Recitals
11. General – Further review and revisions to recitals will be necessary to reflect the agreed
facts of the development and planning process. This will occur in due course closer to
execution of the Agreement. Dentons – Agreed.
12. Recital D:
a. City will require the transferee of the South Block Lands to agree to certain
acceptable profit-sharing mechanisms on any future sale of the South Block
Formatted: Strikethrough
- 56 -
32990746.5
– 4 –
NATDOCS\58116755\V-1
Lands within a certain period following closing. This profit sharing would not
apply to the sale of residential condominium units constructed on the South
Block Lands. Please find attached as Schedule “A” to this memorandum a draft of
the proposed profit sharing (Participation) agreement for review and comment. It
remains important for the City to ensure expedient development of the South
Block Lands and avoid a long-term construction site in such close proximity to
new facilities. City and transferee of the South Block Lands to enter into a lease to
the City on closing for purposes of car parking at a nominal rent for a term
commencing on closing and ending on the commencement of residential
condominium tower construction. Dentons – agreed. City to repair, replace,
maintain, insure, etc. Carefree lease to PTC Ownership. Lease term to run until
South Block lands are ready to be developed.
b. Include in Recital D, reference to “two condominium towers, a 14.5-metre wide
public road and an 8-metre wide pedestrian walkway as identified on Figure
6.13.2(a) of Zoning by-law 7719/19”. The public road is to be conveyed to the City
as a strata parcel. Title to the 8-metre wide pedestrian walkway, is to be retained
by the City. The land areas for both the 14.5 metre wide road and the 8-metre
wide pedestrian walkway are to be excluded from the FSI calculation. The
pedestrian walkway can be accepted as parkland dedication. For greater
certainty, all lands on which public or private roads are to be constructed would
not form part of the appraised lands for purposed of the land swap (e.g. no value
should be ascribed to lands designated for road use). Dentons – we understand
that this has been modified now to provide density to Pickering Town Centre
lands and that the appraisals should consider the value of the lands swapped that
will be roads? We also understand that the City will have a strata ownership of
both the walkway and the public road
13. Recital E – Please change references throughout from “City Centre Master Plan” to “PTC
Master Plan”. This refers to the master plan for the development of PTC lands, not the
City Centre project. At the end of the section, please change the words “City Centre Plan”
to “City’s Official Plan, City Centre Zoning By-law 7753/17 and City Centre Urban
Design Guidelines.” Dentons – we thought this was called the Pickering City Centre
project and Pickering City Center Master Plan? City to clarify the purpose of this
request.
14. Recital J – Please provide further information on the reference to the “City Centre 2023
Plan”. Dentons – this was taken from a Council Report. Can be deleted if concerning.
Article 1 - Definitions
15. Change following defined terms throughout the Agreement:
a. “Arts Centre” change to “Performing Arts Centre”.
b. “Piazza” change to “Public Square”.
c. “S & YC” (and in some instances “SY&C”) change to “SYC”.
- 57 -
32990746.5
– 5 –
NATDOCS\58116755\V-1
d. “Parks and Recreation Centre” change to “Chestnut Hill Development
Recreation Complex” (this should also be added as a defined term). Dentons
– agreed.
16. Section 1.1(a) – We suggest a single form of template which would be attached as a
schedule to the Agreement for each (A) Agreement of Purchase and Sale for Performing
Arts Centre, Library, SYC and a form for the South Block Lands (including a form of
development agreement); and (B) Reciprocal Operating Agreement. Dentons – agreed.
Torys agreed to produce the draft form of purchase agreement.
17. Section 1.1(a) – Schedule “N” – Parking Management Agreement, we understand that
the City and OPB will each appoint their own parking manager to manage their portion
of the Parking Garage. Dentons – there will have to be an agreement between the
parties. Makes sense if each party is to own its respective parking facilities. There can be
no impediment to access or egress to the lower parking levels.
18. Section 1.1(a) – Schedule “Q” – There is a requirement for a registered plan of
subdivision for the 9 Blocks (other than for Block 2 (PAC) which will not be included in
the draft plan of subdivision), the public roads and the Public Square so the Lands can be
exchanged when construction is approved by the Owners (this is important to protect the
use of DC funding). Dentons – City to clarify.
19. Section 1.1(a) – Schedule “CC” – Memorandum of Understanding. Delete this schedule,
the MOU will be essentially superseded by the Agreement. Dentons – agreed.
20. Section 1.1(a) – Reference is made in Section 5.5 of the agreement to a “Shared Facilities
Management Agreement” which should be added as a new schedule. There will likely
also be the need for a shared facilities agreement and reciprocal operating agreement to
address issues such as access by both parties across each other’s respective properties for
purposes of repair and maintenance of certain infrastructure. Dentons – agreed. Torys
agreed to produce the template shared facilities agreements/ operating agreements
21. Section 1.1(j) – City Facilities - Include Public Square in the definition Dentons – City to
clarify.
22. Section 1.1(k) – City Lands - Definition should be revised by deleting the words “in
exchange for the South Block Lands to be conveyed to PTC Ownership by the City”.
Dentons – City to clarify. This is the land swap component.
23. Section 1.1(m) – City Parking Structure and Public Square – we understand development
managers for the City and OPB are working with City Development Department to
prepare a site specific zoning by-law amendment to be submitted by OPB to permit the
transfer of the FSI for the public roads to OBP’s lands. The City will not transfer the FSI
on the public square. We understand the Public Square will now be a parkland
dedication and the City Parking Structure is to be conveyed to the City as a strata parcel.
This section should be revised to reflect the outcome of those discussions. Dentons –
City Parking Structure to be conveyed (instead of leased) so long as no issues related to
Building Code/ fire separation, etc. We believe that FSI is to be transferred. No
obstruction of ingress or egress to PTC Ownership parking levels. This seems to conflict
with note 12(b)
- 58 -
32990746.5
– 6 –
NATDOCS\58116755\V-1
24. Section 1.1(bb) - Library Parcel - Given the conveyance of ‘Road B’ to the City for
purposes of a public road, consideration should be made to convey freehold title (rather
than a strata title) for the lands on which the Library will be situated. This should be
possible given there would be no part of OPB’s subsurface parking structure beneath the
Library. This proposal would be subject to agreement in principle from City
Development Department. Dentons – agreed in principle. Is this land being appraised
on the basis of a freehold transfer?
25. Section 1.1(ff) – Parking Garage Development Management Agreement – Please provide
for review once available. Dentons – we will follow up with Cushman. We also
understand a development manager agreement has yet to be prepared with respect to
service relocation [Dentons – between City and Cushman] and public realm work
[Dentons – between City and twopoint0]. For further consideration and discussion.
26. Section 1.1(ll) – Public Square – The Public Square shall have its own legal description
and will be deeded to the City as parkland dedication for Block 1 and 3-9. Dentons –
correct. + South Block Lands? [See note 29(b)(ii) below]
27. Section 1.1(ss) – Public Realm Improvements – City considering the scope and detail of
what constitutes public realm improvements (e.g. benches, light fixtures, trash
receptacles, wayfinding signage). Dentons – City to clarify. City to carry the same
finishes throughout.
28. Section 1.3 – The paramountcy language is somewhat unclear. Further discussions
between legal counsel required to ensure clarity and appropriateness of the ‘waterfall’.
Article 3 – Co-Ordination of Development and Use of the Public Facilities
29. General:
a. Agreement should also speak to development of Rental Building and
requirements of City and confirm that the Rental Building is purpose built rental.
[Dentons – agreed] OPB should also agree to a prohibition against any future
condominiumization of the Rental Building. [Dentons – we have requested OPB
to confirm] Please confirm all easements, air rights and mutual support
requirements are contemplated in the reciprocal operating agreement. Dentons –
agreed. Torys agreed to produce the template reciprocal operating agreement.
b. Parkland dedication – parkland dedication issues should be addressed in the
Agreement and are being further considered by City Development Department.
In particular:
i. Need to add a schedule identifying the legal description, boundary and
area of the Public Square lands. Graphic to be added showing the
approximate location and boundary of the Public Square.
ii. Confirmation to be included that the Public Square only satisfies parkland
dedication for Blocks 1 and 3 through 9 and the South Block Lands, and
not for the entire OPB site.
Formatted: Strikethrough
- 59 -
32990746.5
– 7 –
NATDOCS\58116755\V-1
c. We understand that development managers for City and OPB are working on a
collaborative basis with City Development Department on required zoning
amendment(s) and minor variances (if required), given that the lands will be
owned by OPB until they are transferred to the City. Appropriate revisions to be
included in the Agreement to reflect the outcome of these discussions. Dentons –
agreed.
d. Propose an additional and separate provision in the Agreement to address
requirement for public easements, which would include, if required a right-of-
way/access easements for vehicles and pedestrians will be required over any
private roads servicing City Facilities (Note: appropriate reference plans will
need to be prepared and registered on title prior to the opening of the City
Facilities). Dentons – agreed in principle.
30. Section 3.2 – Remove reference to ‘preliminary’ site plan submission, as there is no
recognized concept of ‘preliminary’ submission. Dentons – agreed. We understand City
and OPB’s development managers together with architectsAlliance are preparing site
plan applications for submission to City Development Department. All site plan
approval is delegated to the Director, City Development & CBO. The City does not issue
customary site plan conditions.
31. Section 3.3 – Same comment as above regarding ‘preliminary’ site plan
submission.Dentons - agreed
32. Section 3.4 – Parcel creation for Blocks 1 and 3-9, + Library? public roads and parkland
to be by way of plan of subdivision. Dentons – what about South Block?
33. Section 3.5 - The public roads will be identified through the Master Plan review process
and we understand will be conveyed to the City on closing. Dentons – what is the timing
re note 32 and 33?
34. Section 3.6:
a. Decision to close the Public Square should be City’s exclusively and Public Square
should be deemed a closed, private space, subject to certain exceptions (e.g.
limited rights of access/egress to and from PTC in the event of emergency).
Dentons – agreed in principle. How does this affect ingress and egress to the
shopping centre? Concern regarding emergency fire exit capacity from the
shopping centre to be reviewed.
b. OPB will require a permit from the City use the Public Square. Form of permit
and requirements to be addressed (i.e. license of occupation restricted to a few
days per year to host events for tenants, not commercial events). Dentons –
suggest that OPB follow the City’s usual permit procedures.
c. The City agrees that any permanent signage facing the Public Square be installed
so as not to interfere with or create a nuisance for the tenants occupying the
Rental Building.
Formatted: Strikethrough
- 60 -
32990746.5
– 8 –
NATDOCS\58116755\V-1
35. Section 3.7 – Obligation should be for each party to negotiate and finalize agreements (in
substantially the same form as provided in the schedules) acting reasonably and in good
faith. Timing for execution of the agreements to be discussed further. Dentons – agreed.
Article 4 – Construction of City and Shared Buildings
36. Section 4.4 – Clarification to be included to differentiate the Public Realm
Improvements and the PTC Public Realm Improvements referenced in third line of
Section 4.4. We understand the PTC Public Realm Improvements relate to the
residential component (and shown on the plan), which PTC is completing and will not be
included in the $6.3m contribution. Dentons – agreed.
37. Section 4.8 - Further clarity to be provided with respect to how the $6.3m contribution
from OPB to City is to be effected. Dentons – please see page 10 of MOU. Is a set off
from City’s construction costs of the parking garage.
Article 5 – Operation of Master Plan Facilities
38. Section 5.3 – Should there also be reference to “Rental Building Parking Structure”?
Dentons – City to clarify This may also need to be made in Section 7.1(a)(vi). We
understand each of City and OPB will be responsible for operating its respective parking
garage. Dentons – agreed if no building code issues caused by separate ownership.
39. Section 5.5 – City to approve any transferee of the South Block Lands. Further
information required from OPB as to its proposal for the transfer and development of the
South Block Lands (see comment re: Recital D above). Intentionally Deleted.
Article 6 – Owner’s Committee
40. Section 6.1 – Further discussion required on the composition and authority of the
proposed owner’s committee. City would not be in a position to delegate any binding
authority on the members and would see this more of a steering committee to address
ongoing development issues as they arise and report back. We certainly see value in
something like this for purposes of the reciprocal operating agreements and the Parking
Garage. Dentons – no issues.
Article 7 – Cost Sharing
41. General:
a. Demolition cost – Lands are to be delivered ‘as is, where is’ but language to be
added requiring OPB to deliver the Library lands with the existing theatre
demolished to grade, other than the walls and floors which are being left for the
benefit of the Library. Dentons – please see Delineation of Work. With respect to
South Block Lands, environmental investigations are required to ascertain
condition of the lands. Dentons – this is a City responsibilty. Further discussions
between the parties may be required following issuance of Phase II
environmental site assessment. Dentons – will need the ability of both parties to
rely upon the Phase II reports.
Formatted: Strikethrough
- 61 -
32990746.5
– 9 –
NATDOCS\58116755\V-1
b. Loading docks – In principle, the City would be prepared to pay 50% of initial
capital costs of loading docks and 50% of costs of maintenance and life cycle
work. Dentons – agreed.
42. Section 7.1(a)(i) and (ii) – Proportionate share of costs of the Parking Garage as between
OPB and City to be as set out in the agreed upon ‘Delineation of Works’ memorandum
and confirmed upon issuance of final design drawings.
43. Section 7.1(a)(iii) – In principle, City is prepared to pay 50% of initial capital costs for
entry ramp onto P1 parking level and 50% of costs of maintenance and life cycle work.
Dentons – agreed.
44. Section 7.1(b) – Reference to “total costs of construction” should this be just the roof of
the Parking Structure? City is concerned about a double-count. Dentons – PTC
Ownership to provide $6.3M contribution to public realm and it will be done through
adjustment to parking structure costs as contained in MOU. City to assume all
responsibility for design, construction, operation, maintenance, etc of the Public Square.
All finishes to be consistent throughout.
45. Section 7.1(c), (d) – Costs of construction, maintenance and operations of facilities are
not provided for in the DMAs. Should the reference be the respective construction
contracts and operating and maintenance agreements? With respect to those aspects of
operation and maintenance of the City Facilities that the City is required to undertake,
there should be no obligation on City to use OPB service/maintenance provider or have
any limitations on the contractors or vendors the City can retain. All City work would be
undertaken by contractors or venders selected by the City, in its sole discretion.Dentons
– as the leases provided for in the MOU have been eliminated, there is no obligation on
the City to use PTC Ownership service, maintenance providers for City Facilities. 100%
City cost = 100% City choice. Need a provision confirming collective use of
Development Managers for construction and development as per MOU.
46. Section 7.1(g) – Operating and maintenance costs and share of such costs to be further
discussed. City requires additional detail of the proposed scope of the items subject to
operating and maintenance. Form of operating agreement OPB intends to use with its
service/maintenance provider to be provided for review. Dentons – we will review upon
receipt of form of agreement from Torys.
Article 8 – City Fees and Charges and Applicable Credits
47. Section 8.1 – Include reference to, among other things, OPB Rental Building, Rental
Building Parking Structure and Public Square. Dentons – City to clarify. Public Square is
being conveyed for parkland dedication credit.
Article 9 – Land Transfers
48. General – City is in process of obtaining updated appraisals for all parcels. Appraisals
will be based on highest and best use. Dentons – please provide once obtained.
49. Section 9.2 – The form of purchase and sale agreement for strata properties would need
to contemplate initial reference plans to enable the transfer of strata title prior to
Formatted: Strikethrough
Formatted: Strikethrough
- 62 -
32990746.5
– 10 –
NATDOCS\58116755\V-1
construction commencement, with a mechanism for the parties to work together
following completion to revise (e.g. transfer if additional title required and/or quit claim
where required) the parties ownership interests. Dentons – agreed. Torys to produce
form of agreement of purchase and sale.
50. Section 9.3 – Further information to be provided by OPB with respect to proposed
transferee of South Block Lands. Intentionally Deleted
Article 10 – Representations and Warranties
51. General – Further consideration is ongoing with respect to appropriate representations
and warranties required from OPB. Dentons – will review when received.
52. Section 10.3 – Please delete. City will act in accordance with its obligations under
Municipal Act and otherwise, no preferential or ‘ambassador level’ service is permitted.
Dentons – agreed.
Article 13 – Remedies
53. Section 13.1 – Is this necessary given the nature of the Agreement? Suggest obligations
would simply be to act reasonably and in good faith. We are unsure of the relevance of
bonding in the notes provided. Further discussion may be necessary. Dentons – we can
discuss further. Not a large issue.
Article 14 – Confidentiality
54. Section 14.1 – Further discussion required with respect to MFIPPA application. There is
limited ability of City to keep certain agreements confidential, given the City’s freedom of
information obligations. Dentons – no issue. Clause is intended to trigger certain
MFIPPA protections. City to advise.
Article 15 – General
55. Section 15.4 – There should be no ability for OPB to assign or transfer its ownership of
the Agreement or the development without the consent of the City, not to be
unreasonably withheld. In the event of consent being provided, there would be no release
of OPB from its covenants under the various agreements. This is a transaction where
OPB is essential and needs to be involved until the completion of all development
contemplated. Intentionally Deleted. Legal counsel can discuss an appropriate
mechanism to ensure that the owner of the shopping centre 58 acres is bound by the
obligations to construct and develop as we believe that the intention is that the owner of
the shopping centre be committed to this project. Please see our comment in note 2
above.
Formatted: Strikethrough
Formatted: Strikethrough
Formatted: Strikethrough
- 63 -
32990746.5
– 11 –
NATDOCS\58116755\V-1
Schedule “A”
Draft Participation Agreement Cineplex Lease Restriction
[To be attached]
8.2 Restrictive Covenants
(a) So long as the Tenant is conducting business in the Leased Premises in accordance
with the provisions of Section 8.1(a), then:
(i) During the Term, provided the Tenant is not in material default of any of its
obligations under this Lease beyond any cure period applicable to such default, the
Landlord, except as hereinafter provided, shall not occupy or use or permit any
premises or space in the Shopping Centre other than by the Tenant (or a related entity),
for the purpose of the operation of a motion picture theatre or for the exhibition of
motion pictures, opera, concerts, event cinema and/or stage plays/live theatre.
Notwithstanding the restriction in the preceding sentence of this subsection 8.2(a)(i), the
Landlord may use, lease, license or otherwise use or permit to be used premises or
space within the Shopping Centre, in the approximate location outlined in heavy BLACK
on Schedule “B” attached hereto, for the purpose of a performing arts centre (herein the
“Performing Arts Centre”), which facility may be used (in addition to any other use or
uses not expressly prohibited under the preceding sentence of this subsection 8.2(a)(i))
to present live opera, live concerts, live stage plays and live theatre to an audience
within the Performing Arts Centre and/or transmitted to an audience outside the
Shopping Centre, provided that:
(A) the Performing Arts Centre shall not present:
(i) to any audience therein any onscreen opera, concerts, stage plays/theatre (whether
pre-recorded; on DVD, Blu-Ray or any technological evolution thereof; televised,
broadcast, cablecast, simulcast, narrowcast, delivered via satellite, internet or
otherwise) except a recording of live opera, concert and/or stage plays/theatre which
was originally performed at the Performing Arts Centre; and
(ii) the public, ticketed performance of onscreen educational or instructional content;
and
(B) the Performing Arts Centre may present motion pictures provided such motion
pictures:
(i) are accompanied by a live orchestra performing within the Performing Arts Centre
facility; or
(ii) form part of a live opera, live concert, or live stage play/theatre performance
performed at the Performing Arts Centre and were custom created for the particular live
presentation being performed and were never released theatrically in motion picture
theatres in North America.
Except as specified in this subsection 8.2(a)(i), the restrictions contained above in the
first sentence of this subsection 8.2(a)(i) shall be binding upon the Performing Arts
Centre, and the restrictive covenant set out in this subsection 8.2(a)(i) shall hereinafter
be referred to as the “Theatre Exclusive”.
Formatted: Strikethrough
Formatted: Strikethrough
Formatted: Normal, Left, Indent: Left: 0", Don't adjust
space between Latin and Asian text, Don't adjust space
between Asian text and numbers
Formatted: (none)
- 64 -