Regent Park: 180 Sackville St. (Block 22) IAHP Contribution Agreement

Transcription

1 Regent Park: 180 Sackville St. (Block 22) IAHP Contribution Agreement Item 1 January 23, 2013 Building and Investment Committee To: Building and Investment Committee Report: BIC: From: President and Chief Executive Officer Date: January 3, 2013 Page 1 of 4 PURPOSE: To seek the pre-approval of the Building and Investment Committee to authorize Toronto Community Housing staff to enter into a Contribution Agreement for grant funding under the Investment In Affordable Housing for Ontario Program (IAHP) for 180 Sackville Street, at Regent Park. RECOMMENDATIONS: It is recommended that the Building and Investment Committee: 1. Authorize the President and CEO or his designate to enter into a Contribution Agreement with City of Toronto for $3,000,000 funding towards the provision of 25 new Affordable Rental Housing units at 180 Sackville St. (Block 22, Phase 2 Regent Park) under IAHP. 2. Authorize the President and CEO or his designate to take the necessary action and incur capital commitments executing documents required as may be necessary and otherwise to give effect to the above recommendations. REASONS FOR RECOMMENDATIONS: In April 2011, the Board of Directors approved the Regent Park Phase 2 Anchor Business Plan (TCHC: C ). This set out the overall strategy and financial plan for TCHC s commitments under Phase 2, including the construction of replacement rental units that were previously demolished. Pursuant to the objective of building sustainable communities, the strategy included the provision of mixed tenure buildings, comprising RGI replacement and new Affordable Rental units. The Anchor Business Plan assumed $15M in Grant Funding would support the affordable rental program, based on guidance received from the City s Affordable Housing Office.

2 Regent Park: 180 Sackville St. (Block 22) IAHP Contribution Agreement Report: BIC: Page 2 of 4 In August 2011, the Province of Ontario published guidelines to Service Managers to submit proposals for funding pursuant to Ontario s Long Term Affordable Housing Strategy. The $480M program is intended to fund strategic objectives in the Province over a 4 year period to March The Province has allocated the City $103M towards programs in Toronto. The IAHP identifies 4 categories of investment applicable to Toronto: New construction of affordable rental ($32M) Affordable Homeownership ($6.6M) Repairs ($11.2M) Rent Supplements/ Housing Allowances ($53.2M) At its meeting of February , City Council approved the funding allocation of the $103M. The City of Toronto, as Service Manager for Toronto, has allocated $16.4M to Toronto Community Housing towards new affordable rental construction in Regent Park. This is to be allocated as $120,000/unit for 137 units of new affordable rental to be dispersed across the three rental replacement buildings in Regent Park Phase 2. The fact that half of the available program funds were allocated to Regent Park is indicative of the strategic importance placed on the revitalization. Table 1 IAHP New Affordable Rental Allocation in Regent Park, Phase 2 Block Address Block 20 Block 22 Block 24S 230 Sackville St. 180 Sackville St. TBD (St. David/Sackville streets) Building Total Units IAHP Units IAHP funding for building Construction Start Occupancy Contribution Agreement Status: $6M Under construction Q Signed $3M May 2013 Q Approval requested $7.4M TBD early TBD Approval to (TBD * be under requested design) in 2014 Total $16.4M * Block 24S is located on the current location of the Regent Park South Community Centre. The construction start for Block 24S is contingent upon completion of new Regent Park Community Centre by City of Toronto after which the existing community centre can be demolished and construction on Block 24S can start. Providing housing for a mix of incomes is a core principle of the Regent Park Revitalization, in order to build a healthy, sustainable community. Within new rental buildings, this refers to a mix of replacement RGI housing and new affordable rental housing (based on available funding). Council approval of the allocation of $16.4M to affordable rental construction in Phase 2 buildings will allow Toronto Community Housing

3 Regent Park: 180 Sackville St. (Block 22) IAHP Contribution Agreement Report: BIC: Page 3 of 4 to continue to provide mixed-income rental buildings in Regent Park. This program allows us to increase the income range in Toronto Community Housing buildings, and will help reduce polarization between rental and condominium buildings. The financial viability of providing affordable rental units under this program is contingent on receiving the identified grant funding. Units supported by IAHP funding will be available to households with an annual income of up to $81,000; the units are leased at no more than 80% CMHC Area Benchmark Rents. Construction start for 180 Sackville St. (information contained in Attachment 1) is proposed for Q2 2013, subject to further Board authorization. Staff first presented this project to BIC in March 2012 as part of the Gateway I approval process (BIC: C ). Following execution of the contribution agreement, the City will disburse funds to Toronto Community Housing as follows: 1) First Building Permit 50% ($1.5M) Q ) Completion of Structural Frame 40% ($1.2M) 3) Occupancy Permit 10% ($0.3M) Attachment 2 provides a form of an IAHP contribution agreement signed by Toronto Community Housing in March 2012 for 230 Sackville St. The terms of the IAHP contribution agreement for Block 22 will be the same as this existing agreement. A summary of the terms is as follows: Funding Terms: $3M will be advanced by the City as a forgivable loan, to be used solely to fund the development activities related to the 25 IAHP units in the building Funding assistance is also provided in the following (also applied to all rental buildings in Regent Park): exemption from development charges, reduction in parking requirements, waiving of parkland dedication payment requirements, planning application fees, building permit fees The principal balance of the funds will be reduced by five percent on each anniversary of the date the building is first occupied, until fully forgiven If the agreement is terminated before the funds are fully forgiven, TCHC will be required to repay to the City an amount equal to the outstanding balance of the funds as of the date of demand for repayment Toronto Community Housing is required to provide Security upon the execution of the agreement and prior to the advance of the funds, in the form of a Promissory Note in the amount of $3M (please refer to the attached Contribution Agreement for 230 Sackville St, Schedule A).

4 Regent Park: 180 Sackville St. (Block 22) IAHP Contribution Agreement Report: BIC: Page 4 of 4 IMPLICATIONS AND RISKS: Risk of Not Proceeding New Affordable Rental housing is part of the Business Plan for Regent Park. If the Board or City decides not to proceed with the Program, it represents a divergence from the current Business Plan and revitalization strategy for Regent Park. The allocation of unit types within 180 Sackville St. is based on the assumption that 25 units in the midrise building will be funded through IAHP. If the BIC does not approve the recommendations included in this report, the building will switch to 100% RGI units and will probably need to be redesigned to include more large units (generally IAHP units are the smaller units within the building and the RGI replacement requirements are for units with 2 or more bedrooms). Not proceeding with new affordable rental units from 180 Sackville St. will result in some re-working of the master plan with the GFA of rental buildings being totally allocated to RGI units. The ability to mix rental incomes within TCHC buildings is an important strategy for delivering sustainable, healthy communities. Building and Investment Committee is advised that other avenues are currently being explored, including mixed-tenure market and rental townhouses. However, any subsequently approved strategy will not impact the IAHP contribution agreement which relates to the mid-rise building on Block 22. Eugene E. Jones Jr. Eugene E. Jones Jr. President and Chief Executive Officer Attachments: 1: 2: 180 Sackville Data Sheet (Block 22, Phase 2 Regent Park) Example Form of Affordable Rental Contribution Agreement (230 Sackville St.) Staff Contact: Tom Burr Director Regent Park tom.burr@torontohousing.ca

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45