Regent Park Revitalization Building a Great Neighbourhood Board of Directors Presented By: Tom Burr Director - Regent Park Revitalization June 22, 2012
Purpose of the presentation About Regent Park Why revitalize? Financial imperative for revitalization Phase one and two review: Funding revitalization
About Regent Park before revitalization 69 acres (28hectares) of land in downtown Toronto 2,083 units in townhouse, walk-up, high rise Internal streets privately owned by Toronto Community Housing Dundas St. E runs through the centre of the community Two distinct character areas north and south of Dundas
Regent Park before revitalization 7,500 people 100% rent-geared-toincome 65% in Canada less than 10 years 3.6 children per household 41% under 16 years old 5% seniors $15,500/year average income Diverse, multiple languages
Historic context
Poor design & social exclusion Regent Park redesign sign of lessons learned Toronto Star, November 1, 2007 The concept was so inherently flawed, it s hardly surprising that 50-odd years later we are tearing down Regent Park and starting over again. The shared spaces, the isolation from the city, the separation of the neighbourhood from the urban grid these were well intentioned, but misguided steps
Why revitalization? Toronto Community Housing s corporate objectives Aging buildings Capital investment backlog 2008 Housing Strategy Stock at the end of useful life No government capital support for new building leverage latent land value Poor design and social exclusion Community activism and political pressure Corporate commitment to environmental sustainability
Drafting a plan for change The revitalization plan was built on extensive planning and community engagement multi-stakeholder process used to develop plan support for resident association to play lead role focus on economic development and youth growing interest in culture and arts improve community facilities to respond to existing (and future) residents needs
The revitalization plan Up to 6 phases 15 year development timeframe Phases overlap Replacement rental housing, new rental housing (from Provincial- Federal funding programs) New community facilities and parks Current phasing strategy
The revitalization plan Rebuilding a neighbourhood over 12,500 people Mixed income community Replace existing 2,083 RGI units (within the boundaries of Regent Park and in east downtown) Add approximately 700 new affordable rental units Approx 4,000 market housing units (includes affordable ownership opportunities) Pedestrian friendly streets Parks and open space Diverse architecture
Street alignment 1940s street design Re-introducing the grid Tower in the Park Reconnecting the urban neighbourhood
First two phases - a mixed community
Delivering a mixed-income community The community coming together in celebration ownership-blind design
Places for the community to meet TCHC enables investment from the City of Toronto, and local partners Making spaces for the neighbourhood and all residents to form bonds Aquatic Centre Regent Park Arts and Cultural Centre New Community Centre
Mixed use development Dundas Street East at Parliament before after
Phase one commercial (Parliament & Dundas) Planning for active streets, services & jobs by TCHC has whole or part ownership of all the retail / commercial assets we create
Job creation Community Economic Development Strategy Employment opportunities from revitalization partnerships Daniels construction trades Royal Bank Rogers Tim Hortons FreshCo:by Sobeys Employment Ontario Partners Dixion Hall Investing in Neighbourhoods Paye Initiative City of Toronto Employment connections off-site Total 59 21 2 40 80 10 4 24 2 22 216 480
It s: More than just housing A chance to improve parks, community facilities An opportunity to develop accessible and safe public streets A way to create local jobs and training programs It s Building a Great Neighbourhood
Major milestones
Financial Challenge: Capital Investment Backlog In 2002, TCHC commissioned a study by Morrison Hershfield on maintenance liability in pre-revitalization Regent Park. This identified an unfunded liability of $105M in 2002. Indexed to 2010, this figure would have risen to approximately $144M, if the revitalization had not commenced. Capital repairs would target units/buildings only and would not address poor planning, social /neighbourhood issues, and building design issues in the community
Master planning approvals & commitments Municipal policy commitments: planning framework set 2005 Regent Park Secondary Plan Zoning By-Law Draft Plan of Subdivision Section 37 agreement Tenant Relocation Assistance Implementation Plan (TRAIP) 60 40 tenure split market and rental Social Development Plan Replacement of 2,083 RGI Units (Family Sized) Community Commitments 12 Community Planning Principles
Phase one review
Development partnership Phase One - 2005 Competitive RFP The selection panel included a fairness assessor who endorsed the process (Justice Coulter Osborne) First RFP May 2005 awarded to Cresford Developments (from a field of 5 shortlisted bidders) the developer withdrew during due diligence stage Second RFP December 2005 - The Daniels Corporation were successful amongst 11 bidders (and 3 shortlisted) Both the phase one RFP and the resulting contract included an option to extend the contract into phase two Creation of Co-tenancy Joint Venture Created the Dundas & Parliament Development Corp (DPDC)
Development partnership Phase one deal terms: The first two projects started under a Guaranteed Maximum Price construction regime. For later projects in phase one this was amended to Construction Management Agreements. Toronto Community Housing liabilities: Replacement RGI housing Affordable rental housing Tenant relocation and assistance Demolition Site servicing (no City cost share) Environmental remediation (Province) Zoning & Lifting the Holding Symbol Market projects: 50-50 joint venture co-tenancy Land value price paid per market unit Profit waterfall (majority share to Toronto Community Housing) Toronto Community Housing acted as bank, providing a credit facility for Phase One market construction Strategy to create a market through build first
Regent Park Phase One: Complete Building a Mixed Income Neighbourhood Three new rental buildings 308 affordable + RGI units occupied: 1.246 Sackville 2.252 Sackville 3.One Oak Two market buildings occupied: 469 condominium units sold 1.One Cole 2.One Park West Townhouses occupied 57 rental townhomes 51 condominium townhomes 3 offsite rental buildings Community Energy System (2006) Construction Began 2006
Financing Revitalization Phase one (99% complete): Toronto Community Housing Investment: TCHC Rental Buildings. $191.67M Relocation & Demolition...$ 7.36M Site servicing (100%) $ 8.44M Soil Remediation.NET ZERO Master Planning. $ 7.57M Finance Costs $ 11.83M Regent Street C&Y Hub $ 5.37M Total Phase One..$232.23M ($246k per rental unit Buildings) $60.1M - 26% $39.8M - 17% $19.0M - 8% Regent Park phase one Financing TCHC's Investment $113.2M - 49% Bond A Allocation Profit Grants Corporate Cash Equity ($298k per rental unit - Total) Phase one market housing = 40% Phase one (including 3 off-site projects): TCHC Replacement RGI Rental 598 units TCHC Affordable / New Rental 182 units Profits 90% higher than in the original business plan Commercial Assets 100% in TCHC Buildings; 50%Asset in Market Buildings New City Streets & Community Facilities
Replacement units: Phase one RGI Replacement Phase One 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 123 149 73 46 207 587 660 141 58 39 1 2 3 4 5 Bedroom Type # Units Replaced # Units to be Replaced 2 5 bedrooms required
Relocated RGI Tenants (as at June 2012):
Phase one development highlights Awards summary 2010 FCM Sustainable Communities Award Toronto Urban Design Award of Excellence One Cole (Private Building in Context Tall Residence) 60 Richmond (Private Building in Context Midrise) Toronto Urban Design Award Regent Park Townhouses (Honourable Mention) 2010 Building of the Year (60 Richmond)
Phase one reflections TCHC vision & leadership was required to conceive of the revitalization plan, the first of its kind in North America In 2005, the market was engaged twice, and the best offer came from Daniels TCHC undertook large capital investment, in order to create a real estate market that makes revitalization possible. The market was created from nothing, in an area without any history of private ownership. In order to prove that the revitalization model worked, TCHC acted as the bank to the co-tenancy in the first four market construction projects. Risk was managed through a guarantee from The Daniels Corporation. The strategy paid off, when phase one profits repaid the loans. Through the successes of Regent Park, the revitalization model is now better accepted in the development marketplace. Later phases, and other revitalizations are benefitting from the heavy lifting needed in phase one.
Phase two review
Development partnership 2008 2009 A new development contract with Daniels TCHC Board authorises a new project agreement with Daniels Board report stressed that the development market had only recently been tested The condo market was still unproven Makes the case for continuity & avoiding duplication
Development partnership Phase two deal terms 2009 project agreement establishes a contractual framework under which Notices to Proceed are issued for each development project. TCHC has sole control over the allocation and timing of each NTP TCHC & Daniels have termination rights following a 2 year standstill period Continues Construction Management Agreement regime Toronto Community Housing liabilities: Same project elements as phase one Site servicing now includes 60-40 cost share with the City Market projects: Land value realized through an increased majority share of residential profit Creation of a new JV Nominee Company (PGDC)
Development partnership Creation of co-tenancies: Parliament & Gerrard Development Corp (PGDC) Toronto Community Housing Corporation The Daniels Corporation Guarantee Guarantee Regent Park Development Corporation Regent Park Co-Tenancy (established by Co-Tenancy Agreement) Daniels Eastside Corporation City Life Realty (Broker) Purchase Agreements Parliament & Gerrard Development Corporation (Nominee) Market Project Agreement Market Construction Contracts Various Contracts Purchases Daniels Construction Corporation Other Contracts
Financing Revitalization Phase two forecast investment (June 2012 Projections): Toronto Community Housing Investment: Housing Projects $118.74M Relocation & Demolition...$ 8.51M Site servicing (TCHC Share) $ 12.06M RPEI / Campus Electric.. ($ 6.29M) Environmental remediation.net ZERO Master Planning.$ 1.56M Financing.$ 6.83M Total Projection,,.$141.40M ($266k per rental unit building) Phase two will include: ($317k per rental unit - total) TCHC Replacement RGI Rental 309 units TCHC Affordable / New Rental 137 units $17.8M - 13% $4.7M - 3% $19.1M - 14% Regent Park phase 2 (2009-2015) $58.1M - 41% $41.4M - 29% Bond B Allocation Profit Grants Additional Commercial Borrowing Capacity Corporate Cash Equity Phase two market housing = 74% An improving financial performance Commercial Assets 100% in TCHC Buildings; 50%Asset in Market Buildings New City Streets & Community Facilities
Financing revitalization: TCHC is the master developer of Regent Park, enabling others to invest in community spaces: Arts & Cultural Centre.$24.00M Infrastructure Stimulus + $10M Fundraising ($3.3M Capital Budget) Site Servicing (City Share).$ 8.50M City Parks..$ 6.25M Community Centre...$21.00M Aquatic Centre..$17.00M $86.7M in outside investment in phase two
Replacement units: Phase two RGI Replacement Phase 2 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 303 284 100 60 222 407 525 114 44 24 1 2 3 4 5 Bedroom Type # Units Replaced # Units to be Replaced Family units are being delivered
Who is investing in Phase one and two? Toronto Community Housing City of Toronto Ontario /Federal Government Grants & Reimbursement (included in $373M) $373M $53M $59M
Creating a real estate market $260M sold / under contract
Challenges The condominium market
Strong foundations & momentum Phase two delivers a critical mass of revitalization Development and retail success Real estate market has been created Maximizing retail potential Extending the market potential on Dundas and Parliament Introducing large scale retailers and banks into the community Evaluate commercial terms Creating community success Place making, community interaction Modern, energy-efficient units for tenants Creation of new amenity spaces, and opportunity for social interaction Reconnecting with neighbouring communities The deepest level investment has been made
Thank You Contact: Tom Burr Director Regent Park Revitalization Tel: 416-981-4085 E-mail: tom.burr@torontohousing.ca