CITY CLERK

Clause embodied in Report No. 4 of the Administration Committee, as adopted by the Council of the City of at its meeting held on April 16, 17 and 18, 2002.

3

Review of TTC Properties - Optimize Revenue from Development Potential (Various Wards)

(City Council on April 16, 17 and 18, 2002, amended this Clause by adding to Recommendation No. (2) embodied in the joint report dated March 12, 2002, from the Commissioner of Corporate Services and the Chief General Manager, Toronto Transit Commission, as embodied in the Clause, the words “and on an appropriate public consultation process at the draft Request for Proposals stage”, so that such recommendation shall now read as follows:

“(2) staff be directed to report back to the Administration Committee and the TTC on formal work plans, schedules, workforce estimates, staffing plans and budget and funding options as soon as possible, and on an appropriate public consultation process at the draft Request for Proposals stage; and”.)

The Administration Committee recommends the adoption of the joint report (March 12, 2002) from the Commissioner of Corporate Services and the Chief General Manager, Toronto Transit Commission.

The Administration Committee reports, for the information of Council, having requested the City Solicitor to submit a report to the Administration Committee on what role, if any, the former City of Toronto Council may have played in the lease agreement and other related matters with respect to the Danforth garage.

The Administration Committee submits the following joint report (March 12, 2002) from the Commissioner of Corporate Services and the Chief General Manager, Toronto Transit Commission (TTC):

Purpose:

To provide information on the review being undertaken with regard to optimizing revenue from development potential of properties owned and/or operated by the TTC.

Financial Implications and Impact Statement:

N/A Toronto City Council 2 Administration Committee April 16, 17 and 18, 2002 Report No. 4, Clause No. 3

Recommendations:

It is recommended that:

(1) the prioritization of the Schedule A and Schedule B properties outlined in this report be endorsed;

(2) staff be directed to report back to the Administration Committee and the TTC on formal work plans, schedules, workforce estimates, staffing plans and budget and funding options as soon as possible; and

(3) the appropriate City and TTC staff be authorized and directed to give effect to the foregoing.

Background:

Over the past several years, the Commission has passed several motions with respect to the development of property in the vicinity of subway stations, particularly related to re-development over top of TTC operating facilities.

The TTC Committee of the Whole at its meeting of September 5, 2000, approved Commissioner Mihevc’s motion that staff be directed to come forward with a strategic plan on the marketing of TTC and City-owned properties by subways, as soon as possible.

The TTC Committee of the Whole at its meeting of December 13, 2000, approved Commissioner Mihevc’s motion that R. Ducharme, Chief General Manager be requested to meet with Vice-Chair Silva, Commissioners Moscoe, Disero and Mihevc to develop terms of reference for a joint TTC/City of Toronto Task Force to deal with the issue of development over subway stations.

The TTC Committee of the Whole at its meeting of January 25, 2001, approved Commissioner Mihevc’s Motion that Chair Ashton, Commissioner Mihevc and R. Ducharme be requested to meet with the Chief Administrative Officer and Commissioner of Corporate Services for the City of Toronto to discuss development over subway stations.

In mid-2001, TTC staff met with City officials to discuss the strategy to be taken with regards to development over subway stations. A working group comprised of staff from Facilities and Real Estate Services, Legal Services, Planning, Finance and TTC was established to review the properties used for transit purposes and to identify and prioritize those properties that have the highest development potential and marketability. The work group chaired by the Commissioner of Corporate Services meets on a monthly basis to review progress on the prioritization and redevelopment status of the properties.

This report responds to the above requests and summarizes progress to date. Toronto City Council 3 Administration Committee April 16, 17 and 18, 2002 Report No. 4, Clause No. 3

Comments:

This report is the first in a series of reports on progress to date and represents a significant step in initiating redevelopment of valuable City and TTC properties which have the ability to generate revenue to the TTC and/or the City of Toronto and to encourage ridership on the TTC. The focus of this report is on large properties mostly in close proximity to subway stations which have significant redevelopment potential.

It should be noted that in 1997 TTC declared certain properties to be surplus to its operational needs (See Appendix A). With the exception of Lansdowne Garage, none of the properties declared surplus in 1997 are the subject of this report. The 1997 surplus properties (with the exception of Lansdowne Garage) are small in size and have limited redevelopment potential. Due to the above and the fact that these properties are currently proceeding satisfactorily through the disposal process, no details on these properties are included in this report other than Lansdowne Garage.

Goals and Objectives of the Work Group:

The goals and objectives of the work group were to evaluate and prioritize those subway-related properties owned by either the City of Toronto or the TTC that could be developed to their highest and best use. The approach was to examine properties that may or may not be surplus to TTC needs but that could be re-developed to incorporate ongoing TTC operational needs in conjunction with integrated high-density development. The specific goals and objectives of the work group were as follows:

(i) to identify a list of approximately 10 properties with high potential for redevelopment;

(ii) to gather property information, ownership history, environmental status and current and future TTC operational requirements respecting each site;

(iii) to identify the most probable sites that could be re-developed and/or sold in the short to medium term;

(iv) to prioritize specific properties for high priority attention by TTC and City staff; and

(v) to make recommendations to the TTC and City of Toronto on the proposed manner of disposal/development of each property.

Evaluation of Potential Properties:

Following the development of background information on each property, TTC and City staff utilized the following criteria to rank each site with respect to redevelopment potential.

Planning Issues:

Zoning, official plan policies, demand for development, potential mix of land uses, obstacles to development, potential timing of development. Toronto City Council 4 Administration Committee April 16, 17 and 18, 2002 Report No. 4, Clause No. 3

TTC Operational Issues: Revenue generation, ridership, transit growth, TTC obstacles to development, market need, development potential, timing of development given TTC operational needs.

Real Estate Issues: Ownership issues, title restrictions, encumbrances, legal restrictions/obligations, history of site, marketability, value of land, timing of development.

Description and Rationale for Schedule “A” Properties: In evaluating the various properties, a considerable emphasis was placed on the probability properties could be redeveloped in the short to medium term (i.e. within 5 years). A high, medium, or low ranking was then given to each property. The ranking for each property should not be misinterpreted as being an evaluation of the absolute development potential of a site. Specifically, properties ranked low in probability in the short to medium term may have significant development potential but planning, policy, operational or financial obstacles will likely prevent their redevelopment in the immediate future. Due to limited staff resources within the City and the TTC to manage the redevelopment of these properties, it is necessary to focus initial staff efforts on those properties having the fewest obstacles to redevelopment.

Schedule “A” Properties: Based on the above evaluation criteria, 10 properties as set out in Appendix B were identified as having the highest probability for redevelopment. The following section outlines the rationale for the selection of these properties, the next steps in the process and how to proceed to market the highest priority projects.

The 10 properties with the highest probability for successful redevelopment are referred to as the Schedule A properties. Details concerning planning, on-going TTC uses and development potential for each Schedule A property, as well as the rationale for the evaluation of each property is outlined in Appendix C. Maps of each of the sites are attached as Appendices D1 to D10, inclusive.

The rationale for the selection and ranking of the ten highest priority projects is outlined below:

High Probability for Success: (1) York Mills Commuter Parking Lot: With the exception of the current commuter parking lot operation (260 spaces), this 3.2 acre site is relatively unencumbered and is located in the prestigious York Mills Corporate Centre. The site has excellent highway, arterial road and transit access, other high quality developments have recently been located in the area and the Yonge Street frontage is in high demand. Planning policies are in place for the centre although re-zoning may be required. Obstacles to development include replacement of the TTC commuter parking spaces and impact of TRCA conservation requirements, as the lands are adjacent to ravine lands. Toronto City Council 5 Administration Committee April 16, 17 and 18, 2002 Report No. 4, Clause No. 3

(2) Eglinton/Yonge Bus Terminal:

Located in the Yonge-Eglinton Centre, this 2.1 acre property is a prime site for redevelopment. Recent developer interest in the area is high (6 projects are in the pipeline including the Minto project) and the centre remains an attractive and prestigious investment area. With the construction of a temporary bus terminal in the TTC bus garage site (expected to open in Fall, 2003), a major obstacle to short term redevelopment of the site has been removed. A Request for Expression of Interest (REOI) has already been completed and a Request for Proposals (RFP) will be released to the development industry in Spring 2002.

(3) Lansdowne Garage:

Although not located directly adjacent to a TTC station, this 4.0 acre site has excellent residential and light industrial development potential. The site is not constrained by existing TTC operations and other residential projects have recently been constructed in the area of the garage. While the clean up of hydrocarbon contamination will take place this summer, the recent discovery in two locations of high concentrations of trichlorethylene (a cleaning solvent) may delay the sale of this property. Additional boreholes and chemical testing is currently underway to determine the extent of the trichlorethylene contamination and the results are expected in mid-April. At that time, a decision will be made with respect to a clean up strategy and whether the property remains a high probability for successful re-development in the short term.

(4) Sheppard/Yonge Bus Terminal:

This partially vacant site is located in the City Centre at the intersection of two subway lines (Yonge and Sheppard). With the recent completion of the Sheppard Subway construction, the marketability of the site is enhanced and zoning for office uses (4.5 times coverage) is already in place. The current configuration of the bus terminal and electrical substation is a significant constraint to development as is the existing office/retail zoning. These constraints contributed to only one developer responding to a recent REOI and the submission was technically non-compliant. TTC staff has identified a revised bus station concept that will significantly enhance development potential and a feasibility study of the new layout is in progress. Upon confirmation of the feasibility of the new bus terminal concept a new REOI/RFP process would be initiated.

Medium Probability for Success:

(5) (Vacant Lands): This small 0.6 acre site located north of the Spadina Station bus terminal is currently vacant. While the site is an attractive one due to the proximity of the station, it is constrained by a below grade subway structure which connects the Bloor/Danforth and Spadina Subway lines. As a result, the probability of successful development in the near future is medium and any development of the site is likely to be of a lower density (e.g. townhouses). A high priority for the site is not considered appropriate until the structural loading permissible on the subway structure has been determined. TTC Toronto City Council 6 Administration Committee April 16, 17 and 18, 2002 Report No. 4, Clause No. 3

Engineering staff is currently working on the loading assessment and if development is deemed to be structurally feasible, this property would move into the high probability category.

(6) Danforth Garage: Prior to outlining the redevelopment potential of the Danforth Garage property, it is appropriate to highlight the past history of the site:

In 1914 and 1915, the former City of Toronto acquired 2 parcels of land on the south side of between Coxwell and Hillingdon Avenues, now known municipally as 1577, 1627 and 1675 Danforth Avenue, and registered the deeds in the name of Toronto Transportation Commission, now Toronto Transit Commission (TTC). 1577 Danforth Avenue is subject to a long-term land lease, 1627 Danforth Avenue is the Danforth Garage and 1675 Danforth Avenue is leased to the Toronto Public Library Board (TPL) for the Danforth-Coxwell Branch library.

In 1990, TTC entered into a long-term land lease with Martap Developments 87 Limited for 1577 Danforth Avenue, located at the northwest corner of Danforth and Coxwell Avenues. Martap constructed a five-storey rental apartment building in conjunction with the Provincial Social Housing Program, wherein 70 percent of the units were to be subsidized rentals rates and 30 percent were to be at market. A clause in the lease provides Martap a Right of First Opportunity to negotiate with the TTC for the purchase of 1627 Danforth Avenue, should the property be surplus to TTC requirements.

TTC staff advises that the completion of the new Comstock Garage will result in the decommissioning of the Danforth Garage for bus operations in Spring 2002. In anticipation that the Danforth property would then become surplus to TTC operating requirements at that time, TTC staff requested that the property be circulated through the Property Management Committee process to determine if there is any other City interest in the site.

The 4-acre site with Danforth Avenue frontage is located adjacent to . While an attractive site for residential development, the site is constrained in the short to medium term by a number of factors that have resulted in a medium probability for success including the following specific constraints: (a) on and off site contamination issues must be resolved and are expected to take 12-18 months to address. Funds are included in the TTC’s capital budget for the clean up of contamination; (b) the bus garage is not currently surplus to TTC needs and must be declared surplus in accordance with the TTC Disposal By-Law; (c) even when the bus garage is closed in Spring 2002, several TTC operational functions will remain on site including subway operators and station collectors and the resulting parking requirements. These operational requirements must be resolved prior to declaring surplus; and Toronto City Council 7 Administration Committee April 16, 17 and 18, 2002 Report No. 4, Clause No. 3

(d) Martap, pursuant to its lease, must be requested to advise whether or not it intends to exercise it Right of First Opportunity to purchase 1627 Danforth Avenue. This could lead to a period of negotiations and if negotiations were not successful, the property could then be sold on the open market.

When the above issues are resolved, Danforth Garage would likely become a high probability for redevelopment.

(7) – North Commuter Parking Lot:

This 10.9 acre site currently contains 1,341 commuter parking spaces and, apart from this operational use, is an attractive site for redevelopment. Obstacles to development in the short to medium term include the replacement of the TTC commuter parking spaces and lack of a planning framework study which would enable the City to maximize on the development potential. Until the necessary planning framework study is completed, it would not be prudent to attempt to redevelop this site and hence the assignment of medium probability for success in the immediate future.

(8) Victoria Park Bus Terminal and Commuter Parking:

This 6 acre site is similar to the Warden commuter parking lot in that a planning framework for transit compatible densities does not exist and, as a result, redevelopment in the near future is not practical. Obstacles to development include replacement of the TTC commuter parking spaces and bus operations issues must be resolved and are largely dependent on the densities that are possible. Until the necessary framework planning study is completed, a re-assessment of the economic feasibility of replacing the commuter parking would be undertaken, and the probability for success adjusted, accordingly.

Low Probability for Success:

(9) Islington Bus Terminal/Commuter Parking:

This 5 acre site has been the subject of previous development proposals due to its prime location and existing zoning. A secondary plan for the Kipling/Islington area is currently underway and will include site specific development guidelines. Despite past and present planning activities the site is constrained by the following:

(a) re-development of the bus terminal is significantly constrained by the current intensive bus operations;

(b) re-location of the Transit buses to is needed to facilitate development of the Islington site;

(c) the relocation of Mississauga Transit to Kipling Station and development of the Islington commuter parking spaces requires that approximately 800 commuter parking spaces be replaced; Toronto City Council 8 Administration Committee April 16, 17 and 18, 2002 Report No. 4, Clause No. 3

(d) a City position on the use and redevelopment of the Westwood Theatre site is needed as one of the options for replacing the lost commuter parking is to construct parking spaces on 4 acres at the west end of the Theatre site;

(e) the potential use of the Hydro corridor for the relocation of TTC facilities and as an integral component of a proposed development needs to be resolved and was a significant factor in the development agreement in 1989 failing to proceed; and

(f) the completion of the West District Study and Master Accommodation Plan for City office space requirements is required.

As a result, this site, while having huge development potential in the long run, is a low probability for success in the near future pending the resolution of planning, policy and operational issues as well as the replacement cost of TTC and Mississauga Transit operational facilities. TTC and City staff are working on these issues as part of the West District Study and Master Accommodation Plan for City office space requirements.

(10) Station Lands:

The City owns a 68-acre parcel of land at the southeast corner of West and William . The TTC Downsview Station lands comprise of 12 acres of this site. The TTC facilities at this station (including a 650 space interim parking lot to be constructed in Summer 2002) are a constraint to development in the near future. Due to the age of the transit facilities, the need for rezoning of the entire 68-acre City parcel, the restrictive covenants on the land due to adjacent airport operations and other constraints, development over top of the TTC facilities is considered a low probability in the near term.

The proposed commuter parking lot has been situated further back from Sheppard Avenue West to preserve the Sheppard Avenue frontage for high-density development. Development of the remaining 56 acres of green field site, particularly the southern portion of the site, will likely occur prior to redevelopment over the TTC facilities. An Urban Design and Development Framework Study has been completed for the entire 68 acre parcel. City Real Estate are negotiating to remove the restrictive covenants on the entire site and TTC and City staff are working to ensure the interim commuter parking lot is consistent with long term parks, road and development policies.

Schedule “B” Properties:

In addition to prioritization of the above ten properties as having the highest probability for success, TTC and City staff have examined the remaining properties surrounding subway stations to identify the next wave of properties to be highlighted for redevelopment. The objective was to achieve the following: (i) to identify the next phase of probable sites for review; (ii) to gather background information respecting each site; Toronto City Council 9 Administration Committee April 16, 17 and 18, 2002 Report No. 4, Clause No. 3

(iii) to undertake an analysis and review of the probability for successful re-development or sale of property; and

(iv) to prioritize the properties and make recommendations for next steps to further the development process.

The Schedule “B” properties identified as the next phase for priority attention are as follows and are also listed on Appendix E:

(1) (1900 Yonge Street); (2) Bus Terminal (5714 Yonge Street); (3) (680 Greenwood Avenue); (4) Station (35 Quebec Avenue); (5) Lawrence Station (3101 Yonge Street); (6) (1209 Leslie Street); (7) Rosedale Station (7 Crescent Road); (8) (570 Wilson Avenue);

The review of the Schedule B properties has commenced and recommendations on how to proceed with those properties as having a high probability for development will be the subject of a further report. Two of the above Schedule B properties have recently become active and efforts to advance the Davisville Yard and Rosedale Station properties to development are currently underway.

In the case of Davisville Yard, TTC previously took steps to terminate a pre-existing ground lease with a developer. However, outstanding litigation with respect to the notices of default has never been resolved. Recently, the TTC Litigation Sub Committee and the TTC Committee of the Whole approved a process for the removal of the lease from title documents either by negotiation or litigation. Once the lease termination is concluded, an RFP for the Davisville Yard could be issued to new prospective developers.

Rosedale Station has a ground lease in place for the construction of an office building over top of the Rosedale Bus Terminal. The OMB rejected a proposed office development in the late 1980’s and, consequently, the development did not proceed. Recently, the lessee submitted a revised proposal involving a residential building which TTC staff is currently reviewing from an operational perspective.

Schedules “A” and “B” Properties – Preliminary Resource Requirements:

While a detailed work plan for the development of the Schedule A and B properties has not yet been developed, it is clear that neither the TTC nor City staff have sufficient legal, property and real estate staff resources to effectively manage the redevelopment process of these properties in a timely manner. As well, on a site specific basis, specialist legal and planning resources will be required to negotiate sales/leases, issue RFPs and resolve outstanding legal matters. Toronto City Council 10 Administration Committee April 16, 17 and 18, 2002 Report No. 4, Clause No. 3

TTC and City staff are currently identifying the necessary resource requirements including person hour estimates, the duration of the staffing effort, permanent vs. contract staff, funding options and budget implications. Specific recommendations on the above would be submitted to City Council and the Commission as part of the approval of the Schedule A and B properties work plan.

If the prioritization of the Schedule “A” and “B” properties identified in this report are approved, City and TTC staff would formalize a working relationship on these properties including development of the following management controls:

(i) detailed work plans and schedules would be approved for each property,

(ii) resource requirements for staffing, consultants, outside counsel and environmental specialists would be documented and justified;

(iii) Property Development checklists of the process to sell/lease each property would be developed for monitoring of progress;

(iv) regular reporting of project status would be initiated, and

(v) a service level agreement between TTC and City staff would be developed to define roles and responsibilities, management of the work, and cost sharing and procurement practices.

The disposal/redevelopment of the Schedule A and B properties would follow the TTC and City Disposal By-Laws and the Property Management Committee process.

Conclusion:

Various TTC and City owned properties adjacent to TTC Subway Stations have tremendous redevelopment potential and not only could contribute to the achievement of the City’s growth and financial objectives but could also result in ridership growth for the TTC. However, many of these properties, despite their potential, are difficult to develop and require a concentrated staff effort over a period of time to ensure that redevelopment occurs consistent with City and TTC goals and objectives. While significant progress has been made to prioritize the projects to a short list, further staff resources (City and TTC) are required to produce concrete results.

Contact:

Name: Doug Stewart Charles Wheeler Position: Director of Real Estate Manager – Property Development Telephone: (416) 392-7202 (416) 393-6536 Fax: (416) 392-1880 (416) 338-0211 E-mail: [email protected] [email protected] Report No.: ac02-41

______Toronto City Council 11 Administration Committee April 16, 17 and 18, 2002 Report No. 4, Clause No. 3

Appendix A TTC Properties Declared Surplus in 1997*

Remaining Municipal Current Site/Location Address Size (ac.) Interest Status TTC to confirm disposal of Beresford 586 Annette Street 0.20 None equipment. Substation SW corner Eglinton Ave. W. City to arrange conveyance Gilbert Loop and Gilbert Avenue 0.40 Park use from TTC

City to prepare listing. Lansdowne Garage 640 Lansdowne Avenue 3.99 None TTC to resolve contamination issues. City to prepare listing. Otter Loop 1400 Avenue Road 0.09 None Listed for sale to the public. Royce Loop 1375 Dupont Street 0.30 None TTC to confirm disposal of St. John's Loop / 1500 0.65 None equipment. Weston Substation TTC to review existing Wade Yard 546 Lansdowne Avenue 0.57 None agreements Conveyed to City in November, Wychwood Yard / 76 Wychwood Avenue 4.38 Park use, 3 residential lots 1998. Implementation report to St. Clair Carhouse and road widening. Council in November.

*With the exception of Lansdowne Garage, these properties are not covered by this report. ______

Appendix B TTC/City Properties with Re-Development Potential Schedule A Properties Highest Probability for Success:

Nearest TTC Station Location Current TTC Use 1 York Mills -NW corner of Yonge and -TTC Commuter Parking Lot York Mills 2 Eglinton -South of Eglinton, west of -TTC bus terminal, entrance Yonge 3 Lansdowne -West side of Lansdowne, -Lansdowne bus garage (vacant) north of Bloor 4 Sheppard/Yonge -NW corner of Sheppard -TTC bus terminal, electrical and Yonge substation, vent shafts, entrance Toronto City Council 12 Administration Committee April 16, 17 and 18, 2002 Report No. 4, Clause No. 3

Medium Probability for Success:

Nearest TTC Station Location Current TTC Use 5 Spadina -North of Spadina bus -No current surface TTC use, below terminal grade subway structure 6 Coxwell -South of Bloor, east of -Danforth bus garage, office for Coxwell subway operators and station collectors 7 Warden -NE corner of Warden -TTC commuter parking lot and St. Clair 8 Victoria Park -NE corner of Victoria -TTC commuter parking lot Park and Denton

Low Probability for Success:

Nearest TTC Station Location Current TTC Use 9 Islington -NW corner of Islington -TTC bus terminal, passenger pick and Bloor up and drop off, entrance, commuter parking 10 Downsview -SE corner of Allan and -TTC bus terminal, passenger pick Sheppard up and drop off, entrance, future commuter parking lot ______

Appendix E Schedule “B” Properties TTC Utilized Properties

No. Station Name Municipal Address Ward Subway Facility Line

Schedule “B” Properties (1) Davisville 1900 Yonge St. 22 YUS Yard / Subway (2) Finch 5714 Yonge St. 23 YUS Subway/Bus Terminal Commuter Parking/ Kiss ‘n Ride (3) Greenwood 680 Greenwood Ave. 30 BD Subway 3(a) Greenwood 30 Yard Yard (4) High Park 35 Quebec Ave. 13 BD Subway (5) Lawrence 3101 Yonge St. 16 YUS Subway/ Bus terminal (6) Leslie 1209 Sheppard S Subway Ave. E. (7) Rosedale 7 Crescent Rd. 27 YUS Subway/Bus Terminal (8) Wilson 570 Wilson Ave. 10 YUS Subway/Bus Terminal Commuter Parking/ Kiss n’ Ride Toronto City Council 13 Administration Committee April 16, 17 and 18, 2002 Report No. 4, Clause No. 3

(Copies of Appendix C “Rationale for Selection of Schedule A Properties”, and Appendix D1 to D10 entitled, “Rationale for Selection of Schedule ‘A’ properties” and “Maps of Schedule ‘A’ properties”, attached to the foregoing report were forwarded to all Members of Council with the March 26, 2002, agenda of the Administration Committee and copies thereof are also on file in the office of the City Clerk, City Hall).