FINAL PRESENTATION

LAND LEASING FOR SCHOOL SUCCESS

C. Andrew, E.Bernier, S.Biglieri, K.Hickey, A.Mattinson, S.Millar, A.WintersRandy Hodge, Prof Amborski

FORLEASE

WHO IS THE TORONTO LANDS CORP.

Improving the quality of education for students in TDSB schools by maximizing value through the management and, where determined by the TDSB, the redevelopment and/or sale of properties no longer required by the school board.

TLC MISSION STATEMENT:

- Toronto Lands Corporation Website, 2014

THE 4 BIG ISSUES

BILLION CAPITAL BACKLOG

$3.5OPEN STUDENT SPACES IN TDSB CLASSROOMS

70,000OF SCHOOLS ARE> THAN 40 YRS

75% PROVINCIAL

FUNDING

INSUFFICIENTX

TERMS OF REFERENCE

To assess the use of public land leasing as a policy tool which recognizes the integral role of school sites within the local neighbourhood fabric and allows the Toronto Lands Corporation (TLC) to maximize community benefit and economic return from surplus school sites for the Toronto District School Board (TDSB).

JURISDICTIONAL SCAN

FORLEASE

CAN LAND LEASING WORK?

PRESENTATION OUTLINE

KEY FINDINGS FROM INTERVIEWS

PRO FORMA SITE SELECTION

FINANCIAL ANALYSIS

RECOMMENDATIONS

WHERE DO WE GO FROM HERE?

KEY FINDINGS FROM INTERVIEWS

INTERVIEWS

SUBJECT MATTER EXPERTS

PUBLIC SECTOR

DEVELOPMENTCOMMUNITY

COMMUNITYINTERESTS

DEVELOPMENT COMMUNITY

DEVELOPMENT COMMUNITYPREFER TO PURCHASE OVER LEASE

LEASEHOLDS PROVIDE MORE COMPLEXITY

LAND NEEDS TO BE DESIRABLE

FEW INDUSTRY LEADERS OR REPLICABLE MODELS

DEVELOPMENT COMMUNITYLONGER THE BETTER

50 YEAR MINIMUM

INVESTMENTS NEED TO BE CAPITALIZED

LEASE LENGTH

DEVELOPMENT COMMUNITYLONGER THE BETTER

50 YEAR MINIMUM

INVESTMENTS NEED TO BE CAPITALIZED

LOCATION WAS CRITICAL

HIGH DENSITY = HIGHER REVENUES

SITE LOCATION IS CRITICAL

DEVELOPMENT COMMUNITYLONGER THE BETTER

50 YEAR MINIMUM

INVESTMENTS NEED TO BE CAPITALIZED

LOCATION WAS CRITICAL

HIGH DENSITY = HIGHER REVENUES

RENTAL RESIDENTIAL MAY WORK

OTHER USES ARE MORE COMPATIBLE

LAND USES

DEVELOPMENT COMMUNITYLONGER THE BETTER

50 YEAR MINIMUM

INVESTMENTS NEED TO BE CAPITALIZED

LOCATION WAS CRITICAL

HIGH DENSITY = HIGHER REVENUES

RENTAL RESIDENTIAL MAY WORK

OTHER USES ARE MORE COMPATIBLE

LAND LEASING WAS TOO COMPLEX

CAN NOT COMPETE UNDER TLC’S MANDATE

NOT-FOR-PROFIT

THE PUBLIC SECTOR

THE PUBLIC SECTORSHOULD BE KEPT IN THE PUBLIC INTEREST

REVENUE GENERATION PRACTICES NOT COMPATIBLE WITH COMMUNITIES

LAND LEASING NOT FOR REVENUE

THE PUBLIC SECTORSHOULD BE KEPT IN THE PUBLIC INTEREST

REVENUE GENERATION PRACTICES NOT COMPATIBLE WITH COMMUNITIES

RE-ASSESS HIGHEST AND BEST USE MANDATE

INCLUDE CONSIDERATIONS FOR COMMUNITY BENEFIT

RE-ASSESS TLC MANDATE

THE PUBLIC SECTORSHOULD BE KEPT IN THE PUBLIC INTEREST

REVENUE GENERATION PRACTICES NOT COMPATIBLE WITH COMMUNITIES

RE-ASSESS HIGHEST AND BEST USE MANDATE

INCLUDE CONSIDERATIONS FOR COMMUNITY BENEFIT

IMPROVED COORDINATION AND COMMUNICATION

INCLUDE CITY IN DISPOSAL PROCESS

FORMALIZE ROLE FOR CITY

THE PUBLIC SECTOR SHOULD BE KEPT IN THE PUBLIC INTEREST

REVENUE GENERATION PRACTICES NOT COMPATIBLE WITH COMMUNITIES

RE-ASSESS HIGHEST AND BEST USE MANDATE

INCLUDE CONSIDERATIONS FOR COMMUNITY BENEFIT

IMPROVED COORDINATION AND COMMUNICATION

INCLUDE CITY IN DISPOSAL PROCESS

TIMEFRAME NOT CONDUCIVE

FAIR MARKET VALUE NOT FEASIBLE

PROVINCIAL LEGISLATION

COMMUNITY GROUPS

TIMEFRAME NOT CONDUCIVE

FAIR MARKET VALUE NOT FEASIBLE

COMMUNITY GROUPSREVENUE GENERATION NOT PRIORITY

KEEP SITES IN THE PUBLIC TRUST

NOT FOR REVENUE GENERATION

COMMUNITY GROUPSREVENUE GENERATION NOT PRIORITY

KEEP SITES IN THE PUBLIC TRUST

COMMUNITY WANTS SAY IN SURPLUS SITES

ENHANCE OVERALL TRANSPARENCY AND TRUST

PUBLIC ENGAGEMENT IS VITAL

COMMUNITY GROUPSREVENUE GENERATION NOT PRIORITY

KEEP SITES IN THE PUBLIC TRUST

COMMUNITY WANTS SAY IN SURPLUS SITES

ENHANCE OVERALL TRANSPARENCY AND TRUST

COMMUNITY USE AND ACCESS

SCHOOLS PROVIDE A NUMBER OF ASSETS

PUBLIC ACCESS AND USE

SUBJECT MATTER EXPERTS

SUBJECT MATTER EXPERTS

KEEP IN PUBLIC INTEREST

RESTRICTIVE PROVINCIAL LEGISLATION AND FUNDING MODEL

REVISIT TLC MANDATE

FORLEASE

CAN LAND LEASING WORK?

THEMES

THEMES

GOVERNANCE

THEMES

GOVERNANCE

PROCESS

THEMES

GOVERNANCE

PROCESS

COLLABORATION & PARTNERSHIPS

THEMES

GOVERNANCE

PROCESS

COLLABORATION & PARTNERSHIPS

REGULATORY

THEMES

GOVERNANCE

PROCESS

COLLABORATION & PARTNERSHIPS

REGULATORY

FINANCIAL FEASIBILITY

PRO FORMA SITE SELECTION

SITE SELECTION METHODOLOGY

SITE SELECTION METHODOLOGY:PARKLAND DEFICIENCY

SITE SELECTION METHODOLOGYCOMMUNITY CENTRE PROXIMITY

SITE SELECTION METHODOLOGY2012 ELEMENTARY SCHOOL ENROLLMENT RATES

Below 60%

60% - 75%

76% - 85%

86% - 100%

100% - 110%

Over 110%

SITE SELECTION METHODOLOGY2032 ELEMENTARY SCHOOL ENROLLMENT RATES

Below 60%

60% - 75%

76% - 85%

86% - 100%

100% - 110%

Over 110%

SITE SELECTION METHODOLOGYTHREE GROUPS

Below 60%

60% - 75%

76% - 85%

86% - 100%

100% - 110%

Over 110%

SITE SELECTION METHODOLOGYURBAN STRUCTURE

Employment DistrictsDowntownCentresAvenues

SITE SELECTION METHODOLOGYTRANSIT

Yonge LineBloor LineShepphard LineEglinton Crosstown

SITE SELECTION METHODOLOGYYORK, DOWNTOWN & EAST YORK BASE CASES

FINANCIAL ANALYSIS

DOWNTOWN(2.8 acres)

EAST YORK(7.4 acres)

YORK(5.3 acres)

DENSITY SCENARIO

LAND VALUEPER BUILDABLE SQ.FT*

FSICASE STUDYAREA

$130

$70

$40

$60

$80

$50

1.0

3.0

1.0

2.5

1.0

2.5

FINANCIAL ANALYSISASSUMPTIONS

LOW

HIGH

LOW

HIGH

LOW

HIGH*Obtained from industry sources

FINANCIAL ANALYSISTHE LAND LEASE PRO FORMA

FINANCIAL ANALYSISTHE COST OF LAND

FINANCIAL ANALYSISANNUAL LAND LEASE PAYMENT

(per sq.ft)

FINANCIAL ANALYSISANNUAL LAND LEASE PAYMENT

(per sq.ft)

FINANCIAL ANALYSISANNUAL LAND LEASE PAYMENT

50-YEAR LEASE LENGTH

DEVELOPER

Net Present Value (NPV) Internal Rate of Return (IRR)

•Downtown High Density•50 Year Lease Length•$4.28/sq.ft Annual Lease PMT•12.7% Developer IRR

•Developer IRR ranges from 9.5 to 12.6%

•Downtown High Density Scenario would be most likely

BASE CASE

FINANCIAL ANALYSISFINDINGS & BASE CASE

DEVELOPER

Net Present Value (NPV) Internal Rate of Return (IRR)

•Downtown High Density•50 Year Lease Length•$4.28/sq.ft Annual Lease PMT•12.7% Developer IRR

•Developer IRR ranges from 9.5 to 12.6%

•Downtown High Density Scenario would be most likely

BASE CASE

FINANCIAL ANALYSISFINDINGS & BASE CASE

DEVELOPER

Net Present Value (NPV) Internal Rate of Return (IRR)

•Downtown High Density•50 Year Lease Length•$4.28/sq.ft Annual Lease PMT•12.7% Developer IRR

•Developer IRR ranges from 9.5 to 12.6%

•Downtown High Density Scenario would be most likely

BASE CASE

FINANCIAL ANALYSISFINDINGS & BASE CASE

SENSITIVITY ANALYSISANNUAL LAND LEASE = $0

BASE CASESENSITIVITY

DEVELOPER

- $25,613,280 + 2%

$0

Impact on NPV Impact on IRR

SCENARIO: HIGH DENSITY DOWNTOWN

$0$25.6M 12.6% 14.6%

+20%

SENSITIVITY ANALYSISINCREASED COMMUNITY BENEFITS

BASE CASESENSITIVITY

DEVELOPER

- $79,657,300 - 3.6%Impact on NPV Impact on IRR

SCENARIO: HIGH DENSITY DOWNTOWN

$25.6M

-$54M

12.6% 9%

+2.5%

SENSITIVITY ANALYSISINCREASED COMMUNITY BENEFITS

BASE CASESENSITIVITY

DEVELOPER

- $1,900,075 -0.1%Impact on NPV Impact on IRR

SCENARIO: HIGH DENSITY DOWNTOWN

$23.7M$25.6M 12.6% 12.5%

+5%

SENSITIVITY ANALYSISPARKLAND DEDICATION

- $2,331,072 + 0.1%

BASE CASESENSITIVITY

DEVELOPER

Impact on NPV Impact on IRR

SCENARIO: HIGH DENSITY DOWNTOWN

$25.6M $23.3M 12.6% 12.7%

+25%

SENSITIVITY ANALYSISPARKLAND DEDICATION

BASE CASESENSITIVITY

DEVELOPER

- $12,146,272 - 1.2%Impact on NPV Impact on IRR

SCENARIO: HIGH DENSITY DOWNTOWN

$25.6M $13.5M 12.6% 11.4%

IS LAND LEASING FINANCIALLY VIABLE?

?

RECOMMENDATIONS

THEMES

GOVERNANCE

PROCESS

COLLABORATION & PARTNERSHIPS

REGULATORY

FINANCIAL FEASIBILITY

Use the Excel Tool created by the research team to communicate with the public and negotiate with the development community

- Foundation of understanding - Public communication - Enhance PARC evaluation - Negotiation tool

FEASIBILITY

Use the Excel Tool created by the research team to communicate with the public and negotiate with the development community

- Foundation of understanding - Public communication - Enhance PARC evaluation - Negotiation tool

FEASIBILITY

Use the Excel Tool created by the research team to communicate with the public and negotiate with the development community

- Foundation of understanding - Public communication - Enhance PARC evaluation - Negotiation tool

FEASIBILITY

Use the Excel Tool created by the research team to communicate with the public and negotiate with the development community

- Foundation of understanding - Public communication - Enhance PARC evaluation - Negotiation tool

FEASIBILITY

Use the Excel Tool created by the research team to communicate with the public and negotiate with the development community

- Foundation of understanding - Public communication - Enhance PARC evaluation - Negotiation tool

FEASIBILITY

Improve consultation with the City of Toronto, Province and other community stakeholders

- Educate to improve public acceptance - Host additional “Discovery Session” - Community land use concept

PROCESS

Improve consultation with the City of Toronto, Province and other community stakeholders

- Educate to improve public acceptance - Host additional “Discovery Session” - Community land use concept

PROCESS

Improve consultation with the City of Toronto, Province and other community stakeholders

- Educate to improve public acceptance - Host additional “Discovery Session” - Community land use concept

PROCESS

Improve consultation with the City of Toronto, Province and other community stakeholders

- Educate to improve public acceptance - Host additional “Discovery Session” - Community land use concept

PROCESS

Share data with the City of Toronto, the TDSB, and broader community stakeholders to best meet the needs of the local community

- Identify sites for land lease - Enhance general understanding - Align community needs - Improve “State of Good Repair” list

COLLABORATION & PARTNERSHIPS

Share data with the City of Toronto, the TDSB, and broader community stakeholders to best meet the needs of the local community

- Identify sites for land lease - Enhance general understanding - Align community needs - Improve “State of Good Repair” list

COLLABORATION & PARTNERSHIPS

Share data with the City of Toronto, the TDSB, and broader community stakeholders to best meet the needs of the local community

- Identify sites for land lease - Enhance general understanding - Align community needs - Improve “State of Good Repair” list

COLLABORATION & PARTNERSHIPS

Share data with the City of Toronto, the TDSB, and broader community stakeholders to best meet the needs of the local community

- Identify sites for land lease - Enhance general understanding - Align community needs - Improve “State of Good Repair” list

COLLABORATION & PARTNERSHIPS

Share data with the City of Toronto, the TDSB, and broader community stakeholders to best meet the needs of the local community

- Identify sites for land lease - Enhance general understanding - Align community needs - Improve “State of Good Repair” list

COLLABORATION & PARTNERSHIPS

Create a School Board Land Use Strategy with the TDSB, and revisit the TLC mandate to balance economic and social priorities.

- Measurable Objectives - Index of Sites - Criteria for land lease

GOVERNANCE

Create a School Board Land Use Strategy with the TDSB, and revisit the TLC mandate to balance economic and social priorities.

- Measurable Objectives - Index of Sites - Criteria for land lease

GOVERNANCE

Create a School Board Land Use Strategy with the TDSB, and revisit the TLC mandate to balance economic and social priorities.

- Measurable Objectives - Index of Sites - Criteria for land lease

GOVERNANCE

Create a School Board Land Use Strategy with the TDSB, and revisit the TLC mandate to balance economic and social priorities.

- Measurable Objectives - Index of Sites - Criteria for land lease

GOVERNANCE

Appeal to Provincial Ministries in collaboration with the TDSB and City to address immediate revenue pressure in a timely manner

- More time - Funding reform

REGULATORY

Appeal to Provincial Ministries in collaboration with the TDSB and City to address immediate revenue pressure in a timely manner

- More time - Funding reform

REGULATORY

Appeal to Provincial Ministries in collaboration with the TDSB and City to address immediate revenue pressure in a timely manner

- More time - Funding reform

REGULATORY

PILOT A LAND LEASE

WHERE DO WE GO FROM HERE?

IMPLEMENTATION FRAMEWORK

CREATE A STRATEGY

IMPROVE COLLABORATION

IMPROVE CONSULTATION

START LAND LEASING

IMPLEMENTATION FRAMEWORK

CREATE A STRATEGY

IMPROVE COLLABORATION

IMPROVE CONSULTATION

START LAND LEASING

STRATEGIC GOALS QUICK WINS

IMPLEMENTATION FRAMEWORK

CREATE A STRATEGY

IMPROVE COLLABORATION

IMPROVE CONSULTATION

START LAND LEASING

QUICK WINSSTRATEGIC GOALS

IMPLEMENTATION FRAMEWORK

CREATE A STRATEGY

IMPROVE COLLABORATION

IMPROVE CONSULTATION

START LAND LEASING

REVISE MANDATE

LEVERAGE EXPERTISE

SHARE DATA WITH CITY &COMMUNITY

EDUCATE ON LAND LEASING

STRUCTURE LEASECONTRACTS

QUICK WINS

LEVERAGE EXPERTISE

IMPLEMENTATION FRAMEWORKREVISE MANDATE

SHARE DATA WITH CITY &COMMUNITY

EDUCATE ON LAND LEASING

STRUCTURE LEASECONTRACTS

REDUCEFUNDING

PRESSURE

MODIFYO.REG

444/98

DEBT FINANCING FEASIBILITY

STRATEGIC GOALS QUICK WINS

CREATE A STRATEGY

IMPROVE CONSULTATION

START LAND LEASING

IMPROVE COLLABORATION

LEVERAGE EXPERTISE

IMPLEMENTATION FRAMEWORK

CREATE A STRATEGY

IMPROVE COLLABORATION

IMPROVE CONSULTATION

START LAND LEASING

REVISE MANDATE

SHARE DATA WITH CITY &COMMUNITY

EDUCATE ON LAND LEASING

STRUCTURE LEASECONTRACTS

REDUCEFUNDING

PRESSURE

MODIFYO.REG

444/98

DEBT FINANCING FEASIBILITY

STRATEGIC GOALS QUICK WINS

FINAL PRESENTATION

LAND LEASING FOR SCHOOL SUCCESS

FORLEASE

C. Andrew, E.Bernier, S.Biglieri, K.Hickey, A.Mattinson, S.Millar, A.WintersRandy Hodge, Prof Amborski