Thursday, January 21, 2010
Thursday, September 10, 2009
Grass to BMO report
September 9, 2009
To: The Board of Governors of Exhibition Place
From: Dianne Young, CEO, Exhibition Place
Brenda Patterson, General Manager, Parks, Forestry & Recreation
Subject: Upgrades to BMO Field at Exhibition Place and Allan Lamport Stadium
Summary:
This report provides the principal terms and conditions of agreements to be entered into with
Maple Leaf Sports & Entertainment Ltd. (MLSE), the City and the Board of Governors of
Exhibition Place (Board) and agreements with MLSE, the City and the Toronto District School
Board (TDSB) with respect to:
(a) Replacement (by and at the sole cost of MLSE) of the current Field Turf field at BMO Field
with a natural grass field at an estimated cost of $3.5M;
(b) Commitment of $2.0M by MLSE for community sports facilities in the form of:
(i) the construction (by and at the sole cost of MLSE) of the necessary installations at
Allan Lamport Stadium (Lamport) to allow for the relocation and erection of a
winter bubble (the bubble presently used at BMO Field) at a cost of approximately
$1.2M with a licence to MLSE to use that part of Lamport as determined by
Parks, Forestry and Recreation to operate the winter bubble community soccer
operations only for the period of November 1st to April 30th in each year of the
licence term which term will be co-terminus with the management agreement term
for BMO field which expires on December 31, 2027; and
(ii) a commitment of approximately $0.8M for the construction/installation of a Field
Turf field at Lakeshore Collegiate Institute in Etobicoke (subject to an agreement
between the City and the TDSB for use of such field for July and August of each
year) or upgrades to such other sports facility in Ward 6 as determined by the
General Manager, Parks, Forestry and Recreation Department in consultation with
the Ward 6 Councillor.
All costs of construction (totaling $5.5M) of the grass field at BMO Field; the winter bubble at
Lamport; and the Field Turf field at Lakeshore Collegiate Institute will be solely at the cost of
MLSE. In addition, MLSE will guarantee that there will be no lost income whatsoever to the
BMO Field/Exhibition Place operations because of the conversion of BMO Field from field turf
to natural grass which guarantee has a minimum value of $0.182M each year.
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Furthermore, at a minimum, MLSE is guaranteeing that MLSE will pay the City an amount of
$50,000 annually (escalated by CPI annually) to a Lamport Capital Reserve Fund to be set up by
the City for replacement of the bubble and field turf at Lamport. In addition, the City will share
with MLSE 50% of the net profits from Lamport which are estimated to be approximately
$22,000 annually. Finally, the Lakeshore Collegiate Institute site (or equivalent outdoor sport
facility) has the potential of earning $18,000 annually in rental revenues for the City based on the
number of hours proposed to be booked in July and August each year as set out in Appendix “B”
to this report.
From a community sports use perspective, the proposals noted above increase the potential
community use by over one thousand (1,000) hours (with Lamport and BMO Field) as shown in
Appendix “B” and by 2,849 hours if one adds the annual use of Lakeshore Collegiate Institute
Field (or equivalent facility). In addition to this community use at BMO Field on natural grass,
there will still be a right to use BMO Field by the City for 14 days, Ontario Soccer Association
(OSA) for 6 days, Canadian Soccer Association (CSA) for 6 days, and the annual CNE for 18
days. The conversion of BMO Field to natural grass will be seen as a very positive direction by
both the CSA and OSA for attracting major international teams to play in Toronto and also to
attract premier FIFA competitions as stated by these organizations in letters attached as
Appendices “C” and “D”.
Recommendation(s):
It is recommended that:
1. The Letter of Intent (LOI) between the Board, the City and MLSE attached as
Appendix “A” be approved:
(a) by the Board, subject to approval of City Council, as such LOI amends the
Management Agreement (between MLSE, the City and the Board with respect to
BMO Field) and Team Licence Agreement (between MLSE, the City and the
Board with respect to BMO Field) substantially on the terms and conditions
outlined in Sections A and D of the LOI and such other terms and conditions as
required by the Deputy City Manager & Chief Financial Officer, the CEO of
Exhibition Place and the City Solicitor;
(b) by City Council, as such LOI addresses the upgrades and uses of Lamport and a
licence agreement for Lamport Stadium to MLSE substantially on the terms and
conditions outlined in Sections B and D of the LOI and such other terms and
conditions as required by the Deputy City Manager & Chief Financial Officer,
the General Manager of Parks, Forestry & Recreation and the City Solicitor;
and
(c) by City Council, as such LOI addresses the upgrades and uses of Lakeshore
Collegiate (or such other City or TDSB property located in Ward 6) substantially
on the terms and conditions outlined in Sections C and D of the LOI and such
other terms and conditions as required by the Deputy City Manager & Chief
Financial Officer, the General Manager of Parks, Forestry & Recreation and the
City Solicitor;
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2. City Council approve of the amendments to the Contribution Agreement between the
City, the Province of Ontario and Government of Canada substantially on the terms
and conditions outlined in paragraph 8 of the LOI between the Board, the City and
MLSE attached as Appendix “A” to this report and such other terms and conditions
as required by the Deputy City Manager & Chief Financial Officer and the City
Solicitor;
3. City Council approve of establishing an obligatory interest bearing reserve fund,
called the “Allan Lamport Stadium Reserve Fund” to provide a source of funding for
capital improvements for Lamport and the $50,000 annual payment from MLSE to
the City be paid into this Reserve Fund;
4. The approval of the Board and City Council be expressly subject to receipt of
approval from the TDSB (if required), the Province of Ontario and the Government
of Canada and in the event that these preconditions are not satisfied and are not
waived, the parties shall each have a right to terminate the LOI in which event, the
parties shall remain responsible for their own costs incurred to the date of
termination; and,
5. That City Council declare the proposed upgraded Lamport Stadium to be a
municipal capital facility for the purposes of the municipality and public use pursuant
to section 252 of the City of Toronto Act, 2006, and pass a by-law to authorize the
entering into of an agreement for the provision of the facility, and request the City
Clerk to give notice of the municipal capital facility by-law as required under the City
of Toronto Act, 2006.
Financial Impact:
The recommendations in this report will result in a capital investment of $5.5M solely by MLSE
in the Exhibition Place site, Lamport Stadium and Lakeshore (Etobicoke) Collegiate Sports Field
(or other sport facility within Ward 6) for upgrading all three venues in the specific amounts as
noted above in this report.
On the basis of the financial proformas provided by MLSE, the upgrades to be installed will
result in minimum additional income of $50,000 for the City to be paid into the Lamport Capital
Reserve Fund and additionally, there is the potential that the City (Parks, Forestry and Recreation
Department) will earn approximately $22,000 from its 50% share of net profits from Lamport
community use. In addition, the City Parks, Forestry and Recreation Department has the
potential of earning $18,000 from summer rentals of a upgraded field either at Lakeshore
Collegiate or another sports facility within Ward 6.
MLSE has guaranteed that the proposed amendments in the Board agreements will have no
negative financial impact on Exhibition Place revenues which guarantee has a value of $182,000
annually. The change to natural grass at BMO Field has the potential of positive revenues to
Exhibition Place from BMO Field operations of 50% of $75,000 if just one major international
soccer event is booked at BMO Field each year.
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Decision History:
At its meeting of October 2005, the Board approved of entering into a project (construction)
agreement, a management agreement and facility usage agreements between the Board, the City
and MLSE.
At its meeting of October 26, 27, 28 and 31, 2005, City Council approved of Clause No. 36 of
Report No. 9 of the Policy & Finance Committee which basically adopted the report and
recommendations of the Board. In accordance with the Council authority, the Board, City, MLSE
(as manager) and MLSE (as owner of Toronto FC) entered into a Management Agreement and
Team Licence Agreement with respect to BMO Field.
Comments:
The construction of the BMO Field soccer stadium which totaled $62.8M was dependent on
funding by the various levels of government (Federal $27.2M; Provincial $7.8M; Toronto
$9.8M; MLSE $18.0M). Justification for the provision of government funding in 2005/6 was the
commitment by FIFA and the Canadian Soccer Association (CSA) to hold the FIFA Men’s
Under 20 World Youth Championship in Canada in 2007 with Toronto being the host city where
the final match was played. An economic impact analysis of the FIFA event showed total direct
spending impact of this Championship in six cities in Canada of $12.3M and indirect and
induced spending of $5.4M with the economic impact for Toronto being $1.5M and $2.1M
respectively. This FIFA Championship was considered by all participants to be a resounding
success.
The positive experience (both financially and entertainment value) of BMO Field soccer stadium
post-FIFA Championship has been far above any projected expectations. Home to the Toronto
FC, the stadium is sold out (20,000 seats) for each of the 20 home/friendly games. In addition,
since its construction in 2006/07, the stadium was the site for the 2007 Genesis World Tour, the
2008 Major League All-Star Game and in 2009 hosted an exhibition game between the Toronto
FC and Real Madrid and then during the 2009 CNE, hosted an exhibition game between
Portugal’s Benefica and Scotland’s Celtics. The economic impact of all these major events for
the City of Toronto would be in the range of $10.0M to $15.0M. In addition to these economic
impacts, since opening, the stadium has contributed a total of $2.1M (2007 – 2009) to Exhibition
Place revenues in the form of a share of net profit from BMO Field and parking revenues.
The other major impact of BMO Field has been its contribution to community sports for the City
and its residents which again was a major factor for the various levels of governments that
contributed to the funding of this soccer stadium with its winter bubble. BMO Field has been
very successful in attracting community soccer teams and as shown on Appendix “B”. In 2008
the community used this facility a total of 4,895 hours and in addition to this use, the following
organizations have rights to use the field:
•Canada Soccer Association for 6 days
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•Ontario Soccer Association for 6 days
•City of Toronto for recreation use for 14 days
•Canadian National Exhibition (CNE) for 18 days
•City/Board can use the stadium for World’s Fair and Olympics or other international
events; for example, BMO Field is part of the City’s 2014 Pan Am Bid
Lamport Stadium
Parks, Forestry and Recreation Department operates and programs Lamport Stadium for a variety
of activities including soccer, field hockey, lacrosse, football, baseball and several significant
community events from May 1st to October 31st each year. The stadium has lights, a public
address system, a scoreboard, parking and ticket-taking facilities. A new artificial Field Turf
surface was added in 2007 and, with the addition of a temporary solid surface, Lamport is
capable of hosting many non-traditional events.
The prospect of a seasonal dome over the stadium surface will allow for year-round use of this
downtown facility and expand the recreational opportunities throughout the year. This will
greatly assist in meeting the demand for indoor soccer during the winter season.
With respect to the future replacement of the Field Turf and the Bubble at Lamport, it is
estimated that the existing Field Turf (installed in 2008 at Lamport) will have to be replaced in
2016 at a cost of $500,000 and the bubble (purchased in 2007 for BMO Field) will have to be
replaced in 2026 at approximately $800,000. Accordingly, a guaranteed contribution of $50,000
annually by MLSE to the Lamport Capital Reserve Fund should result in sufficient funds to pay
for 50% of these replacements as they are required.
Risk of the Proposal
The risk to the Board/City of this proposal is no greater than the risk the Board/City has under the
present agreements with MLSE relating to BMO Field. While it has not happened in the first
three years of operations, if, for whatever reason, the MLSE projections are not achieved, then
50% of the operating deficits and any shortfalls in the capital funding must be funded by the
Board/City. Pursuant to the existing agreements between the City/Board and MLSE, MLSE has
provided a one-time non-revolving fund of $250,000 to address operating shortfalls in the first
instance. None of these funds have been used to date. However, if the $250,000 fund is depleted,
remaining operating shortfalls are to be funded equally by MLSE and the Board.
This risk profile has not been changed by this new proposal however, MLSE has provided within
the LOI additional annual guarantees which total $0.331M annually and are as follows:
•Guarantee payment to the City as part of the Lamport bubble operations lease $50,000
which the City will set aside in a Lamport Capital Reserve Fund
•Payment to the City of 50% of any net revenues from Lamport estimated to be in the
range of $22,000
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•Guarantee payment to BMO Field of lost community use income of $112,000 annually
(increased by CPI annually)
•Guarantee payment to Exhibition Place of lost parking income of $70,000 annually
(increased by CPI annually)
•Guarantee payment by Toronto FC to BMO Field of all added maintenance costs resulting
from having natural grass rather than field turf. Toronto FC will pay BMO Field the
difference between the cost of maintaining the natural grass in any year less the 2008 cost
of maintaining the field turf (as this 2008 field turf cost is increased by CPI annually)
Municipal Capital Facility
Given the public-private nature of the proposed project, which will result in the major renovation
to the field costing approximately $5.5M all of which is to be paid by MLSE to build the
necessary infrastructure for the installation of a winter bubble on the field and the long term
licence agreement between the City and MLSE from November 1st to April 30th each year to
operate the bubble for community purposes, the City Solicitor has advised that it is appropriate
that City Council declare the Lamport facility as a municipal capital facility and pass a by-law to
authorize an agreement for the licensing of the facility and provision of the winter bubble to the
Parks, Forestry and Recreation Department of the City of Toronto.
Contact:
Dianne Young, CEO
Tel: 416-263-3611
Fax: 416-263-3640
Email: dyoung@explace.on.ca
Brenda Patterson, General Manager
Parks, Forestry & Recreation
City of Toronto
Tel: 416-392-8182
Fax: 416-392-8565
Email: bpatter2@toronto.ca
Submitted by:
___________________ _____________________________
Dianne Young, CEO Brenda Patterson, General Manager
Exhibition Place Parks, Forestry & Recreation
Appendix “A”
September 9, 2009
Delivered
The Board of Governors of Exhibition Place
Queen Elizabeth Building
Exhibition Place
Toronto, ON M6K 3C6
Attention: Dianne Young
Chief Executive Officer
City of Toronto
Toronto City Hall, 2nd Floor
100 Queen St. West
Toronto ON M5H 2N2
Attention: Mr. Joe Pennachetti
City Manager
Dear Sir and Madam:
Re: Proposal for Relocation of Bubble to Lamport Stadium/Implementation of Natural Grass Field at
Soccer Stadium at Exhibition Place
This Letter of Intent (“LOI”) will summarize a potential framework for agreement by The Board of
Governors of Exhibition Place (the “Board”) and the City of Toronto (the “City”) to the proposal by
Maple Leaf Sports & Entertainment Ltd. ("MLSE") to undertake, at its sole cost, the:
(a) Replacement of the current artificial turf field at the Soccer Stadium (BMO Field) at
Exhibition Place (the “Soccer Stadium”) with a highest quality level grass field;
(b) Relocation of the current winter bubble at the Soccer Stadium to Allan Lamport Stadium
(“Lamport Stadium”); and
(c) Rebuilding of a proper artificial turf field at Lakeshore Collegiate Institute in Etobicoke by
agreement with the Toronto District School Board (“TDSB”) OR, in the event that an
agreement cannot be finalized with respect to Lakeshore Collegiate, upgrading of a City
Parks facility for community sports purposes as selected by the City in its sole and unfettered
discretion with an equivalent monetary value (being $2 million less the cost to complete the
Lamport Stadium improvements).
1. Pre-Conditions:
The parties acknowledge and agree that any agreement to this proposal by the Board, City and MLSE will
be subject to the receipt of approvals from the Board, City Council, the TDSB, the Province of Ontario
(“Ontario”) and the Government of Canada (“Canada”). MLSE agrees that it shall be responsible for
obtaining and securing the approval of the TDSB. The City and the Board agree that they shall be
responsible for obtaining the approval of Ontario and Canada. The approvals from Ontario, Canada and
the TDSB shall be satisfactory to MLSE, the Board and the City on the terms as contemplated in this LOI.
In the event that the terms of any approval have a material adverse impact on the transactions as
contemplated in this LOI (including the rights and obligations of the parties) as determined by a party in
its sole and unfettered discretion, any affected party may terminate this LOI and the parties shall have no
liability to each other as a result of a failure to obtain acceptable approvals. The parties agree that, in the
event that these approvals cannot be obtained by November 27, 2009 that MLSE shall proceed to deploy
the winter bubble at the Soccer Stadium, and in the event that these approvals are still not received by
January 1, 2010, that MLSE shall proceed to take whatever action is required in accordance with the
Soccer Stadium Management Agreement to ensure that the Soccer Stadium is ready for use in Spring
2010. Despite the foregoing, the parties acknowledge and agree that in the event that the approval of the
TDSB cannot be obtained on or before October 1, 2009 for a facility at Lakeshore Collegiate, then MLSE
shall not be entitled to terminate this LOI but shall be required to provide an upgrade to a City Parks
facility for community sports purposes as selected by the City in its sole and unfettered discretion with an
equivalent monetary value (being $2 million less the cost to complete the Lamport Stadium
improvements).
2. Timing: The parties are entering into this arrangement on the understanding that all construction
shall be completed by MLSE, at its sole cost (including any cost overruns or environmental remediation)
so as to allow the new facilities at the Soccer Stadium, Allan Lamport Stadium and Lakeshore Collegiate
to be available for use by the dates as set out below, subject to such reasonable and unavoidable delays in
construction as may occur. MLSE agrees that, despite any delay in the completion of construction, it
shall remain responsible for completing these new facilities and, in the interim, satisfying community use
requirements and all guaranteed payments. Despite the foregoing, MLSE also agrees that it shall, as
indicated in section 4(b) below, immediately upon receipt of all required approvals commence
excavations at Lamport Stadium in order to allow the parties to determine any environmental remediation
requirements and decide whether to proceed with the contemplated arrangements.
3. Agreement Framework: The parties acknowledge and agree that implementation of the terms
of this LOI will require the negotiation and finalization of the following long form agreements on terms
satisfactory to the parties:
(a) Agreement to amend the current Management Agreement (January 1, 2007) between the
Board, City and MLSE for the Soccer Stadium to reflect the terms as set out in this LOI;
(b) Agreement to amend the current Team Licence and User Agreement (January 1, 2007)
between the Board, MLSE and MLS Canada U.L.C. to reflect the terms as set out in this
LOI
(c) License Agreement to allow MLSE to operate the bubble and field at Lamport Stadium
on an annual basis during the winter season for a term to coincide with the term of the
Management Agreement;
(d) Agreement to amend the Contribution Agreement (June, 2006) between the City, Ontario
and Canada to reflect the terms of this LOI; and
(e) Agreement between the City, TDSB and MLSE to permit the construction of the artificial
turf field at Lakeshore Collegiate and provide the City with exclusive use and revenues
from the field during the months of July and August, on the terms as set out in this LOI,
OR an agreement between the City and MLSE requiring MLSE to provide an upgrade to
a City Parks facility for community sports purposes as selected by the City in its sole and
unfettered discretion with an equivalent monetary value (being $2 million less the cost to
complete the Lamport Stadium improvements).
4. Costs/Remediation Costs:
(a) Except as otherwise explicitly set out in this LOI, all costs of construction contemplated under the
terms of this LOI shall be for the sole account of MLSE.
(b) The parties agree that MLSE shall, upon receipt of the approvals required in section 1,
immediately commence excavations as required for the installation of the bubble at Lamport
Stadium. In the event that environmental remediation is required by the Environmental
Protection Act (and associated regulation) (the “Act”) to proceed with the construction of the
bubble at Lamport Stadium or Lakeshore Collegiate (or other selected Parks site) as a result of
preliminary excavations of the work area by MLSE, then MLSE agrees to assume the costs of the
remediation to such areas as required by the Act. In the event that MLSE is unwilling, within
thirty (30) days from the date that it is evident that remediation is required, to assume such costs,
MLSE or the City/Board may immediately terminate this LOI and all agreements contemplated
hereunder. In the event of termination, MLSE shall bear the cost of any work required to restore
the areas so disturbed by MLSE to their previous condition and remediate as required by the Act.
MLSE agrees that it shall then proceed with the deployment of with winter bubble at the Soccer
Stadium in accordance with the Management Agreement for the 2009/2010 season as
contemplated under the Soccer Stadium Agreement.
SECTION A
5. Soccer Stadium Management/Team Licence Agreements
Minimum Grass Field Specifications: The level grass field to be constructed at the Soccer
Stadium will be of the highest quality and shall conform to all CSA, Major League Soccer
("MLS") and Federation Internationale de Football Association ("FIFA") specifications and
requirements (the "Minimum Specifications").
(a) Construction: The construction and installation of the grass field shall be undertaken by MLSE at
an estimated cost of $3.5 million, at its sole expense (including cost overruns and any required
environmental remediation) and completed by May 1, 2010, subject to the following:
i. MLSE shall, prior to commencing construction, obtain all necessary permits and
approvals at its sole expense.
ii. Union and trade association agreements for Exhibition Place shall apply to the
construction work and MLSE shall ensure that all work is done in compliance
with those agreements;
iii. Representatives and consultants (if any) of the Board/City shall be entitled to
regular periodic updates and reviews from MLSE as to material/significant
matters during the pre-construction and construction process with reasonable
access to the site and to all relevant plans, drawings, development documentation
and other relevant materials. The Board/City shall promptly identify any
concerns arising as a result of such updates and reviews.
iv. MLSE shall comply with the holdback provisions of the Construction Lien Act
and shall forthwith cause any such liens to be removed. MLSE shall indemnify
the Board/City against any and all claims, loss, costs and expenses as a result of
any lien or claims for lien.
v. MLSE shall ensure that performance bonds, labour and materials bonds and
construction period insurance have been provided or arranged to the satisfaction
of the City’s Manager of Insurance and Risk Management.
vi. Substantial completion shall be in accordance with the substantial performance
requirements of the Construction Lien Act in time to allow the use of the grass
field to commence by May 1, 2010, (provided that MLSE shall have no liability
to the Board/City for its failure to achieve substantial completion by the date
stipulated herein, to the extent that such failure is directly attributable to the
inability of MLSE to obtain all necessary permits and approvals solely as the
result of unreasonable delays in the processing of such permits or approvals.)
vii. MLSE shall ensure that all third party agreements for the construction and related
services contain the usual events of defaults and remedies, including termination.
viii. MLSE shall ensure that all principal construction and consulting agreements
entered into by MLSE shall permit the Board/City to assume MLSE's position if
the Management Agreement is terminated.
ix. MLSE shall be responsible, at its expense, for the repair or restoration of any
damage or other disturbance to the Soccer Stadium or Exhibition Place as a result
of the construction and installation of the grass field.
(b) Future Maintenance: Toronto FC shall reimburse the Soccer Stadium (i.e the Owner as
represented by its Manager) for the “Incremental Maintenance Costs” (defined as the difference
between the annual cost of $86,000 (amount to be increased annually by the amount of any
increase in CPI) to maintain the current artificial turf and the annual cost to maintain the grass
field). MLSE agrees that it shall ensure that Toronto FC and MLS execute an amendment to the
Team License and User Agreement to this effect.
(c) Guaranteed Payments: MLSE shall guarantee on an annual basis for the remainder of the term of
the Management Agreement and the Lamport Agreement:
i. the payment by MLSE to the Soccer Stadium revenues of $112,000 annually
in compensation for lost “bubble revenue” (amount to be increased annually
by the amount of any increase in CPI);
ii. the payment by MLSE to the Board of $70,000 (amount to be increased
annually by the amount of any increase in CPI) in compensation for lost
“community event” parking revenues.
(d) Lamport Stadium/Lake Shore Collegiate Agreements: MLSE shall contribute a total of $2
million to the City for community sports purposes by entering into the other agreements as
contemplated under this LOI and shall construct the facilities as contemplated therein. Any
breach of those agreements shall be a breach of the Management Agreement, provided that both
the Lamport Stadium and Lake Shore Collegiate Agreements shall contain an appropriate
provision allowing for the periodic review of the operation of the facilities by the parties based on
continued relevance and community need (subject to the requirements of Ontario and Canada).
In the event that agreement cannot be reached with the TDSB for Lakeshore Collegiate, MLSE
shall be required to provide an upgrade to a City Parks facility for community sports purposes as
selected by the City in its sole and unfettered discretion with an equivalent monetary value (being
$2 million less the cost to complete the Lamport Stadium improvements).
(e) Community Use Requirements: The 50% community use requirement in the Management
Agreement shall be replaced with the agreement of the parties that the Soccer Stadium shall be
made available for Community Sports Purposes, as permitted by weather conditions, a minimum
of 12 hours per week during the months of April to October. The transfer in use by the public to
Lamport Stadium shall not affect the rights for use of the Soccer Stadium by the City of Toronto
(14 days), the CNE (18 days), Ontario Soccer Association (6 days), Canadian Soccer Association
(6 days) and other events as set out in the Management Agreement (Olympics, World’s Fair,
etc.). MLSE represents and agrees that it shall, in its operation of the Lamport Stadium at all
times maximize the use of the facility for Community Sports Purposes so as to make available a
level of community use equal to the potential number of community use hours (e.g. 4895 in 2008)
made available through the 50% community use requirement in the Management Agreement.
Subject to its rights to terminate this LOI under section 1 and not proceed with the transactions,
MLSE agrees that it shall assume full responsibility for the performance of any obligation
imposed by Ontario and Canada on the City/Board with respect to community use as a condition
of approving the transactions contemplated in this LOI.
(f) Level of Community Use: MLSE agrees that, in the event that the combined number of
community use hours made available from the use of Lamport Stadium during the Winter Use
Season and the use of the new soccer field at Lakeshore Collegiate (or other selected Parks site)
by the City fall below the potential number of community use hours made available through the
50% community use requirement imposed by Ontario and Canada with respect to the Soccer
Stadium, MLSE shall identify and provide to the City for approval, additional proposals to be
undertaken by MLSE for generating additional community use, all at the sole cost of MLSE.
SECTION B
6. Lamport Stadium Agreement:
(a) Term: The term of the licence agreement shall be equal to the remaining term of the
Management Agreement and Team User and Licence Agreement (i.e. until December 31,
2027).
(b) Municipal Capital Facility: The facility shall be declared by the City to be a municipal
capital facility for City and public use for recreational purposes.
(c) Payments: MLSE shall pay the following on an annual basis:
i. Guaranteed annual capital reserve contribution of $50,000 (increased annually by
the amount of any increase in CPI) to the City to be used solely for capital repairs
to the bubble and the field;
ii. Percentage Rent to the City equal to fifty percent (50%) of “Excess Revenues”
(defined as the gross revenues, less operating costs, from the Lamport bubble
operation, including the guaranteed payments to be made by MLSE under section
(i) above and under the Soccer Stadium Agreement (see sections 5(c)(i) and
5(c)(ii)), and
iii. Nominal base rent to the City of $2.00.
(d) Construction: MLSE shall, at its sole expense (including any cost overruns and
environmental remediation), relocate the winter bubble from the Soccer Stadium and
install it at Lamport Stadium (including construction of the required concrete ringbeam)
and upgrade the field so as to commence operation by November 27, 2009. The scope of
the required construction work shall include at a minimum those items listed in Schedule
“A” to this LOI. Construction shall be undertaken in accordance with:
i. the design, plans and specifications as approved by City
ii. a construction schedule to be approved by the City; and
iii. the following general terms:
1. MLSE shall, prior to commencing construction, obtain all necessary
permits and approvals at its sole expense.
2. Representatives and consultants (if any) of the City shall be entitled to
regular periodic updates and reviews from MLSE as to
material/significant matters during the pre-construction and construction
process with reasonable access to the site and to all relevant plans,
drawings, development documentation and other relevant materials. The
City shall promptly identify any concerns arising as a result of such
updates and reviews.
3. MLSE shall work closely with the City and obtain the approval of the
City and its consultants on an ongoing basis, through finalization of the
construction schedule, project budget, working drawings, tender
packages and contract awards and the carrying out of construction.
4. MLSE shall retain a general contractor through an arm's length bidding
process consistent with fair industry practice.
5. The construction work shall be done in compliance with the City’s Fair
Wage policy and all union and trade association agreements applicable to
the Licensed Property, including the agreements contained in Schedule
“C”.
6. MLSE shall retain the engineer, architect and/or any other necessary
design or construction consultants. MLSE shall keep the City fully
informed as to such process.
7. MLSE shall comply with the holdback provisions of the Construction
Lien Act and shall forthwith cause any such liens to be removed. MLSE
shall indemnify the City against any and all claims, loss, costs and
expenses as a result of any lien or claims for lien.
8. MLSE shall ensure that performance bonds, labour and materials bonds
and construction 2. Representatives and consultants (if any) of the City shall be entitled to
regular periodic updates and reviews from MLSE as to
material/significant matters during the pre-construction and construction
process with reasonable access to the site and to all relevant plans,
drawings, development documentation and other relevant materials. The
City shall promptly identify any concerns arising as a result of such
updates and reviews.
3. MLSE shall work closely with the City and obtain the approval of the
City and its consultants on an ongoing basis, through finalization of the
construction schedule, project budget, working drawings, tender
packages and contract awards and the carrying out of construction.
4. MLSE shall retain a general contractor through an arm's length bidding
process consistent with fair industry practice.
5. The construction work shall be done in compliance with the City’s Fair
Wage policy and all union and trade association agreements applicable to
the Licensed Property, including the agreements contained in Schedule
“C”.
6. MLSE shall retain the engineer, architect and/or any other necessary
design or construction consultants. MLSE shall keep the City fully
informed as to such process.
7. MLSE shall comply with the holdback provisions of the Construction
Lien Act and shall forthwith cause any such liens to be removed. MLSE
shall indemnify the City against any and all claims, loss, costs and
expenses as a result of any lien or claims for lien.
8. MLSE shall ensure that performance bonds, labour and materials bonds
and construction period insurance have been provided or arranged to then
satisfaction of the City’s Manager of Insurance and Risk Management.
9. MLSE shall make commercially reasonable best efforts to ensure that
substantial completion in accordance with the substantial performance
requirements of the Construction Lien Act occurs in time to allow the
public use of the winter bubble and field to commence by November 27,
2009.
10. MLSE shall ensure that all principal construction and consulting
agreements entered into by MLSE shall permit the City to assume
MLSE's position if the Lamport Stadium Agreement is terminated
(e) Operation of Facility: MLSE shall be granted the right during the Term to operate the
winter bubble, playing field and associated facilities at Lamport Stadium as shown on
Schedule “B” to this LOI (the “Licensed Property”) on an annual basis during the period
from November 1 to April 30 of each winter season (the “Winter Use Period”). The
terms of such use shall be negotiated between the City and MLSE and contained in a long
form agreement, and shall include the following:
i. Permitted Use: MLSE shall use the Licensed Property solely for the purposes
of permitting use by the City and the public for non-professional recreational
multi-sport activities, which would include use by the Ontario Soccer
Association, Canadian Soccer Association, community sports recreation
associations or clubs, City Parks programs, and the Olympics or Pan-
American Games (“Community Sports Purposes”) during the Winter Use
Period. MLSE represents and agrees that it shall, in its operation of the
Licensed Property at all times maximize the use of the facility for
Community Sports Purposes as required under the Soccer Stadium
Agreement (see section 5(e)).
ii. Deployment of Bubble: The winter bubble shall be deployed in each Winter
Use Period no later than November 1 and taken down no earlier than April
30.
iii. Summer Access: MLSE may, on reasonable notice to the City, have access
to the Licensed premises other than during the Winter Use period for the
purposes of inspecting and/or preparing the premises for use during the
Winter Use Period.
iv. Operating Costs: MLSE shall, except as otherwise provided, be solely
responsible for any incremental operating costs at Lamport Stadium
associated with the deployment, operation and take down and storage of the
bubble during the Winter Use Period. These costs shall, without limiting the
generality hereof, include:
1. a contribution of operating funding to address normal maintenance
and operational costs of the bathrooms, change rooms and areas
required for access to the bubble; and
2. the payment of increased utility costs, the repair of damage to the
Licensed Property during the Winter Use Period, winter maintenance
costs for the removal of snow and ice from the bubble and
surrounding area and increased security costs as a result of the
presence of the bubble.
v. Taxes: MLSE shall be responsible for any taxes, including property taxes,
payable as a result of the use and occupancy of the property by MLSE.
vi. Fees: MLSE shall have the right to establish fees for the use of the Licensed
Property during the Winter Use Period, subject to the approval of the City,
acting reasonably, and the condition that the amount of such fees shall not
exceed the hourly rental rates for the use of playing fields of similar quality
within the Greater Toronto Area (defined as the area comprised of the City of
Toronto and Regions of Durham, Peel and York).
vii. Operational Requirements: MLSE’s right to use of the Licensed Property
during the Winter Use Period shall be subject to the following requirements:
1. The provision of an annual operating budget no later than July 31st
for the upcoming year commencing January 1st for the information of
the City along with business plan supporting that budget;
2. The annual maintenance work to put up and take down the bubble
shall be done by MLSE at its expense;
3. Bubble/Field Capital Reserve: The City will cause a segregated
interest bearing capital reserve account to be established to fund
capital expenditures (i.e. as defined by GAAP) for the bubble and the
field, and the City and MLSE shall contribute a total of $50,000 per
year to fund capital expenditures in respect of the bubble and field as
contemplated in the Annual Capital Plan. All capital repairs shall be
identified, approved and performed by the City, in its sole discretion.
(f) Records: MLSE shall keep full and accurate records relating to all aspects of the
management and operation of the Licensed Property in accordance with Generally
Accepted Accounting Principles, consistently applied, as contained in the Canadian
Institute of Chartered Accountants Handbook. MLSE shall keep and preserve all records,
including rental agreements, purchase orders, invoices and other evidence of revenues
and expenses. MLSE shall give the City‘s authorized representatives access to and the
right to review all books and records upon reasonable prior notice.
(g) Lakeshore Collegiate Agreement: The City and MLSE shall enter into an agreement with
TDSB for the construction of a new artificial soccer field at Lakeshore Collegiate (or
upgrade a selected Parks site) on the terms as discussed in section 7 below.
(h) Level of Community Use: MLSE agrees that, in the event that the combined number of
community use hours made available from the use of Lamport Stadium during the Winter
Use Season and the use of the new soccer field at Lakeshore Collegiate (or other selected
Parks site) by the City falls below the potential number of community use hours (e.g.
4895 in 2008) made available through the 50% of community use requirement for the
Soccer Stadium pursuant to the Management Agreement, MLSE shall identify and
provide the City with additional proposals for generating additional community use, all at
the sole cost of MLSE.
(i) Naming Rights: The rights granted to MLSE under the Agreement shall not include the
right to sell the naming rights for the Licensed Property.
(j) Damage and Destruction: In the event that the Licensed Property is damaged or
destroyed to the extent that there is a material adverse effect on the operation of the
Licensed Property (“Major Destruction”), then either party may elect to terminate this
Agreement, and the rights and obligations of the parties under the Agreement shall be at
an end.
(k) Other Commercial Terms: The Agreement shall contain such other terms as may be
agreed by the parties and are satisfactory to the General Manager of Parks, Forestry and
Recreation,, the Deputy City Manager & Chief Financial Officer and the City Solicitor,
which shall include the following:
i. MLSE shall be responsible for obtaining and maintaining the following
insurance in respect of the Licensed Property:
- comprehensive general liability;
- property insurance in full replacement value of all property owned
by MLSE or for which it is legally liable, including inventory and
stock, furnishings and chattels located within the Licensed Property;
- crime insurance;
- owned and non-owned automobile liability; and
- professional liability insurance,
all in such form (e.g. inclusion of clauses re: additional insureds, cross
liability/severability of interest, waiver of subrogation, notice of cancellation
etc.) and amount as may be required by the City’s Insurance and Risk
Management Group.
ii. MLSE and the City shall agree to mutually indemnify each other for their
breach, negligence and willful misconduct in respect of the Licensed
Property.
iii. No assignment by MLSE without the prior written consent of the City, not to
be unreasonably withheld, it being agreed that it shall be reasonable for the
City/Board to withhold such consent if MLSE cannot demonstrate that the
proposed assignee has sufficient qualifications or creditworthiness to perform
the obligations of MLSE pursuant to the Agreement. If the City provides its
consent to an assignment of the Agreement, MLSE shall remain bound by
such obligations. For greater certainty, MLSE shall not be permitted to
contract out the performance of its obligations under the Agreement without
the prior written consent of the City, not to be unreasonably withheld.
iv. Customary events of default, including and remedies, including termination.
v. Basic corporate representations and warranties from each of the City/Board
and MLSE only.
SECTION C
7. Lakeshore Collegiate Agreement:
The City and MLSE shall enter into an agreement for the construction of a new artificial
soccer field at Lakeshore Collegiate by MLSE or, in the event that TDSB approval is not
received on or before October 1, 2009, requiring MLSE to provide an upgrade to a City Parks
facility for community sports purposes as selected by the City in its sole and unfettered
discretion with an equivalent monetary value (being $2 million less the cost to complete the
Lamport Stadium improvements), as follows:
(a) Subject to the receipt of approval by the TDSB, the City and MLSE shall enter into
an agreement with TDSB for the construction of a new artificial soccer field at
Lakeshore Collegiate by MLSE, including the following terms:
i. Construction: MLSE shall, at its sole expense, shall construct the new
soccer field in accordance with the description attached as Schedule “D”
to this LOI and including terms satisfactory to the TBSB and the City as
required to address the same issues as set out in section 6(c) above.
MLSE shall complete construction of the new soccer field by June 1,
2010.
ii. Term: The term of this Agreement shall be equal to the term of the
Lamport Stadium Agreement.
iii. Exclusive Use: The City shall have exclusive right to use the soccer
field for Community Sports Purposes (as defined in the Lamport
Agreement) during the months of July and August and receive all
revenue generated from the use of the soccer field during the months of
July and August (the “Community Use Funds” as defined above).
iv. Costs: While the City shall be responsible for the operating costs
(defined generally as the costs of promoting, operating and managing,
including repairs or maintenance which constitute operating costs in
accordance with GAAP) for the soccer field during the months of July
and August, it shall not be responsible for any capital costs (defined
generally as repairs, maintenance, additions, alterations, renovations,
restorations, replacements and improvements which are capital in nature
according to GAAP or are intended primarily to increase the life of an
item) in respect of the soccer field.
v. Other Commercial Terms: The Agreement shall contain such other
terms as may be agreed by the parties and are satisfactory to the General
Manager of Parks, Forestry and Recreation,, the Deputy City Manager &
Chief Financial Officer and the City Solicitor.
(b) In the event that TDSB approval for the Lakeshore Collegiate site is not received on
or before October 1, 2009, MLSE shall be required to provide an upgrade to a City
Parks facility for community sports purposes as selected by the City in its sole and
unfettered discretion with an equivalent monetary value (being $2 million less the
cost to complete the Lamport Stadium improvements) on terms as required to address
the construction issues as set out in section 6(c) above and other commercial terms
satisfactory to the General Manager of Parks, Forestry and Recreation, the Deputy
City Manager & Chief Financial Officer and the City Solicitor.
SECTION D
8. Contribution Agreement Amendments
The Contribution Agreement shall be amended as approved by the City, Ontario and Canada to
reflect the transactions contemplated in this LOI, including:
(a) Amending the requirement for Community Sports Purposes for the Soccer Stadium to
reflect the reduced availability of the Soccer Stadium for Community Sports Purposes
and the increased community use at Lamport Stadium and Lakeshore Collegiate (or other
selected Parks site); and
(b) Acknowledging the removal and relocation of the winter bubble from the Soccer Stadium
and the replacement of the artificial turf with a highest quality grass field.
(c) Other Commercial Terms: The Agreement shall contain such other terms as may be
agreed by the parties and are satisfactory to the Chief Executive Officer of Exhibition
Place, General Manager of Parks, Forestry and Recreation, the Deputy City Manager &
Chief Financial Officer and the City Solicitor.
Terms Specific to this LOI
Exclusivity
From the date this letter is approved by The Board of Governors of Exhibition Place and City Council and
until formal documentation has been executed by the parties or negotiations have been discontinued, the
parties agree not to take any action or engage in any negotiations with unrelated third parties either for the
construction, management or use of Allan Lamport Stadium or similar facilities within the Greater
Toronto Area.
Public Disclosure
Once this letter has been delivered, the Board/City shall be permitted to publicly disclose the terms and
conditions outlined in this letter agreement in its sole and absolute discretion.
Indemnity
MLSE shall indemnify and hold harmless the Board, the City of Toronto, and their respective elected
officials, directors, officers, agents and employees from and against any and all losses, claims, liability,
damage, action or expense (including without limitation, costs and legal fees) arising out of or relating in
any way to the negligence or wilful misconduct of MLSE in the entering into or performance or purported
performance of their obligations under this LOI or any negligence or wilful misconduct of any person for
whom they are in law responsible. The City and Board shall indemnify and hold harmless MLSE, and its
directors, officers, agents and employees from and against any and all losses, claims, liability, damage,
action or expense (including without limitation, costs and legal fees) arising out of or relating in any way
to the negligence or wilful misconduct of the City or the Board in the entering into or performance or
purported performance of their obligations under this LOI or any negligence or wilful misconduct of any
person for whom they are in law responsible.
Assignment
MLSE may not assign, convey or transfer in any way its rights under this LOI without the prior written
consent of the Board and the City, which may be arbitrarily and unreasonably withheld.
Termination
If any party fails to provide information or perform any other obligations required pursuant to this LOI
within the time periods stipulated, the other party may give notice to the non-performing party of said
failure to perform and, if the non-performing party fails to rectify the situation within ten (10) days
following receipt of said notice, the party giving notice may terminate this LOI.
In each and every such instance, if a party exercises its right to terminate this LOI, the other party hereby
acknowledges and agrees that it shall have no claim against the terminating party for any costs and
expenses incurred by it prior to the date of termination.
Timetable
The terms and conditions set out in this LOI comprise the Key Business Terms of the proposed
agreements between the Board, City and MLSE. The parties acknowledge that they have developed the
following timetable for completing working the matters required prior to commencement of construction
of the Project.
(a) Board Approval of LOI September 11, 2009
(b) City Council Approval of LOI September 30, 2009
(c) TDSB Approval October1 2009
(c) Provincial and Federal Government Approval October 1, 2009
(h) Negotiation and Finalization of Agreements October 1, 2009
(j) Construction of Ringbeam and Bubble at Allan
Lamport Stadium
October 1, 2009 to November 27,
2009
(k) Grass Field Construction at Soccer Stadium After last TFC Game in 2009 to
May 1, 2010
(l) Construction of Artificial Field at Lakeshore
Collegiate (Or upgrade at other selected Parks site)
October 1, 2009 to May 1, 2010
This timetable is subject to further discussions between the parties and the TDSB and the Provincial and
Federal Governments. The parties acknowledge that the desire to have all facilities available for use as
contemplated herein may require that these projects proceed on the basis of this LOI or other interim
arrangements between the parties.
Good Faith Negotiations
Upon execution of this LOI by the parties, the parties agree to work diligently, co-operatively, and in
good faith with one another toward the shared goal of negotiating, finalizing and executing binding
agreements along the lines set out in this LOI.
Force Majeure
Each of the parties shall be excused from the performance of any obligation hereunder to the extent that
such obligation is hindered or prevented by any strike, boycott, lockout or other labour dispute, any act of
God, any riot, civil disturbance, act of terrorism or any act of war or of the public enemy; any fire or theft,
any present or future governmental law, ordinance, rule or regulation, or any other cause or contingency
beyond the parties' control (other than a lack of financial resources).
Representations
The parties all represent and warrant of the date hereof as follows and acknowledge that the other parties
are relying on such representations and warranties in connection with the transactions contemplated by
this LOI:
(a) Each party is a corporation duly incorporated, organized and subsisting under the laws of
the Province of Ontario.;
(b) They have the power, authority and right to: (i) enter into and deliver this LOI; and (ii)
perform their obligations under and as contemplated to be performed pursuant to this
LOI;
(c) To the extent that this LOI is binding on the parties as set out herein, it constitutes a valid
and legally binding obligation of the parties, enforceable against them in accordance with
its terms subject to applicable bankruptcy, insolvency, reorganization and other laws of
general application limiting the enforcement of creditors' rights generally and to the fact
that specific performance is an equitable remedy available only in the discretion of the
court; and
(d) The entering into and the delivery of this LOI and the performance of the obligations of
the parties hereunder will not result in the violation of:
(i) any of the provisions of the constating documents or by-laws of any party; or
(ii) any agreement or other instrument to which they are a party or by which they are
bound.
This letter may be executed in any number of counterparts, each of which shall be deemed to be an
original and all of which taken together shall be deemed to constitute one and the same
If you are interested in pursuing the transactions contemplated by this letter on the basis outlined herein,
please acknowledge by executing one copy of the letter where indicated and returning same to the
undersigned as soon as possible.
Yours truly,
MAPLE LEAF SPORTS & ENTERTAINMENT LTD.
Per:
Richard A. Peddie
To: The Board of Governors of Exhibition Place
From: Dianne Young, CEO, Exhibition Place
Brenda Patterson, General Manager, Parks, Forestry & Recreation
Subject: Upgrades to BMO Field at Exhibition Place and Allan Lamport Stadium
Summary:
This report provides the principal terms and conditions of agreements to be entered into with
Maple Leaf Sports & Entertainment Ltd. (MLSE), the City and the Board of Governors of
Exhibition Place (Board) and agreements with MLSE, the City and the Toronto District School
Board (TDSB) with respect to:
(a) Replacement (by and at the sole cost of MLSE) of the current Field Turf field at BMO Field
with a natural grass field at an estimated cost of $3.5M;
(b) Commitment of $2.0M by MLSE for community sports facilities in the form of:
(i) the construction (by and at the sole cost of MLSE) of the necessary installations at
Allan Lamport Stadium (Lamport) to allow for the relocation and erection of a
winter bubble (the bubble presently used at BMO Field) at a cost of approximately
$1.2M with a licence to MLSE to use that part of Lamport as determined by
Parks, Forestry and Recreation to operate the winter bubble community soccer
operations only for the period of November 1st to April 30th in each year of the
licence term which term will be co-terminus with the management agreement term
for BMO field which expires on December 31, 2027; and
(ii) a commitment of approximately $0.8M for the construction/installation of a Field
Turf field at Lakeshore Collegiate Institute in Etobicoke (subject to an agreement
between the City and the TDSB for use of such field for July and August of each
year) or upgrades to such other sports facility in Ward 6 as determined by the
General Manager, Parks, Forestry and Recreation Department in consultation with
the Ward 6 Councillor.
All costs of construction (totaling $5.5M) of the grass field at BMO Field; the winter bubble at
Lamport; and the Field Turf field at Lakeshore Collegiate Institute will be solely at the cost of
MLSE. In addition, MLSE will guarantee that there will be no lost income whatsoever to the
BMO Field/Exhibition Place operations because of the conversion of BMO Field from field turf
to natural grass which guarantee has a minimum value of $0.182M each year.
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Furthermore, at a minimum, MLSE is guaranteeing that MLSE will pay the City an amount of
$50,000 annually (escalated by CPI annually) to a Lamport Capital Reserve Fund to be set up by
the City for replacement of the bubble and field turf at Lamport. In addition, the City will share
with MLSE 50% of the net profits from Lamport which are estimated to be approximately
$22,000 annually. Finally, the Lakeshore Collegiate Institute site (or equivalent outdoor sport
facility) has the potential of earning $18,000 annually in rental revenues for the City based on the
number of hours proposed to be booked in July and August each year as set out in Appendix “B”
to this report.
From a community sports use perspective, the proposals noted above increase the potential
community use by over one thousand (1,000) hours (with Lamport and BMO Field) as shown in
Appendix “B” and by 2,849 hours if one adds the annual use of Lakeshore Collegiate Institute
Field (or equivalent facility). In addition to this community use at BMO Field on natural grass,
there will still be a right to use BMO Field by the City for 14 days, Ontario Soccer Association
(OSA) for 6 days, Canadian Soccer Association (CSA) for 6 days, and the annual CNE for 18
days. The conversion of BMO Field to natural grass will be seen as a very positive direction by
both the CSA and OSA for attracting major international teams to play in Toronto and also to
attract premier FIFA competitions as stated by these organizations in letters attached as
Appendices “C” and “D”.
Recommendation(s):
It is recommended that:
1. The Letter of Intent (LOI) between the Board, the City and MLSE attached as
Appendix “A” be approved:
(a) by the Board, subject to approval of City Council, as such LOI amends the
Management Agreement (between MLSE, the City and the Board with respect to
BMO Field) and Team Licence Agreement (between MLSE, the City and the
Board with respect to BMO Field) substantially on the terms and conditions
outlined in Sections A and D of the LOI and such other terms and conditions as
required by the Deputy City Manager & Chief Financial Officer, the CEO of
Exhibition Place and the City Solicitor;
(b) by City Council, as such LOI addresses the upgrades and uses of Lamport and a
licence agreement for Lamport Stadium to MLSE substantially on the terms and
conditions outlined in Sections B and D of the LOI and such other terms and
conditions as required by the Deputy City Manager & Chief Financial Officer,
the General Manager of Parks, Forestry & Recreation and the City Solicitor;
and
(c) by City Council, as such LOI addresses the upgrades and uses of Lakeshore
Collegiate (or such other City or TDSB property located in Ward 6) substantially
on the terms and conditions outlined in Sections C and D of the LOI and such
other terms and conditions as required by the Deputy City Manager & Chief
Financial Officer, the General Manager of Parks, Forestry & Recreation and the
City Solicitor;
3
2. City Council approve of the amendments to the Contribution Agreement between the
City, the Province of Ontario and Government of Canada substantially on the terms
and conditions outlined in paragraph 8 of the LOI between the Board, the City and
MLSE attached as Appendix “A” to this report and such other terms and conditions
as required by the Deputy City Manager & Chief Financial Officer and the City
Solicitor;
3. City Council approve of establishing an obligatory interest bearing reserve fund,
called the “Allan Lamport Stadium Reserve Fund” to provide a source of funding for
capital improvements for Lamport and the $50,000 annual payment from MLSE to
the City be paid into this Reserve Fund;
4. The approval of the Board and City Council be expressly subject to receipt of
approval from the TDSB (if required), the Province of Ontario and the Government
of Canada and in the event that these preconditions are not satisfied and are not
waived, the parties shall each have a right to terminate the LOI in which event, the
parties shall remain responsible for their own costs incurred to the date of
termination; and,
5. That City Council declare the proposed upgraded Lamport Stadium to be a
municipal capital facility for the purposes of the municipality and public use pursuant
to section 252 of the City of Toronto Act, 2006, and pass a by-law to authorize the
entering into of an agreement for the provision of the facility, and request the City
Clerk to give notice of the municipal capital facility by-law as required under the City
of Toronto Act, 2006.
Financial Impact:
The recommendations in this report will result in a capital investment of $5.5M solely by MLSE
in the Exhibition Place site, Lamport Stadium and Lakeshore (Etobicoke) Collegiate Sports Field
(or other sport facility within Ward 6) for upgrading all three venues in the specific amounts as
noted above in this report.
On the basis of the financial proformas provided by MLSE, the upgrades to be installed will
result in minimum additional income of $50,000 for the City to be paid into the Lamport Capital
Reserve Fund and additionally, there is the potential that the City (Parks, Forestry and Recreation
Department) will earn approximately $22,000 from its 50% share of net profits from Lamport
community use. In addition, the City Parks, Forestry and Recreation Department has the
potential of earning $18,000 from summer rentals of a upgraded field either at Lakeshore
Collegiate or another sports facility within Ward 6.
MLSE has guaranteed that the proposed amendments in the Board agreements will have no
negative financial impact on Exhibition Place revenues which guarantee has a value of $182,000
annually. The change to natural grass at BMO Field has the potential of positive revenues to
Exhibition Place from BMO Field operations of 50% of $75,000 if just one major international
soccer event is booked at BMO Field each year.
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Decision History:
At its meeting of October 2005, the Board approved of entering into a project (construction)
agreement, a management agreement and facility usage agreements between the Board, the City
and MLSE.
At its meeting of October 26, 27, 28 and 31, 2005, City Council approved of Clause No. 36 of
Report No. 9 of the Policy & Finance Committee which basically adopted the report and
recommendations of the Board. In accordance with the Council authority, the Board, City, MLSE
(as manager) and MLSE (as owner of Toronto FC) entered into a Management Agreement and
Team Licence Agreement with respect to BMO Field.
Comments:
The construction of the BMO Field soccer stadium which totaled $62.8M was dependent on
funding by the various levels of government (Federal $27.2M; Provincial $7.8M; Toronto
$9.8M; MLSE $18.0M). Justification for the provision of government funding in 2005/6 was the
commitment by FIFA and the Canadian Soccer Association (CSA) to hold the FIFA Men’s
Under 20 World Youth Championship in Canada in 2007 with Toronto being the host city where
the final match was played. An economic impact analysis of the FIFA event showed total direct
spending impact of this Championship in six cities in Canada of $12.3M and indirect and
induced spending of $5.4M with the economic impact for Toronto being $1.5M and $2.1M
respectively. This FIFA Championship was considered by all participants to be a resounding
success.
The positive experience (both financially and entertainment value) of BMO Field soccer stadium
post-FIFA Championship has been far above any projected expectations. Home to the Toronto
FC, the stadium is sold out (20,000 seats) for each of the 20 home/friendly games. In addition,
since its construction in 2006/07, the stadium was the site for the 2007 Genesis World Tour, the
2008 Major League All-Star Game and in 2009 hosted an exhibition game between the Toronto
FC and Real Madrid and then during the 2009 CNE, hosted an exhibition game between
Portugal’s Benefica and Scotland’s Celtics. The economic impact of all these major events for
the City of Toronto would be in the range of $10.0M to $15.0M. In addition to these economic
impacts, since opening, the stadium has contributed a total of $2.1M (2007 – 2009) to Exhibition
Place revenues in the form of a share of net profit from BMO Field and parking revenues.
The other major impact of BMO Field has been its contribution to community sports for the City
and its residents which again was a major factor for the various levels of governments that
contributed to the funding of this soccer stadium with its winter bubble. BMO Field has been
very successful in attracting community soccer teams and as shown on Appendix “B”. In 2008
the community used this facility a total of 4,895 hours and in addition to this use, the following
organizations have rights to use the field:
•Canada Soccer Association for 6 days
5
•Ontario Soccer Association for 6 days
•City of Toronto for recreation use for 14 days
•Canadian National Exhibition (CNE) for 18 days
•City/Board can use the stadium for World’s Fair and Olympics or other international
events; for example, BMO Field is part of the City’s 2014 Pan Am Bid
Lamport Stadium
Parks, Forestry and Recreation Department operates and programs Lamport Stadium for a variety
of activities including soccer, field hockey, lacrosse, football, baseball and several significant
community events from May 1st to October 31st each year. The stadium has lights, a public
address system, a scoreboard, parking and ticket-taking facilities. A new artificial Field Turf
surface was added in 2007 and, with the addition of a temporary solid surface, Lamport is
capable of hosting many non-traditional events.
The prospect of a seasonal dome over the stadium surface will allow for year-round use of this
downtown facility and expand the recreational opportunities throughout the year. This will
greatly assist in meeting the demand for indoor soccer during the winter season.
With respect to the future replacement of the Field Turf and the Bubble at Lamport, it is
estimated that the existing Field Turf (installed in 2008 at Lamport) will have to be replaced in
2016 at a cost of $500,000 and the bubble (purchased in 2007 for BMO Field) will have to be
replaced in 2026 at approximately $800,000. Accordingly, a guaranteed contribution of $50,000
annually by MLSE to the Lamport Capital Reserve Fund should result in sufficient funds to pay
for 50% of these replacements as they are required.
Risk of the Proposal
The risk to the Board/City of this proposal is no greater than the risk the Board/City has under the
present agreements with MLSE relating to BMO Field. While it has not happened in the first
three years of operations, if, for whatever reason, the MLSE projections are not achieved, then
50% of the operating deficits and any shortfalls in the capital funding must be funded by the
Board/City. Pursuant to the existing agreements between the City/Board and MLSE, MLSE has
provided a one-time non-revolving fund of $250,000 to address operating shortfalls in the first
instance. None of these funds have been used to date. However, if the $250,000 fund is depleted,
remaining operating shortfalls are to be funded equally by MLSE and the Board.
This risk profile has not been changed by this new proposal however, MLSE has provided within
the LOI additional annual guarantees which total $0.331M annually and are as follows:
•Guarantee payment to the City as part of the Lamport bubble operations lease $50,000
which the City will set aside in a Lamport Capital Reserve Fund
•Payment to the City of 50% of any net revenues from Lamport estimated to be in the
range of $22,000
6
•Guarantee payment to BMO Field of lost community use income of $112,000 annually
(increased by CPI annually)
•Guarantee payment to Exhibition Place of lost parking income of $70,000 annually
(increased by CPI annually)
•Guarantee payment by Toronto FC to BMO Field of all added maintenance costs resulting
from having natural grass rather than field turf. Toronto FC will pay BMO Field the
difference between the cost of maintaining the natural grass in any year less the 2008 cost
of maintaining the field turf (as this 2008 field turf cost is increased by CPI annually)
Municipal Capital Facility
Given the public-private nature of the proposed project, which will result in the major renovation
to the field costing approximately $5.5M all of which is to be paid by MLSE to build the
necessary infrastructure for the installation of a winter bubble on the field and the long term
licence agreement between the City and MLSE from November 1st to April 30th each year to
operate the bubble for community purposes, the City Solicitor has advised that it is appropriate
that City Council declare the Lamport facility as a municipal capital facility and pass a by-law to
authorize an agreement for the licensing of the facility and provision of the winter bubble to the
Parks, Forestry and Recreation Department of the City of Toronto.
Contact:
Dianne Young, CEO
Tel: 416-263-3611
Fax: 416-263-3640
Email: dyoung@explace.on.ca
Brenda Patterson, General Manager
Parks, Forestry & Recreation
City of Toronto
Tel: 416-392-8182
Fax: 416-392-8565
Email: bpatter2@toronto.ca
Submitted by:
___________________ _____________________________
Dianne Young, CEO Brenda Patterson, General Manager
Exhibition Place Parks, Forestry & Recreation
Appendix “A”
September 9, 2009
Delivered
The Board of Governors of Exhibition Place
Queen Elizabeth Building
Exhibition Place
Toronto, ON M6K 3C6
Attention: Dianne Young
Chief Executive Officer
City of Toronto
Toronto City Hall, 2nd Floor
100 Queen St. West
Toronto ON M5H 2N2
Attention: Mr. Joe Pennachetti
City Manager
Dear Sir and Madam:
Re: Proposal for Relocation of Bubble to Lamport Stadium/Implementation of Natural Grass Field at
Soccer Stadium at Exhibition Place
This Letter of Intent (“LOI”) will summarize a potential framework for agreement by The Board of
Governors of Exhibition Place (the “Board”) and the City of Toronto (the “City”) to the proposal by
Maple Leaf Sports & Entertainment Ltd. ("MLSE") to undertake, at its sole cost, the:
(a) Replacement of the current artificial turf field at the Soccer Stadium (BMO Field) at
Exhibition Place (the “Soccer Stadium”) with a highest quality level grass field;
(b) Relocation of the current winter bubble at the Soccer Stadium to Allan Lamport Stadium
(“Lamport Stadium”); and
(c) Rebuilding of a proper artificial turf field at Lakeshore Collegiate Institute in Etobicoke by
agreement with the Toronto District School Board (“TDSB”) OR, in the event that an
agreement cannot be finalized with respect to Lakeshore Collegiate, upgrading of a City
Parks facility for community sports purposes as selected by the City in its sole and unfettered
discretion with an equivalent monetary value (being $2 million less the cost to complete the
Lamport Stadium improvements).
1. Pre-Conditions:
The parties acknowledge and agree that any agreement to this proposal by the Board, City and MLSE will
be subject to the receipt of approvals from the Board, City Council, the TDSB, the Province of Ontario
(“Ontario”) and the Government of Canada (“Canada”). MLSE agrees that it shall be responsible for
obtaining and securing the approval of the TDSB. The City and the Board agree that they shall be
responsible for obtaining the approval of Ontario and Canada. The approvals from Ontario, Canada and
the TDSB shall be satisfactory to MLSE, the Board and the City on the terms as contemplated in this LOI.
In the event that the terms of any approval have a material adverse impact on the transactions as
contemplated in this LOI (including the rights and obligations of the parties) as determined by a party in
its sole and unfettered discretion, any affected party may terminate this LOI and the parties shall have no
liability to each other as a result of a failure to obtain acceptable approvals. The parties agree that, in the
event that these approvals cannot be obtained by November 27, 2009 that MLSE shall proceed to deploy
the winter bubble at the Soccer Stadium, and in the event that these approvals are still not received by
January 1, 2010, that MLSE shall proceed to take whatever action is required in accordance with the
Soccer Stadium Management Agreement to ensure that the Soccer Stadium is ready for use in Spring
2010. Despite the foregoing, the parties acknowledge and agree that in the event that the approval of the
TDSB cannot be obtained on or before October 1, 2009 for a facility at Lakeshore Collegiate, then MLSE
shall not be entitled to terminate this LOI but shall be required to provide an upgrade to a City Parks
facility for community sports purposes as selected by the City in its sole and unfettered discretion with an
equivalent monetary value (being $2 million less the cost to complete the Lamport Stadium
improvements).
2. Timing: The parties are entering into this arrangement on the understanding that all construction
shall be completed by MLSE, at its sole cost (including any cost overruns or environmental remediation)
so as to allow the new facilities at the Soccer Stadium, Allan Lamport Stadium and Lakeshore Collegiate
to be available for use by the dates as set out below, subject to such reasonable and unavoidable delays in
construction as may occur. MLSE agrees that, despite any delay in the completion of construction, it
shall remain responsible for completing these new facilities and, in the interim, satisfying community use
requirements and all guaranteed payments. Despite the foregoing, MLSE also agrees that it shall, as
indicated in section 4(b) below, immediately upon receipt of all required approvals commence
excavations at Lamport Stadium in order to allow the parties to determine any environmental remediation
requirements and decide whether to proceed with the contemplated arrangements.
3. Agreement Framework: The parties acknowledge and agree that implementation of the terms
of this LOI will require the negotiation and finalization of the following long form agreements on terms
satisfactory to the parties:
(a) Agreement to amend the current Management Agreement (January 1, 2007) between the
Board, City and MLSE for the Soccer Stadium to reflect the terms as set out in this LOI;
(b) Agreement to amend the current Team Licence and User Agreement (January 1, 2007)
between the Board, MLSE and MLS Canada U.L.C. to reflect the terms as set out in this
LOI
(c) License Agreement to allow MLSE to operate the bubble and field at Lamport Stadium
on an annual basis during the winter season for a term to coincide with the term of the
Management Agreement;
(d) Agreement to amend the Contribution Agreement (June, 2006) between the City, Ontario
and Canada to reflect the terms of this LOI; and
(e) Agreement between the City, TDSB and MLSE to permit the construction of the artificial
turf field at Lakeshore Collegiate and provide the City with exclusive use and revenues
from the field during the months of July and August, on the terms as set out in this LOI,
OR an agreement between the City and MLSE requiring MLSE to provide an upgrade to
a City Parks facility for community sports purposes as selected by the City in its sole and
unfettered discretion with an equivalent monetary value (being $2 million less the cost to
complete the Lamport Stadium improvements).
4. Costs/Remediation Costs:
(a) Except as otherwise explicitly set out in this LOI, all costs of construction contemplated under the
terms of this LOI shall be for the sole account of MLSE.
(b) The parties agree that MLSE shall, upon receipt of the approvals required in section 1,
immediately commence excavations as required for the installation of the bubble at Lamport
Stadium. In the event that environmental remediation is required by the Environmental
Protection Act (and associated regulation) (the “Act”) to proceed with the construction of the
bubble at Lamport Stadium or Lakeshore Collegiate (or other selected Parks site) as a result of
preliminary excavations of the work area by MLSE, then MLSE agrees to assume the costs of the
remediation to such areas as required by the Act. In the event that MLSE is unwilling, within
thirty (30) days from the date that it is evident that remediation is required, to assume such costs,
MLSE or the City/Board may immediately terminate this LOI and all agreements contemplated
hereunder. In the event of termination, MLSE shall bear the cost of any work required to restore
the areas so disturbed by MLSE to their previous condition and remediate as required by the Act.
MLSE agrees that it shall then proceed with the deployment of with winter bubble at the Soccer
Stadium in accordance with the Management Agreement for the 2009/2010 season as
contemplated under the Soccer Stadium Agreement.
SECTION A
5. Soccer Stadium Management/Team Licence Agreements
Minimum Grass Field Specifications: The level grass field to be constructed at the Soccer
Stadium will be of the highest quality and shall conform to all CSA, Major League Soccer
("MLS") and Federation Internationale de Football Association ("FIFA") specifications and
requirements (the "Minimum Specifications").
(a) Construction: The construction and installation of the grass field shall be undertaken by MLSE at
an estimated cost of $3.5 million, at its sole expense (including cost overruns and any required
environmental remediation) and completed by May 1, 2010, subject to the following:
i. MLSE shall, prior to commencing construction, obtain all necessary permits and
approvals at its sole expense.
ii. Union and trade association agreements for Exhibition Place shall apply to the
construction work and MLSE shall ensure that all work is done in compliance
with those agreements;
iii. Representatives and consultants (if any) of the Board/City shall be entitled to
regular periodic updates and reviews from MLSE as to material/significant
matters during the pre-construction and construction process with reasonable
access to the site and to all relevant plans, drawings, development documentation
and other relevant materials. The Board/City shall promptly identify any
concerns arising as a result of such updates and reviews.
iv. MLSE shall comply with the holdback provisions of the Construction Lien Act
and shall forthwith cause any such liens to be removed. MLSE shall indemnify
the Board/City against any and all claims, loss, costs and expenses as a result of
any lien or claims for lien.
v. MLSE shall ensure that performance bonds, labour and materials bonds and
construction period insurance have been provided or arranged to the satisfaction
of the City’s Manager of Insurance and Risk Management.
vi. Substantial completion shall be in accordance with the substantial performance
requirements of the Construction Lien Act in time to allow the use of the grass
field to commence by May 1, 2010, (provided that MLSE shall have no liability
to the Board/City for its failure to achieve substantial completion by the date
stipulated herein, to the extent that such failure is directly attributable to the
inability of MLSE to obtain all necessary permits and approvals solely as the
result of unreasonable delays in the processing of such permits or approvals.)
vii. MLSE shall ensure that all third party agreements for the construction and related
services contain the usual events of defaults and remedies, including termination.
viii. MLSE shall ensure that all principal construction and consulting agreements
entered into by MLSE shall permit the Board/City to assume MLSE's position if
the Management Agreement is terminated.
ix. MLSE shall be responsible, at its expense, for the repair or restoration of any
damage or other disturbance to the Soccer Stadium or Exhibition Place as a result
of the construction and installation of the grass field.
(b) Future Maintenance: Toronto FC shall reimburse the Soccer Stadium (i.e the Owner as
represented by its Manager) for the “Incremental Maintenance Costs” (defined as the difference
between the annual cost of $86,000 (amount to be increased annually by the amount of any
increase in CPI) to maintain the current artificial turf and the annual cost to maintain the grass
field). MLSE agrees that it shall ensure that Toronto FC and MLS execute an amendment to the
Team License and User Agreement to this effect.
(c) Guaranteed Payments: MLSE shall guarantee on an annual basis for the remainder of the term of
the Management Agreement and the Lamport Agreement:
i. the payment by MLSE to the Soccer Stadium revenues of $112,000 annually
in compensation for lost “bubble revenue” (amount to be increased annually
by the amount of any increase in CPI);
ii. the payment by MLSE to the Board of $70,000 (amount to be increased
annually by the amount of any increase in CPI) in compensation for lost
“community event” parking revenues.
(d) Lamport Stadium/Lake Shore Collegiate Agreements: MLSE shall contribute a total of $2
million to the City for community sports purposes by entering into the other agreements as
contemplated under this LOI and shall construct the facilities as contemplated therein. Any
breach of those agreements shall be a breach of the Management Agreement, provided that both
the Lamport Stadium and Lake Shore Collegiate Agreements shall contain an appropriate
provision allowing for the periodic review of the operation of the facilities by the parties based on
continued relevance and community need (subject to the requirements of Ontario and Canada).
In the event that agreement cannot be reached with the TDSB for Lakeshore Collegiate, MLSE
shall be required to provide an upgrade to a City Parks facility for community sports purposes as
selected by the City in its sole and unfettered discretion with an equivalent monetary value (being
$2 million less the cost to complete the Lamport Stadium improvements).
(e) Community Use Requirements: The 50% community use requirement in the Management
Agreement shall be replaced with the agreement of the parties that the Soccer Stadium shall be
made available for Community Sports Purposes, as permitted by weather conditions, a minimum
of 12 hours per week during the months of April to October. The transfer in use by the public to
Lamport Stadium shall not affect the rights for use of the Soccer Stadium by the City of Toronto
(14 days), the CNE (18 days), Ontario Soccer Association (6 days), Canadian Soccer Association
(6 days) and other events as set out in the Management Agreement (Olympics, World’s Fair,
etc.). MLSE represents and agrees that it shall, in its operation of the Lamport Stadium at all
times maximize the use of the facility for Community Sports Purposes so as to make available a
level of community use equal to the potential number of community use hours (e.g. 4895 in 2008)
made available through the 50% community use requirement in the Management Agreement.
Subject to its rights to terminate this LOI under section 1 and not proceed with the transactions,
MLSE agrees that it shall assume full responsibility for the performance of any obligation
imposed by Ontario and Canada on the City/Board with respect to community use as a condition
of approving the transactions contemplated in this LOI.
(f) Level of Community Use: MLSE agrees that, in the event that the combined number of
community use hours made available from the use of Lamport Stadium during the Winter Use
Season and the use of the new soccer field at Lakeshore Collegiate (or other selected Parks site)
by the City fall below the potential number of community use hours made available through the
50% community use requirement imposed by Ontario and Canada with respect to the Soccer
Stadium, MLSE shall identify and provide to the City for approval, additional proposals to be
undertaken by MLSE for generating additional community use, all at the sole cost of MLSE.
SECTION B
6. Lamport Stadium Agreement:
(a) Term: The term of the licence agreement shall be equal to the remaining term of the
Management Agreement and Team User and Licence Agreement (i.e. until December 31,
2027).
(b) Municipal Capital Facility: The facility shall be declared by the City to be a municipal
capital facility for City and public use for recreational purposes.
(c) Payments: MLSE shall pay the following on an annual basis:
i. Guaranteed annual capital reserve contribution of $50,000 (increased annually by
the amount of any increase in CPI) to the City to be used solely for capital repairs
to the bubble and the field;
ii. Percentage Rent to the City equal to fifty percent (50%) of “Excess Revenues”
(defined as the gross revenues, less operating costs, from the Lamport bubble
operation, including the guaranteed payments to be made by MLSE under section
(i) above and under the Soccer Stadium Agreement (see sections 5(c)(i) and
5(c)(ii)), and
iii. Nominal base rent to the City of $2.00.
(d) Construction: MLSE shall, at its sole expense (including any cost overruns and
environmental remediation), relocate the winter bubble from the Soccer Stadium and
install it at Lamport Stadium (including construction of the required concrete ringbeam)
and upgrade the field so as to commence operation by November 27, 2009. The scope of
the required construction work shall include at a minimum those items listed in Schedule
“A” to this LOI. Construction shall be undertaken in accordance with:
i. the design, plans and specifications as approved by City
ii. a construction schedule to be approved by the City; and
iii. the following general terms:
1. MLSE shall, prior to commencing construction, obtain all necessary
permits and approvals at its sole expense.
2. Representatives and consultants (if any) of the City shall be entitled to
regular periodic updates and reviews from MLSE as to
material/significant matters during the pre-construction and construction
process with reasonable access to the site and to all relevant plans,
drawings, development documentation and other relevant materials. The
City shall promptly identify any concerns arising as a result of such
updates and reviews.
3. MLSE shall work closely with the City and obtain the approval of the
City and its consultants on an ongoing basis, through finalization of the
construction schedule, project budget, working drawings, tender
packages and contract awards and the carrying out of construction.
4. MLSE shall retain a general contractor through an arm's length bidding
process consistent with fair industry practice.
5. The construction work shall be done in compliance with the City’s Fair
Wage policy and all union and trade association agreements applicable to
the Licensed Property, including the agreements contained in Schedule
“C”.
6. MLSE shall retain the engineer, architect and/or any other necessary
design or construction consultants. MLSE shall keep the City fully
informed as to such process.
7. MLSE shall comply with the holdback provisions of the Construction
Lien Act and shall forthwith cause any such liens to be removed. MLSE
shall indemnify the City against any and all claims, loss, costs and
expenses as a result of any lien or claims for lien.
8. MLSE shall ensure that performance bonds, labour and materials bonds
and construction 2. Representatives and consultants (if any) of the City shall be entitled to
regular periodic updates and reviews from MLSE as to
material/significant matters during the pre-construction and construction
process with reasonable access to the site and to all relevant plans,
drawings, development documentation and other relevant materials. The
City shall promptly identify any concerns arising as a result of such
updates and reviews.
3. MLSE shall work closely with the City and obtain the approval of the
City and its consultants on an ongoing basis, through finalization of the
construction schedule, project budget, working drawings, tender
packages and contract awards and the carrying out of construction.
4. MLSE shall retain a general contractor through an arm's length bidding
process consistent with fair industry practice.
5. The construction work shall be done in compliance with the City’s Fair
Wage policy and all union and trade association agreements applicable to
the Licensed Property, including the agreements contained in Schedule
“C”.
6. MLSE shall retain the engineer, architect and/or any other necessary
design or construction consultants. MLSE shall keep the City fully
informed as to such process.
7. MLSE shall comply with the holdback provisions of the Construction
Lien Act and shall forthwith cause any such liens to be removed. MLSE
shall indemnify the City against any and all claims, loss, costs and
expenses as a result of any lien or claims for lien.
8. MLSE shall ensure that performance bonds, labour and materials bonds
and construction period insurance have been provided or arranged to then
satisfaction of the City’s Manager of Insurance and Risk Management.
9. MLSE shall make commercially reasonable best efforts to ensure that
substantial completion in accordance with the substantial performance
requirements of the Construction Lien Act occurs in time to allow the
public use of the winter bubble and field to commence by November 27,
2009.
10. MLSE shall ensure that all principal construction and consulting
agreements entered into by MLSE shall permit the City to assume
MLSE's position if the Lamport Stadium Agreement is terminated
(e) Operation of Facility: MLSE shall be granted the right during the Term to operate the
winter bubble, playing field and associated facilities at Lamport Stadium as shown on
Schedule “B” to this LOI (the “Licensed Property”) on an annual basis during the period
from November 1 to April 30 of each winter season (the “Winter Use Period”). The
terms of such use shall be negotiated between the City and MLSE and contained in a long
form agreement, and shall include the following:
i. Permitted Use: MLSE shall use the Licensed Property solely for the purposes
of permitting use by the City and the public for non-professional recreational
multi-sport activities, which would include use by the Ontario Soccer
Association, Canadian Soccer Association, community sports recreation
associations or clubs, City Parks programs, and the Olympics or Pan-
American Games (“Community Sports Purposes”) during the Winter Use
Period. MLSE represents and agrees that it shall, in its operation of the
Licensed Property at all times maximize the use of the facility for
Community Sports Purposes as required under the Soccer Stadium
Agreement (see section 5(e)).
ii. Deployment of Bubble: The winter bubble shall be deployed in each Winter
Use Period no later than November 1 and taken down no earlier than April
30.
iii. Summer Access: MLSE may, on reasonable notice to the City, have access
to the Licensed premises other than during the Winter Use period for the
purposes of inspecting and/or preparing the premises for use during the
Winter Use Period.
iv. Operating Costs: MLSE shall, except as otherwise provided, be solely
responsible for any incremental operating costs at Lamport Stadium
associated with the deployment, operation and take down and storage of the
bubble during the Winter Use Period. These costs shall, without limiting the
generality hereof, include:
1. a contribution of operating funding to address normal maintenance
and operational costs of the bathrooms, change rooms and areas
required for access to the bubble; and
2. the payment of increased utility costs, the repair of damage to the
Licensed Property during the Winter Use Period, winter maintenance
costs for the removal of snow and ice from the bubble and
surrounding area and increased security costs as a result of the
presence of the bubble.
v. Taxes: MLSE shall be responsible for any taxes, including property taxes,
payable as a result of the use and occupancy of the property by MLSE.
vi. Fees: MLSE shall have the right to establish fees for the use of the Licensed
Property during the Winter Use Period, subject to the approval of the City,
acting reasonably, and the condition that the amount of such fees shall not
exceed the hourly rental rates for the use of playing fields of similar quality
within the Greater Toronto Area (defined as the area comprised of the City of
Toronto and Regions of Durham, Peel and York).
vii. Operational Requirements: MLSE’s right to use of the Licensed Property
during the Winter Use Period shall be subject to the following requirements:
1. The provision of an annual operating budget no later than July 31st
for the upcoming year commencing January 1st for the information of
the City along with business plan supporting that budget;
2. The annual maintenance work to put up and take down the bubble
shall be done by MLSE at its expense;
3. Bubble/Field Capital Reserve: The City will cause a segregated
interest bearing capital reserve account to be established to fund
capital expenditures (i.e. as defined by GAAP) for the bubble and the
field, and the City and MLSE shall contribute a total of $50,000 per
year to fund capital expenditures in respect of the bubble and field as
contemplated in the Annual Capital Plan. All capital repairs shall be
identified, approved and performed by the City, in its sole discretion.
(f) Records: MLSE shall keep full and accurate records relating to all aspects of the
management and operation of the Licensed Property in accordance with Generally
Accepted Accounting Principles, consistently applied, as contained in the Canadian
Institute of Chartered Accountants Handbook. MLSE shall keep and preserve all records,
including rental agreements, purchase orders, invoices and other evidence of revenues
and expenses. MLSE shall give the City‘s authorized representatives access to and the
right to review all books and records upon reasonable prior notice.
(g) Lakeshore Collegiate Agreement: The City and MLSE shall enter into an agreement with
TDSB for the construction of a new artificial soccer field at Lakeshore Collegiate (or
upgrade a selected Parks site) on the terms as discussed in section 7 below.
(h) Level of Community Use: MLSE agrees that, in the event that the combined number of
community use hours made available from the use of Lamport Stadium during the Winter
Use Season and the use of the new soccer field at Lakeshore Collegiate (or other selected
Parks site) by the City falls below the potential number of community use hours (e.g.
4895 in 2008) made available through the 50% of community use requirement for the
Soccer Stadium pursuant to the Management Agreement, MLSE shall identify and
provide the City with additional proposals for generating additional community use, all at
the sole cost of MLSE.
(i) Naming Rights: The rights granted to MLSE under the Agreement shall not include the
right to sell the naming rights for the Licensed Property.
(j) Damage and Destruction: In the event that the Licensed Property is damaged or
destroyed to the extent that there is a material adverse effect on the operation of the
Licensed Property (“Major Destruction”), then either party may elect to terminate this
Agreement, and the rights and obligations of the parties under the Agreement shall be at
an end.
(k) Other Commercial Terms: The Agreement shall contain such other terms as may be
agreed by the parties and are satisfactory to the General Manager of Parks, Forestry and
Recreation,, the Deputy City Manager & Chief Financial Officer and the City Solicitor,
which shall include the following:
i. MLSE shall be responsible for obtaining and maintaining the following
insurance in respect of the Licensed Property:
- comprehensive general liability;
- property insurance in full replacement value of all property owned
by MLSE or for which it is legally liable, including inventory and
stock, furnishings and chattels located within the Licensed Property;
- crime insurance;
- owned and non-owned automobile liability; and
- professional liability insurance,
all in such form (e.g. inclusion of clauses re: additional insureds, cross
liability/severability of interest, waiver of subrogation, notice of cancellation
etc.) and amount as may be required by the City’s Insurance and Risk
Management Group.
ii. MLSE and the City shall agree to mutually indemnify each other for their
breach, negligence and willful misconduct in respect of the Licensed
Property.
iii. No assignment by MLSE without the prior written consent of the City, not to
be unreasonably withheld, it being agreed that it shall be reasonable for the
City/Board to withhold such consent if MLSE cannot demonstrate that the
proposed assignee has sufficient qualifications or creditworthiness to perform
the obligations of MLSE pursuant to the Agreement. If the City provides its
consent to an assignment of the Agreement, MLSE shall remain bound by
such obligations. For greater certainty, MLSE shall not be permitted to
contract out the performance of its obligations under the Agreement without
the prior written consent of the City, not to be unreasonably withheld.
iv. Customary events of default, including and remedies, including termination.
v. Basic corporate representations and warranties from each of the City/Board
and MLSE only.
SECTION C
7. Lakeshore Collegiate Agreement:
The City and MLSE shall enter into an agreement for the construction of a new artificial
soccer field at Lakeshore Collegiate by MLSE or, in the event that TDSB approval is not
received on or before October 1, 2009, requiring MLSE to provide an upgrade to a City Parks
facility for community sports purposes as selected by the City in its sole and unfettered
discretion with an equivalent monetary value (being $2 million less the cost to complete the
Lamport Stadium improvements), as follows:
(a) Subject to the receipt of approval by the TDSB, the City and MLSE shall enter into
an agreement with TDSB for the construction of a new artificial soccer field at
Lakeshore Collegiate by MLSE, including the following terms:
i. Construction: MLSE shall, at its sole expense, shall construct the new
soccer field in accordance with the description attached as Schedule “D”
to this LOI and including terms satisfactory to the TBSB and the City as
required to address the same issues as set out in section 6(c) above.
MLSE shall complete construction of the new soccer field by June 1,
2010.
ii. Term: The term of this Agreement shall be equal to the term of the
Lamport Stadium Agreement.
iii. Exclusive Use: The City shall have exclusive right to use the soccer
field for Community Sports Purposes (as defined in the Lamport
Agreement) during the months of July and August and receive all
revenue generated from the use of the soccer field during the months of
July and August (the “Community Use Funds” as defined above).
iv. Costs: While the City shall be responsible for the operating costs
(defined generally as the costs of promoting, operating and managing,
including repairs or maintenance which constitute operating costs in
accordance with GAAP) for the soccer field during the months of July
and August, it shall not be responsible for any capital costs (defined
generally as repairs, maintenance, additions, alterations, renovations,
restorations, replacements and improvements which are capital in nature
according to GAAP or are intended primarily to increase the life of an
item) in respect of the soccer field.
v. Other Commercial Terms: The Agreement shall contain such other
terms as may be agreed by the parties and are satisfactory to the General
Manager of Parks, Forestry and Recreation,, the Deputy City Manager &
Chief Financial Officer and the City Solicitor.
(b) In the event that TDSB approval for the Lakeshore Collegiate site is not received on
or before October 1, 2009, MLSE shall be required to provide an upgrade to a City
Parks facility for community sports purposes as selected by the City in its sole and
unfettered discretion with an equivalent monetary value (being $2 million less the
cost to complete the Lamport Stadium improvements) on terms as required to address
the construction issues as set out in section 6(c) above and other commercial terms
satisfactory to the General Manager of Parks, Forestry and Recreation, the Deputy
City Manager & Chief Financial Officer and the City Solicitor.
SECTION D
8. Contribution Agreement Amendments
The Contribution Agreement shall be amended as approved by the City, Ontario and Canada to
reflect the transactions contemplated in this LOI, including:
(a) Amending the requirement for Community Sports Purposes for the Soccer Stadium to
reflect the reduced availability of the Soccer Stadium for Community Sports Purposes
and the increased community use at Lamport Stadium and Lakeshore Collegiate (or other
selected Parks site); and
(b) Acknowledging the removal and relocation of the winter bubble from the Soccer Stadium
and the replacement of the artificial turf with a highest quality grass field.
(c) Other Commercial Terms: The Agreement shall contain such other terms as may be
agreed by the parties and are satisfactory to the Chief Executive Officer of Exhibition
Place, General Manager of Parks, Forestry and Recreation, the Deputy City Manager &
Chief Financial Officer and the City Solicitor.
Terms Specific to this LOI
Exclusivity
From the date this letter is approved by The Board of Governors of Exhibition Place and City Council and
until formal documentation has been executed by the parties or negotiations have been discontinued, the
parties agree not to take any action or engage in any negotiations with unrelated third parties either for the
construction, management or use of Allan Lamport Stadium or similar facilities within the Greater
Toronto Area.
Public Disclosure
Once this letter has been delivered, the Board/City shall be permitted to publicly disclose the terms and
conditions outlined in this letter agreement in its sole and absolute discretion.
Indemnity
MLSE shall indemnify and hold harmless the Board, the City of Toronto, and their respective elected
officials, directors, officers, agents and employees from and against any and all losses, claims, liability,
damage, action or expense (including without limitation, costs and legal fees) arising out of or relating in
any way to the negligence or wilful misconduct of MLSE in the entering into or performance or purported
performance of their obligations under this LOI or any negligence or wilful misconduct of any person for
whom they are in law responsible. The City and Board shall indemnify and hold harmless MLSE, and its
directors, officers, agents and employees from and against any and all losses, claims, liability, damage,
action or expense (including without limitation, costs and legal fees) arising out of or relating in any way
to the negligence or wilful misconduct of the City or the Board in the entering into or performance or
purported performance of their obligations under this LOI or any negligence or wilful misconduct of any
person for whom they are in law responsible.
Assignment
MLSE may not assign, convey or transfer in any way its rights under this LOI without the prior written
consent of the Board and the City, which may be arbitrarily and unreasonably withheld.
Termination
If any party fails to provide information or perform any other obligations required pursuant to this LOI
within the time periods stipulated, the other party may give notice to the non-performing party of said
failure to perform and, if the non-performing party fails to rectify the situation within ten (10) days
following receipt of said notice, the party giving notice may terminate this LOI.
In each and every such instance, if a party exercises its right to terminate this LOI, the other party hereby
acknowledges and agrees that it shall have no claim against the terminating party for any costs and
expenses incurred by it prior to the date of termination.
Timetable
The terms and conditions set out in this LOI comprise the Key Business Terms of the proposed
agreements between the Board, City and MLSE. The parties acknowledge that they have developed the
following timetable for completing working the matters required prior to commencement of construction
of the Project.
(a) Board Approval of LOI September 11, 2009
(b) City Council Approval of LOI September 30, 2009
(c) TDSB Approval October1 2009
(c) Provincial and Federal Government Approval October 1, 2009
(h) Negotiation and Finalization of Agreements October 1, 2009
(j) Construction of Ringbeam and Bubble at Allan
Lamport Stadium
October 1, 2009 to November 27,
2009
(k) Grass Field Construction at Soccer Stadium After last TFC Game in 2009 to
May 1, 2010
(l) Construction of Artificial Field at Lakeshore
Collegiate (Or upgrade at other selected Parks site)
October 1, 2009 to May 1, 2010
This timetable is subject to further discussions between the parties and the TDSB and the Provincial and
Federal Governments. The parties acknowledge that the desire to have all facilities available for use as
contemplated herein may require that these projects proceed on the basis of this LOI or other interim
arrangements between the parties.
Good Faith Negotiations
Upon execution of this LOI by the parties, the parties agree to work diligently, co-operatively, and in
good faith with one another toward the shared goal of negotiating, finalizing and executing binding
agreements along the lines set out in this LOI.
Force Majeure
Each of the parties shall be excused from the performance of any obligation hereunder to the extent that
such obligation is hindered or prevented by any strike, boycott, lockout or other labour dispute, any act of
God, any riot, civil disturbance, act of terrorism or any act of war or of the public enemy; any fire or theft,
any present or future governmental law, ordinance, rule or regulation, or any other cause or contingency
beyond the parties' control (other than a lack of financial resources).
Representations
The parties all represent and warrant of the date hereof as follows and acknowledge that the other parties
are relying on such representations and warranties in connection with the transactions contemplated by
this LOI:
(a) Each party is a corporation duly incorporated, organized and subsisting under the laws of
the Province of Ontario.;
(b) They have the power, authority and right to: (i) enter into and deliver this LOI; and (ii)
perform their obligations under and as contemplated to be performed pursuant to this
LOI;
(c) To the extent that this LOI is binding on the parties as set out herein, it constitutes a valid
and legally binding obligation of the parties, enforceable against them in accordance with
its terms subject to applicable bankruptcy, insolvency, reorganization and other laws of
general application limiting the enforcement of creditors' rights generally and to the fact
that specific performance is an equitable remedy available only in the discretion of the
court; and
(d) The entering into and the delivery of this LOI and the performance of the obligations of
the parties hereunder will not result in the violation of:
(i) any of the provisions of the constating documents or by-laws of any party; or
(ii) any agreement or other instrument to which they are a party or by which they are
bound.
This letter may be executed in any number of counterparts, each of which shall be deemed to be an
original and all of which taken together shall be deemed to constitute one and the same
If you are interested in pursuing the transactions contemplated by this letter on the basis outlined herein,
please acknowledge by executing one copy of the letter where indicated and returning same to the
undersigned as soon as possible.
Yours truly,
MAPLE LEAF SPORTS & ENTERTAINMENT LTD.
Per:
Richard A. Peddie
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