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Bulletin

SAVE UNION STATION, Special Bulletin No. 10, January 24, 2003.

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In this issue:
A preliminary look at the proposed agreement with Union Pearson.

Today city staff released the long-awaited report on the agreement it is recommending that Toronto city council enter into with the Union Pearson Group for Union Station. The 17 page report may be found at:

the location of the Admininstration Committee's Agenda , or at the the city's website, click on `council’, `agendas’ and `Administration Committee’ for January 29.

The report does not include two critical documents: a Master Agreement; and a Lease. Apparently these are in draft form but will not be made public unless city council so decides. Councillor Doug Holyday said today at a meeting of the members of the proposed Public Advisory Group for Union Station that these would be made available after council had approved the staff report. (To the remark that it would then be too late, Holyday said the voters were unhappy they could take appropriate action in the coming municipal election.)

Given the MFP public inquiry and city council’s proven inability to investigate what it is signing, certain difficulties are raised about the inability of the public to see the documents under discussion.

Here are some of the main provisions in the staff report:

1. Union Pearson will be given a lease for 100 years – 35 years, plus 15 year renewal, plus a further 50 year renewal for building a pedestrian route from the Via concourse to the west side of Air Canada Centre, which is part of the Union Pearson proposal.

2. The revenue to the city comes in three parcels:

a) a base rent of $500,000 a year;

b) participatory rent equal to 5 per cent of net revenue after Year 11;

c) a bump up of the base rent subject to a formula that is not public but is found in the Master Agreement of Lease, and will not be made public unless city council so decides.

Staff were unable to estimate what amounts b) and c) might total.

It was pointed out that the hope of getting real money from a per centage of `net income’ was not too realistic. Many blockbuster Hollywood movies produce no `net revenue’ given the terms of the agreements under which they were made. Whether this would be the situation here depends entirely on the words in the agreement, but these are not available for the public to consider.

Currently, the city gets rental income from Union Station of $100,000 per month, or about $1.2 million a year. If the city were making capital repairs, some of this sum would be used so that the city return would be less, depending on the extent of the repairs funded each year. At the same time, the city is not currently maximizing revenue from the Station- the west wing, which Union Pearson thinks should be a hotel or an office building - is vacant.

Staff stated that this financial offer from Union Pearson was better than that made by LP Heritage, but at one point Councillor Holyday said that the reason the LP Heritage offer was better, was because it included more retail than Union Pearson. He was then corrected by Patty Simpson, the lead city staff person. Since we have not seen either bid, it is impossible to make fair comparisons between the proposals.

In any case, the Union Station proposed lease provides the city no rich bonanza. A return of $500,000 a year on a one hundred year lease means that in essence the city is selling the complex for less than $5 million. For such a prime piece of land, this seems not particularly attractive or wise, particularly given the problems with the Union Pearson plan.

3. The amount to be paid to the lawyers retained by the city to negotiate these matters is $250,000, or half of the first year’s revenue.

4. Once this report is approved, and the Master Agreement is signed, the Concept Design can be modified, although the terms of how this will happen and what the approval mechanisms will be are not spelled out.

5. Revenue will be put in a trust fund in order to respond to the challenges raised by those who have raised City Council’s obligations because of the `Walks and Garden Trust’ requiring that revenue in this area be devoted to parks.

6. The city retains the right to make decision in the future about additional density rights for building over the tracks.

7. Union Pearson ahs certain obligations to make certain improvements and changes to the Station in four phases. The first phase is the GO East concourse: the second is the Great Hall, the Central and West Concourse. The timing and extent of these changes are not spelled out.

This matter will be discussed by the Administration Committee on Wednesday January 29, 9.30 am, Committee Room 2, second floor, City Hall. It is critical that as many people as possible attend the meeting to speak on this matter. If you are unable to do this, write a letter to the Committee. The secretary of the committee is Patsy Morris, telephone 416-392-9151, email: pmorris@toronto.ca. Ms Morris will take requests for deputations and will receive letters to the committee.

It is expected that the matter will then be forwarded directly to the City Council meeting on February 4.

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