Finance, Audit & Risk Management Committee – November 26, 2015 Annual Corporate Plan & Revenue Analysis

Sandra Tran

Background

In accordance with the Waterfront Revitalization Act, 2002 (TWRC Act), the Board of Directors is required to develop an annual business plan at least 90 days before the start of the fiscal year.

The 2016/17 Annual Corporate Plan has been developed through an integrated process with input from all departments, including senior management, and is based on the 2015/16 Long Term Plan (LTP) including detailed revenue forecasts. These revenues were projected based on agreements, property appraisals and market rates for land values, and internal estimates.

The contents of the Annual Corporate Plan have been reviewed with the three orders of government and upon approval by the Board, the Plan will be posted on the Corporation’s website.

Summary

The 2016/17 Annual Corporate Plan consists of major deliverables, budget, business development initiatives and the required risk mitigation strategies and tools to allow the Corporation to successfully deliver its annual objectives. The Board approved the Strategic Business Plan 2014 – 2023 (Waterfront Toronto 2.0) which is referenced in the Annual Corporate Plan. The Annual Corporate Plan reflects the completion of existing projects and the early stages of planning and implementation for WT 2.0.

The 2016/17 capital investment is $51.0M including $12.4M for corporate costs. The Corporation’s total capital investment budget including non-Waterfront Toronto directed programs is $61.4. The capital investment budget for 2016/17 is funded 13% by government contributions with the balance being funded from Waterfront Toronto generated revenue.

The total capital budget of Waterfront Toronto amounts to $1.989B, $410.2M of which is being funded from Waterfront Toronto generated revenues. Relative to last year’s LTP, the total projected revenues are higher by $90.3M mainly due to:

 Additional $80.6M proceeds from additional blocks in the precinct and proceeds from the last phase of Urban Capital transaction; and  Increase in parkland contribution from private landowners in , $10.5M.

Key Deliverables for 2016/17 include:

 Complete construction of the Stormwater Management Facility core and shell;  Commence planning and design for the permanent revitalization of East - these improvements could include streetscaping and/or replacement of underground services between Bay and Parliament Streets; and  Complete the Flood Protection Due Diligence report and secure tri-government commitment for project.

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In addition, the Corporation will set up a Capital/Revenue reserve, capped at $25M, to guard against short-term revenue shortfalls and unforeseen budget increases. If the reserve is unused by 2022, the monies will be allocated to East Bayfront boardwalks construction.

Proposed Motion

ON MOTION duly made, seconded and carried, it was RESOLVED that the FARM Committee approves the 2016/17 Annual Corporate Plan and associated revenue forecasts for recommendation to the Board of Directors.

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2016/17 Annual Corporate Plan

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Introduction In accordance with the Revitalization Corporation Act, 2002 (TWRC Act), the Corporation is required to adopt an annual business plan. The three orders of government pledged $1.5 billion ($500 million each) as seed capital to catalyze waterfront revitalization (Waterfront 1.0).

The revitalization of Toronto’s waterfront is an opportunity to transform Toronto and to ensure that it remains among the best places in the world to live, work, invest and visit. Many cities around the world have used waterfront revitalization to enhance their economic competitiveness and create an improved quality of life. Time and time again, it has been demonstrated that countries that make a focused investment in their urban waterfronts have delivered strong economic, social and cultural benefits.

The Corporation, now more than halfway through its initial mandate, continues to deliver economic and social benefits to enable Toronto to compete with other leading global cities for investments, jobs and people. In 2014, Waterfront Toronto’s Board approved its Strategic Business Plan 2014 – 2023 (Waterfront Toronto 2.0) which focused on realizing a full vision of the waterfront revitalization with four key priorities: flood protection and enabling infrastructure; transit; land servicing; and public realm. The 2016/17 year represents a period of transition for Waterfront Toronto. The Corporation will manage the completion of existing projects while transitioning to the planning and design of new initiatives in support of Waterfront Toronto 2.0. The 2016/17 Annual Corporate Plan reflects the completion of existing projects and the early stages of the planning and implementation of Waterfront Toronto 2.0.

The Annual Corporate Plan ensures the Corporation aligns its resources to: meet obligations under its legislation; achieve project and corporate priorities; and mitigate and/or manage risks associated with delivery and implementation.

The key elements of the Corporation’s 2016/17 Annual Corporate Plan include:

. Key Deliverables . Budget . Funding . Business Development & Revenue Initiatives . Governance . Risk Management . Appendices

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Key Deliverables Revitalization of 2000 acres of Toronto’s waterfront requires ongoing coordination, planning and oversight across a complex, multidisciplinary and multi-stakeholder environment. In 2016/17, Waterfront Toronto will continue to undertake this key role and critical work in addition to the design, development and construction of significant projects within four precincts: East Bayfront, West Don Lands, Central Waterfront and Port Lands. Strategies to support the achievement of key deliverables include execution of funding agreements and securing other revenues, timely contract commitments, and implementation of program and risk management practices. As always, deliverables are undertaken to ensure broad public engagement and transparency of processes.

In 2016/17, the final phase of East Bayfront revitalization will commence with the selection of a development partner for Quayside. WT acquired several properties in the north east corner of East Bayfront (bordered by Small Street and Bonnycastle Street) to assemble the 4.5 acre block known as Quayside. With development in Bayside well underway, Waterfront Toronto initiated the request for qualifications for Quayside in 2015/16 and will select a preferred proponent in 2016/17. The objectives of Waterfront Toronto’s development approach, which are integrated into Waterfront Toronto’s deal structures, include: attract private-sector investment in the waterfront; raise revenues for reinvestment in waterfront revitalization; ensure delivery of Waterfront Toronto’s Precinct Plans and Minimum Green Building Requirements; promote delivery of community services and amenities that will achieve Precinct Plan objectives; and advance government policy objectives for sustainable city building, design excellence and delivery of complete and diverse communities.

Coinciding with the pace of development in East Bayfront, Waterfront Toronto will commence planning and design for the permanent revitalization of Queens Quay East. Interim improvements for Queens Quay East are already in place; however, Waterfront Toronto completed the permanent revitalization of Queens Quay West within the Central Waterfront precinct in the summer of 2015/16 and looks to complete the permanent revitalization of Queens Quay East. In 2016/17, the Corporation will begin planning and design work to phase the public realm improvements on Queens Quay East. These improvements could include streetscaping and / or replacement of underground services between Bay and Parliament Streets.

The following is a list of key precinct and corporate deliverables for the 2016/17 fiscal year.

East Bayfront Key deliverables for East Bayfront: . Complete construction of Storm Water Management Facility core and shell, located at the intersection of Cherry and Lake Shore Boulevard East; . Complete construction of dockwall reinforcing between Aitken Place Park and Parliament Slip; . Commence planning and design for revitalizing Queens Quay East between Yonge and Small streets; . Select Preferred Proponent for Quayside development;

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. Completion of the Pre-Development agreement for the Waterfront Innovation Centre and present recommendations to Toronto City Council;

West Don Lands Key deliverables for West Don Lands:

. Complete construction of Phase 1 Storm Water Management Facility core and shell (as discussed under East Bayfront; capital investment for the facility is allocated to East Bayfront and West Don Lands precincts); . Close on sale of lands for River City Phase 4;

Central Waterfront Key deliverables for Central Waterfront: . Complete detailed plans and drawings for the first phase of improvements to the Jack Layton Ferry Terminal and Harbour Square Park (located next to the ferry docks);

Port Lands Key deliverables for Port Lands: . Complete Port Lands Flood Protection Due Diligence; . Secure tri-government funding commitment for Port Lands flood protection;

Waterfront-wide Initiatives Key deliverables for Waterfront-wide Initiatives: . Complete the Gardiner Environmental Assessment; . Complete update of the Lake Park Master Plan;

Corporate Key Corporate deliverables include: . Secure tri-government commitment to 2.0 program; . Continued development of Waterfront Toronto’s social media platforms and capacity to allow public to engage more directly with revitalization initiatives; increase Facebook fans to 40,000 and Twitter followers to 30,000; . Develop a programming strategy to animate waterfront public realm; . Develop brand strategy to support the economic development objectives for the innovation corridor in East Bayfront; . Implement new sustainability framework which sets out objectives and performance areas of resilient infrastructure, innovation and new Minimum Green Building Requirements; . Develop a transition plan to manage the organization from Waterfront 1.0 and 2.0.

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Budget The 2016/17 estimated capital investment plan of $61.4M is presented below by precinct. Capital investments for the 2016/17 fiscal year and out-years are based on the 2015/16 Long Term Plan (LTP). The LTP forecasts total project expenditures until the end of Waterfront Toronto’s mandated term under its existing program.

Figure 1 - Waterfront Toronto 2016/17 Annual Corporate Plan (in $millions)

Long Term Capital Investment Precincts Estimated Planned Balance of Total Capital Investment to Investment Capital Investment March 31, 2016 2016/17 Investment East Bayfront $392.5 $30.3 $278.4 $701.2 West Don Lands 185.7 14.3 36.2 236.2 Central Waterfront 278.3 1.4 0.2 279.9 Port Lands 102.5 1.8 1.0 105.3 Waterfront-wide Initiatives1 281.6 3.2 1.3 286.1 Waterfront Toronto Total $1,240.6 $51.0 $317.1 $1,608.7 Non Waterfront Toronto 322.6 10.4 47.4 380.4 Directed2 Total Long Term Plan $1,563.2 $61.4 $364.5 $1,989.1

1 Includes Waterfront-Wide Initiatives (WWI) such as Union Station Second Platform, Mimico Waterfront Park and Port Union Waterfront Park. 2 Non Waterfront Toronto directed programs are waterfront revitalization projects funded from the Corporation’s $1.5 billion in government seed capital but funding for which is flowed directly to other government agencies. For example, West Don Lands’ Flood Protection, GO Transit Expansion, Union Pearson Link, Fort York Pedestrian bridge and government waterfront secretariat costs.

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Included in the 2016/17 fiscal expenditure is the allocation of corporate costs by precinct, as follows:

Figure 2 - Allocation of 2016/17 Corporate Costs to Precincts (in $millions)

East West Don Central Port WWI Total Bayfront Lands Waterfront Lands Salaries and Benefits $5.9 $2.8 $0.3 $0.3 $0.6 $9.9 General and Office Administration 0.8 0.4 0.1 0.1 0.1 1.4 Communications, Public Engagement and 0.4 0.2 - - 0.1 0.7 Government Relations Information Technology 0.2 0.1 - - 0.1 0.4 Total Corporate Costs 7.3 3.5 0.4 0.4 0.8 12.4 Direct Project Costs 23.0 10.8 1.0 1.4 2.4 38.6 Waterfront Toronto Total $30.3 $14.3 $1.4 $1.8 $3.2 $51.0

The Corporation’s 2016/17 corporate budget will be held constant against the 2015/16 budget at $12.4M - this will ensure the Corporation has the ability to manage the closeout of existing projects and continue with ongoing priorities, while transitioning to the planning and design of new initiatives in support of Waterfront Toronto 2.0 and facilitating longer-term waterfront revitalization. Resources will be required for the development, coordination, planning and design of revitalization projects in the East Bayfront, West Don Lands and Port Lands. During the 2016/17 year, core responsibilities will be focused on three main areas, each of which are described below: 1) capital investments, 2) shadow capital projects, and 3) revenue generation and development management.

Capital investments are needed for the build out of East Bayfront and West Don Lands communities. Capital investment activities include managing planning, design and construction of public realm and physical infrastructure.

Shadow capital includes works where Waterfront Toronto acts as the primary steward of revitalization, but the capital investment is made by others. In these instances, Waterfront Toronto staff are responsible for project management and/or oversight of City of Toronto projects that are not part of the Corporation’s capital investments portfolio. Staff resources spent on these advisory roles are included within Waterfront Toronto’s corporate budget and the Corporation is partially reimbursed for providing these advisory services to the City of Toronto. These shadow capital projects encompass critical waterfront issues that require Waterfront Toronto involvement to protect our past investments, ensure ongoing land value creation, and deliver on the core corporate mandates of design excellence, quality of place, public access to the waterfront, and open and transparent planning and approvals processes. Priorities for 2016/2017 year include the revitalization of the Jack Layton Ferry Terminal including all permitting and approvals, the Environmental Assessment for the rehabilitation of the Gardiner

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Expressway East, the Environmental Assessment of the proposed runway extension at Billy Bishop Island Airport, the design of important public realm projects being implemented by our development partners, and overseeing design excellence compliance of private developments that are required to seek the approval of Waterfront Toronto’s Design Review Panel.

Revenue generation and development management include the work undertaken by Waterfront Toronto to deliver significant capital investment by our development partners. In particular, we undertake development planning initiatives to mitigate risk and improve the value of public land and attract private sector investment. We execute land disposition strategies to raise revenue and ensure Waterfront Toronto’s revitalization mandate is implemented. Specifically, activities include feasibility analysis, obtaining municipal development approvals, carrying out stakeholder and government negotiations, undertaking developer proposal calls and executing development transactions. Priorities for the 2016/17 year include advancing Bayside Phase 2 municipal approvals, including subdivision and environmental approvals, infrastructure payments agreement; overseeing Development Agreement compliance of Bayside Phase 1, Monde, River City Phase 3 and 4, Dundee Kilmer’s post-Pan Am/Parapan Games development, Anishnawbe Health Toronto, and Rekai . Efforts under revenue planning are instrumental in unlocking land values on the waterfront that are subsequently re-invested into revitalization.

Funding In 2001, the three orders of government pledged $1.5B ($500M each) as seed capital to help catalyze waterfront revitalization. The current forecasts for the total support of the waterfront revitalization include $1.5B in government seed funding, plus $79M in additional government supported investments (including Pan Am projects), and approximately $411M in Waterfront Toronto-generated revenue for a total of $2.0B in capital investment. These forecasts do not include Waterfront Toronto 2.0 initiatives since these projects have not received formal commitment and support from the tri-government partners.

By March 31, 2016, it is anticipated that 97 percent of government funding will have been invested in waterfront revitalization. The funding provided by each level of government has coincided with the respective governments’ planning and priorities. For 2016/17, government funding is estimated to make up 13 percent of the Corporation’s total estimated revenue and the balance at 87 percent will be from Waterfront Toronto generated revenue. Consequently the Corporation will increase its reliance on Waterfront Toronto generated revenue from 2015/16 when an estimated 46 percent of the Corporation’s total revenue was contributed from governments and 54 percent was attributed from Waterfront Toronto generated revenue (see Figure 3).

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13%

46%

54%

2015/16 2016/17

87%

WT Generated Revenue

Government Funding

Figure 3 – Funding Breakdown by Source

As anticipated, with less reliance on government contributions and to ensure financial sustainability, the Corporation is focusing its business model to one with an increased dependence on business development and revenue opportunities.

Business Development & Revenue Initiatives

In 2016/17 Waterfront Toronto will continue working on a number of business development initiatives which will be required to support implementation of Waterfront Toronto’s long-term objectives. With the majority of the government contributions already invested, Waterfront Toronto’s reliance on land sales and other revenues is critical to the organization’s ability to successfully deliver its projects.

Waterfront Toronto’s 2015/16 Long Term Plan includes additional blocks in the West Don Lands precinct which add $76M in revenues for waterfront revitalization. Waterfront Toronto will work in partnership with the Province towards the refinement and implementation of a disposition strategy – which sets out timing and approach to releasing these sites to market - for these blocks. The revenues from these additional land parcels are allocated to infrastructure and public realm improvements in West Don Lands and North Keating precincts.

The planned work in the West Don Lands will implement the Precinct Plan and Class Environmental Assessment master plan requirements, increasing the value of provincially owned land and facilitating redevelopment. These infrastructure investments include streetscape improvements and underground services on segments of Front and Trinity streets. These projects will commence in 2017/18 and take two years to complete.

Infrastructure improvements for the North Keating project will facilitate development for the private sector as well as enhance the attractiveness of Waterfront Toronto’s development block. The project focuses on Queens Quay, east of Parliament Street. Major works include re-aligning Queens Quay between Parliament and Small Streets, land acquisition and reclamation at the Parliament slip.

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Parliament Street will be extended to the re-aligned Queens Quay. Public realm enhancements and underground services will also be undertaken. These infrastructure investments will commence in 2018/19 and take two years to complete.

In 2016/17, Waterfront Toronto expects to complete a number of transactions and initiatives that will support the Corporation in achieving its revenue targets. These business development initiatives include planned revenue transactions, potential revenue opportunities and business development initiatives that support future growth. Planned revenue transactions for 2016/17 include the closing of land sales in the East Bayfront Precinct and the proceeds from the monetization and sale of George Brown College parking.

Waterfront Toronto is working with the City of Toronto to formalize mechanisms for securing revenues anticipated in Waterfront Toronto’s Council-approved East Bayfront Business and Implementation Plan, so that these revenues can be dedicated towards waterfront revitalization as initially planned. Examples of such revenue sources include infrastructure payments and parkland dedication charges, to reimburse Waterfront Toronto for its up-front delivery of precinct-wide parkland and infrastructure. Waterfront Toronto is also working with the City to secure contributions towards Waterfront Toronto’s East Bayfront Public Art Master Plan, which was approved by the Toronto Public Art Commission in 2015/16. The Corporation will continue working with City of Toronto staff in 2016/17 to formalize and clarify the assignment of these contributions. As the Corporation moves towards a greater reliance on its own revenues, the adverse impact from potential revenue shortfalls will increase. To shield the Corporation from revenue shortfalls due to timing and materialization of actual vs planned amounts, Waterfront Toronto will explore options to dispose of certain assets. The Corporation will carry out the due diligence on selling these assets in 2016/17. The Corporation will continue to research and pursue other revenue opportunities with a view to supporting Waterfront Toronto’s long-term priorities and the revitalization of the waterfront.

In addition to the revenue initiatives discussed, Waterfront Toronto has been approached by a private funder. Pending successful completion of these discussions, the Corporation will be the implementation agent to lead the design and construction of the Gardiner Animation Project. This initiative will create a series of public spaces beneath the between Bathurst Street and Strachan Avenue (1.1 kilometres) connected together by a continuous trail. The project will include significant active transportation infrastructure and provide important linkages between the Fort York neighbourhood and Central Waterfront and downtown area.

This initiative may be a catalyst for future waterfront philanthropy and stewardship. As such, the Waterfront Toronto will revisit the philanthropic plan in 2016/17. The Corporation will assess the interest in targeted fundraising and partnerships aligned with public realm projects and the most appropriate fundraising strategies for Waterfront Toronto to access those funds. Philanthropic funding will support the Corporation’s goal in fulfilling public realm projects as identified in Waterfront 2.0 as well as set up an operating and maintenance fund for Waterfront Toronto’s public realm. The philanthropic plan will allow the Corporation to better understand the organizational efforts and

November 27, 2015 Pg. 9 resources, including marketing, required to support these fundraising efforts. A key first step will be for the Corporation to adopt a legal framework to allow it to receive private funds and issue tax receipts.

Also in 2016/17, Waterfront Toronto will move forward in alignment with the Strategic Business Plan 2014-2023 (Waterfront 2.0). The Corporation will communicate to its stakeholders the commitment that is required to deliver Waterfront 2.0 and the potential impact of these initiatives. A key initiative is the Port Lands. The Port Lands - a massive underutilized area with extensive waterfront access – represent an unprecedented development opportunity for Toronto. However, most of the Port Lands are within the flood plain of the and must be flood protected before the area can be fully developed. The scope of the work includes rerouting the Don River to the middle of the Port Lands between the Ship Channel and the Keating Channel, remediating the area’s contaminated soil, creating new parks, wetlands and resilient urban infrastructure that will remove the flooding risk. There is a strong business case for flood protecting the Port Lands; doing so would enable the development of new, highly-livable, mixed-use communities in Toronto’s rapidly-growing downtown. Flood protecting the Port Lands will create significant economic value for the Canadian economy, showcase a focus on innovation and environmental sustainability, and will position Toronto as a global leader in building a resilient city. These new communities created by unlocking the Port Lands will attract the growing number of people coming to Toronto for the city’s quality of life and its economic opportunities as well as invite investment in commercial, residential and other development.

In 2016/17 Waterfront Toronto will complete the due diligence studies on the Port Lands flood protection and naturalizing the mouth of the Don River. These studies will provide Waterfront Toronto’s government partners with greater certainty on the estimated cost of the project. The due diligence studies will look at soil and groundwater management strategies, mitigation measures and an implementation strategy. Waterfront Toronto has proposed a shared funding solution for the Port Lands project, which would see each level of government provide one-third of the project funding. The project would take approximately seven years to complete and would be ready to start by 2017.

In 2016/17, the Corporation will work closely with the governments through the City of Toronto’s Call to Action, set up as part of the Waterfront Strategic Review, to establish funding for this project. The Call to Action is proposed as a structured intergovernmental negotiation process to confirm funding commitments for the Port Lands project and other revitalization priorities as set out in Waterfront 2.0. Also as part of the Waterfront Strategic Review, the City hired an external party to conduct a performance assessment of Waterfront Toronto. The external party examined the Corporation’s program and project delivery processes to facilitate the completion of 1.0 projects and develop recommendations on the next phase of revitalization. The report states “Waterfront Toronto has established both tri-government funding and tri-government buy-in”. Assuming a tri-government funding commitment for the Port Lands project, both City Staff and external party recommend Waterfront Toronto as the preferred delivery entity for the second phase of waterfront revitalization3. City Council affirmed its commitment for a tri-government partnership for ongoing waterfront revitalization in July 2015. At that time, City council also affirmed its four priority areas for revitalization

3 June 19, 2015, City of Toronto Staff Report, Waterfront Strategic Review

November 27, 2015 Pg. 10 including, flood protection, East Bayfront transit, land servicing and public realm. These priorities are consistent with Waterfront Toronto’s Strategic Business Plan 2014-2023, the Central Waterfront Secondary Plan and the City’s Official Plan.

Governance Waterfront Toronto places high value on the importance of good governance and have put in place strong government practices. The Corporation continues to practice this philosophy in the way it conducts its business. Waterfront Toronto operates in an open and transparent manner and its information disclosures meet or exceed those of similar agencies. In response to City of Toronto’s Waterfront Strategic Review in June 2015, Waterfront Toronto strengthened its Freedom of Information policies and wrongdoing reporting policies. These enhancements will improve the Corporation’s responsiveness to requests going forward and as it transitions to Waterfront 2.0.

Risk Management A sophisticated risk management framework is required to manage the complex business environment in which the waterfront is being revitalized. The Corporation has gained over 10 years of experience successfully managing and mitigating risk along with its formation of innovative approaches to infrastructure development and issues management. In 2016/17, with continuous improvement in mind, the Corporation will continue to further focus on risk management strategies. The following have been identified as the most significant risk categories to the Corporation meeting its objectives and deliverables for 2016/17:

i. Financial Sustainability Risks - Uncertainty in relation to future revenue

As the Corporation moves towards a greater reliance on its own revenues, uncertainty related to revenue streams driven by economic factors will increase. Informed and evidence-based estimates will help decrease the likelihood of overly aggressive targets and exposure to market risks, but the uncertainties related to economic factors will not be fully mitigated. To guard against short-term revenue shortfalls and adverse impacts to project delivery, the Corporation will set up a Capital/Revenue reserve. The reserve is capped at $25 million. If the Capital/ Revenue reserve is unused in 2022, the monies will be allocated to the East Bayfront boardwalk construction. In addition to the uncertainty related to revenues, risks impacting the financial sustainability of the Corporation due to uncertain government funding are expected to increase as the Corporation transitions to Waterfront Toronto 2.0 priorities. By March 31, 2017, 97 per cent of government funding will have been invested in Waterfront Toronto directed projects; $1.17B as a percentage of $1.2B of total government funding for Waterfront Toronto directed projects for Waterfront 1.0. Moving forward, it will require more effort and coordination to gain commitment from the varying

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levels of government on future infrastructure projects and funding to support the flood protection of the Port Lands and other key priorities as identified in the strategic plan.

ii. Project Risks – Unforeseen project issues and associated cost escalation

Infrastructure projects of the scale and complexity managed by Waterfront Toronto present many inherent risks and opportunities. Over the past decade, the Corporation has developed processes and utilized a wide variety of tools to better identify, understand, analyze, and manage capital project risks throughout the project life cycle. Key forms of risk addressed include: project cost overruns (“cost risk”), late project delivery (“schedule risk”), and adequacy of information to support project decision-making and oversight.

Risk awareness has been cultivated throughout the organization and risk management processes and practices have been implemented that are intertwined with all project management activities, with emphasis placed on risk mitigation and action. Lessons learned during the initial stages of revitalizing the East Bayfront, West Don Lands, and Central Waterfront Precincts have been captured in order to more effectively deliver future projects.

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Appendices (for Internal Information Only)

The Appendices below provide further details on Waterfront Toronto’s Long Term Plan (LTP) which is a key component of the annual planning process. The LTP reflects the annual cash flows required to successfully execute Waterfront Toronto’s business strategy over the next 7 years.

Below is a list of the Appendices:

1. Summary of Key Capital Investment Budget Changes 2. Summary of Key Revenue Changes 3. Fiscal Year 2015/16 LTP Investment and Funding Schedule 4. Summary of 2016/17 Key Project Deliverables 5. Summary of 2016/17 Key Risks

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Appendix 1 – Summary of Key Capital Investment Budget Changes The Waterfront Toronto capital investment program increased by $90.4M over last year’s estimates to a total of 1.99B (2014/15 $1.9B). Key budget changes by precinct are presented below.

In $ millions Key Changes Budget Key Changes Budget Increases (Decreases) East Bayfront $67.2 East Bayfront ($35.9) Project budget increases: (1) new scope to cover Project budget reductions: (1) infrastructure improvements in Queens Quay from change in scope of transit project to Parliament Street eastward, $50.6M; (2) additional accommodate the acceleration of project costs for storm water infrastructure, $10M; Queens Quay East revitalization, (3) environmental risk management costs $26M; (2) decreased scope for associated with affordable rental housing public art projects, $8.9M; (3) obligations in Quayside, $2.8M; (4) 1 daycare fit- decreases in other projects, $0.5M. out, $1.4M; (5) higher soil premium costs and associated dewatering costs, $2.4M. West Don Lands $30.8 West Don Lands $- Project budget increases: (1) new budget for No project budget reductions or infrastructure improvements in Front/Trinity savings. Street, $25M; (2) expanded public art scope, $4.4M; and (3) increases in other projects, $1.4M. Central Waterfront $2.3 Central Waterfront $- Project budget increases: (1) Queens Quay damage No project budget reductions or restoration works associated with claim savings. settlements, $1M; (2) expanded project scope for extension works, $0.8M; (3) design costs for Jack Layton Ferry Terminal, $0.2M; (4) increases in other projects, $0.3M. Port Lands $5.0 Port Lands ($1.1) Project budget increase: (1) Port Lands Flood Project budget decrease: (1) savings Protection due diligence and project planning. in Lower Don Lands area wide planning and preliminary work. Waterfront Wide Initiatives $2.6 Waterfront Wide Initiatives $- Project budget increase: (1) preparatory works for No project budget reductions or Waterfront 2.0, $1.4M; (2) Gardiner project, savings. $1.2M; Others $25.0 Others ($5.4) Project budget increase: Capital/Revenue reserve Project budget decrease: (1) established as a contingency measure. reduction in environmental reserve budget, ($5.0); (2) other project costs, ($0.4) Total Budget Increases $132.9 Total Budget Decreases ($42.4)

Net Increase to Total Capital Investments Year over Year $90.4

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Appendix 2 – Summary of Key Revenue Changes The Waterfront Toronto revenue forecasts increased by a total of $90.3M over last year’s estimates to a total of $411.3M (2014/15 $320.9M). Estimated revenue changes are outlined below.

In $ millions Key Changes Revenue Key Changes Revenue Increases (Decreases) Additional blocks from West Don Lands $75.6 Removed public art contribution from ($8.9) private landowners in East Bayfront given that no agreement in place for private landowners to dedicate art funds to Corporation Additional revenues from land transaction in West $5.0 Reduction in Section 37 charges from ($2.4) Don Lands private landowners due to lower estimated residential gross floor area Increase in parkland contribution from private $10.5 Reduction in Bayside revenues due to less ($1.9) land owners in East Bayfront residential parking in final design Increase in West Don Lands public art $5.0 contribution Increase in funding from Cost Recovery $4.5 Agreements (private developer funding for daycare facility in East Bayfront - $1.4M, insurance proceeds for Queens Quay rectification works - $1.0M, City Transportation funding for Martin Goodman Trail extension work - $0.8M, City funding for Gardiner work - $0.5M, miscellaneous cost recovery funding - $0.8M) Increase in net rental revenues. $2.8 Total Revenue Increases $103.4 Total Revenue Decreases ($13.2)

Net Increase to Revenues $90.3

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Appendix 3 – Fiscal Year 2015/16 LTP Investment & Funding Schedule In $ millions

Est. Inv. to Gov't. 1 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 Total Revenue Investments and Funding Mar. 31, 2016 Funding

Investments East Bayfront 392.5 30.3 67.3 87.9 54.3 21.8 24.6 22.5 701.2 413.7 287.5 West Don Lands 185.7 14.3 20.0 11.3 1.0 2.1 1.4 0.4 236.2 196.0 40.2 Central Waterfront 278.3 1.4 0.1 0.1 - - - - 279.9 224.5 55.4 Port Lands 102.5 1.8 1.0 - - - - - 105.3 98.6 6.7 Waterfront-wide Initiatives 281.6 3.2 0.7 0.6 - - - 286.1 265.7 20.4 Waterfront Toronto Total 1,240.6 51.0 89.1 99.9 55.3 23.9 26.0 22.9 1,608.7 1,198.5 410.2 Non Waterfront Toronto Directed 322.6 10.4 4.6 10.6 - 4.0 14.1 14.1 380.4 380.4 - Total Investments 1,563.2 61.4 93.7 110.5 55.3 27.9 40.1 37.0 1,989.1 1,578.9 410.2 Funding Government Contributions 1,484.8 14.3 23.7 17.9 5.3 4.1 14.4 14.4 1,578.9 Other Revenues 101.5 26.5 78.3 47.1 115.9 29.1 2.7 10.2 411.3 Total Funding before Borrowing 1,586.3 40.8 102.0 65.0 121.2 33.2 17.1 24.6 1,990.2

Annual Surplus/(Deficit) 23.1 (20.6) 8.3 (45.5) 65.9 5.3 (23.0) (12.4) 1.1 Cumulative Surplus/(Deficit) 23.1 2.5 10.8 (34.7) 31.2 36.5 13.5 1.1 1.1

Other Revenues are revenues outside of the government seed capital envelope of contributions. Other revenues of $26.5 in 2016/17 includes:  $4.9 from George Brown College parking revenues securitization – refer to Summary of 2016/17 Key Risks (Appendix 5);  $4.9 from Dockside Block 3 lease revenues securitization – refer to Summary of 2016/17 Key Risks (Appendix 5)  $4.2 from Toronto Water related to the sanitary servicing and storm water infrastructure for the East Bayfront;  $4.0 from West Don Lands land sale revenues;  $4.0 from East Bayfront land sale revenues;  $3.4 from developer public art contributions; and  $1.1 of other revenues (such as other parking and third party funding for cost recoveries).

The cumulative position of the Investment and Funding Schedule does not reflect in-year working capital position and cash fluctuations due to standard business transactions.

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Appendix 4 – Summary of 2016/17 Key Project Deliverables In $ millions

Total Key Project Deliverables Precinct Amount East Bayfront $30.3 . Soil management for Bayside Aquavista phase 2, ($2.7M) . Complete construction of Phase 1 Storm Water Management Facility core and shell, ($2.8M) . Complete dockwall reinforcement construction from Jarvis to Parliament, ($7.5M) . Complete hydro connection agreement with Toronto Hydro Electric Services, ($5.7M) . Commence planning and design for revitalizing Queens Quay East (Yonge – Small Street), ($0.8M) . Complete the Quayside Development Request for Proposal process and select Preferred Proponent . Completion of Pre-Development agreement for the Waterfront Innovation Centre; present recommendations to Toronto City Council West Don Lands $14.3 . Complete construction of Phase 1 Storm Water Management Facility core and shell, ($7.9M) . Close on sale of lands for River City Phase 4 Central Waterfront $1.4 . Complete scope on Queens Quay West that had to be deferred until Toronto Hydro Electric Services works are completed, ($1.0M) . Complete detailed plans and drawings for the first phase of improvements to the Jack Layton Ferry Terminal and Harbour Square Park, ($0.06M) Port Lands $1.8 . Obtain tri-government funding commitment for Port Lands flood protection . Complete Port Lands Flood Protection Due Diligence ($1.0M) Waterfront-wide Initiatives $3.2 . Complete the Gardiner Environmental Assessment . Complete update of the Lake Ontario Park Master Plan WATERFRONT TORONTO TOTAL $51.0

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Appendix 5 – Summary of 2016/17 Key Risks

Risks Impact Mitigation High Risk  Collection of section 37 charges and $22.6M from 2017/18 – 2020/21 Negotiate and execute revenue parkland dedication from private If revenue does not materialize, transfer agreement with the City of landowners dependent on timing of an upcoming project will be Toronto. development and City of Toronto removed from work plan (e.g. confirming transfer of charges to boardwalks located in East Waterfront Toronto. Bayfront and storm water quality facility phase 2).

 Return control of 9 Development $75.6M from 2017/18 – 2021/22 Negotiate and execute Blocks in West Don Lands to If revenue does not materialize, Memorandum of Understanding Waterfront Toronto (removed due public realm and infrastructure with MEDEI. to Pan Am Games) dependant on projects for Front/Trinity and Ministry of Economic Development North Keating will be removed Employment and Infrastructure from plan. (MEDEI) approval.

 Complications related to disposition $0.8M – $1.5M to 2016/17 Increased attention and resources strategy of George Brown College related to negotiation with will be required to manage and (GBC) parking sale due to different George Brown College. reduce uncertainty in relation to objectives of co-owners. Revenue revenue risks. If revenue does not could be impacted due to common materialize in 2016/17, Waterfront costs negotiation with GBC. Revenue $1M-$2M due to market factors. Toronto may utilize the could also be impacted due to lower Capital/Revenue reserve to replace revenue streams and unfavourable revenues from parking sale. market capitalization rates at time of sale.

 Uncertainty surrounding Dockside Revenue will not materialize in High level discussions between Block 3 lease revenues securitization 2016/17 if GBC fails to exercise Waterfront Toronto and GBC to due to GBC entering lease lease option - Waterfront confirmand finalize GBC’s intention agreement with a private developer. Toronto will have to market Block on lease option. If revenue does not 3. materialize in 2016/17, Waterfront Toronto may utilize the Capital/Revenue reserve to replace revenues from Block 3.

Medium Risk

 Revenues from final phase of land $4M in 2016/17 Sign Contribution Agreement with transaction remains uncommitted If revenue does not materialize, MEDEI for the outstanding $4M from MEDEI. an upcoming project will be from land transaction. removed from plan.

 Construction risks arising from Project is complex due to Attention and monitoring on project complexity and revenue proximity to the lake. Uncertainty revenue materialization in 2016/17. dependent funding. High risk project surrounding project funding Waterfront Toronto may utilize the (project is revenue dependent). Capital / Revenue reserve to fund

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Risks Impact Mitigation for 2016/17 include: Bayside Water’s Bayside water’s edge promenade if Edge Promenade, Phase 2. 2016/17 revenues are less than planned.

*Level of risk is defined as likelihood of occurring and / or impact to Corporation if risk materializes (as of October 2015).

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