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BUSINESSANALYSIS:LANDECONOMICS,

MARKETANDFINANCING

MichaelWilliams

GeneralManager,EconomicDevelopmentandCulture,

CityofToronto

DavidKusturin

ChiefOpera

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PROJECTTEAM

WaterfrontToronto CityofToronto TorontoandRegionConservaonAuthority PriceWaterhouseCoopers CushmanandWakefield ScoaCapital UrbanStrategies

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AGENDA

MarketPerspecve MarketDemand CostEsmates CatalycDevelopment Funding NextSteps

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MARKETPERSPECTIVES

20MarketSoundingInterviews NumerousLandOwnerandUserOneonOneMeengs DemandProjeconsandMarketShareAnalysis FinancingandFundingOpportunies FinancialModellingandDevelopmentPhasing

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MARKETSOUNDINGINTERVIEWEES

CadillacFairview DanielsCorporaon IntegratedAssetManagement

Corporaon

Minto Tridel FirstGulf/GreatGulf StrataAggregates GWLRealtyAdvisorsMacQuarrieCapitalMarketsCanada InfrastructureOntario

NaonalBankFinancialGroup BrookfieldFinancial

TDBank Metropia BraXyandPartners RoseCorporaon WesieldGroup CityzenDevelopments Euromart MaXamyHomes OxfordProperes CastlepointRealtyPartners Borealis FieraAxiumInfrastructure FengateCapitalManagementLtd.

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KEYFINDINGDEVELOPERSAGREE

GreatLocaonSupporveofhighdensityresidenal,officecommercialandretail;lessdemandforhotelandindustrial

DEVELOPERINTERESTISQUALIFIEDHOWEVER:

Developmentintensificaonrequireshigherordertransit Areaistoolargeforonedeveloperandonerealestatecycle Recognizephasingdevelopmentandinfrastructureisanecessity Pre-servicing(roadsandulies)isapre-requisite Welcome(butwillnotinvestin)instuonalandgovernmentacvies/uses Willavoidbrownfieldliability(butmayassumecosts) Certaintyoflanduse,planningandservicingisrequired

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RESIDENTIAL

6,7008,000units

40to80acres

OFFICE

1.75M4.0Msf

40to90

acres

RETAIL

175Kto400Ksf

5to10

acres

INDUSTRIAL/

PORT

TBD

TBD

TOTAL

100to200acres

SUMMARYOFPROJECTEDDEVELOPMENT

OVER20YEARDURATION

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INVESTMENTREQUIRED

Floodproteconandassociatedinfrastructure

$400Mto$450M

CompleteinfrastructurerequirementsforenrePortLandsareaIncludeswater,sanitarysewer,stormsewer,roads,bridges,soilremediaon,ulies,parksandtransit

ExcludesLakeOntarioPark$2.0Bto$2.5B

Totalinfrastructureandservicingcosts

$2.5Bto$3.0B

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POTENTIALCATALYTIC

DEVELOPMENTSCouldchangedevelopmentscenario.

Capitalizeonpotenalopportuniesprovidedbyaverymajor

projectallwouldbesubjecttopolicy,market,fundingand

communityconsideraons

PostsecondaryInstuon/ResearchparkCulturalortouristaXraconWorldFair/OlympicsInternaonalNGO/MajorCorporateHeadquartersDesnaonretailcentre/urbanbigboxcentre

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SOURCESOFPOTENTIALREVENUE

TOFUNDINFRASTRUCTURE

LeverageincrementalMunicipalandProvincialpropertytaxes(TaxIncrementFinancing-TIF)

Developmentcharges,Secon37Contribuons,localimprovementcharges

Subdivisioncharges,inter-ownercostsharing LandsalerevenuesfromPublicly-ownedproperes Publicinvestment

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ADDITIONALCONSIDERATIONS

ONFUNDINGOPPORTUNITIES

CertainfundingoponshavenoprecedentsinOntario(TIFs) CertainfundingoponsarerarelyimplementedinToronto

(land-ownersgroupcostsharingagreements)

Futurerevenuesarehighlyspeculaveduetoextendeddevelopmentmelinesandgeneratefinancialriskpremiums

Infrastructureinvestmentsprecededevelopmentandrevenuerealizaonthusrequiringbridgefinancing

Innovaveinfrastructurefinancing,deliveryandoperaonmodelsthoughtheprivatesector(P3)arepossible

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ESTIMATED20YEARREVENUE

FORECASTTOFUNDINFRASTRUCTURE

Slltobedetermined Willbemuchlessthantotalinfrastructurecostsforfull

portlandsarea

Willrequirephasingofinfrastructureelements

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NETSTEPS

Addionalinfrastructurecostesmang Esmatepotenaladdionalcommercialindustrialandportusegrowthover20years(minorrevenueimpact)

Assesspotenalimpactofcatalycusesondemandandmarketsharebyassetclass

Completeanalysisofinfrastructurefinancingstructuresandrevenuesources

Completepro-formarevenueandinvestmentcashflowscenarios

KEYQUESTION:HOWCANINFRASTRUCTUREINVESTMENTS

BEPHASEDTOCORRESPONDTOREVENUEGENERATION

FROMDEVELOPMENT?

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CONCLUSIONS

2.Realestatedemandwillresultintheabsorponofapproximately10-20%

ofthetotalareaofthePortLandsoverthenext20years.

10%

1.FullInfrastructureFunding

WillNotComeFrom20Year

Development

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Floodprotecon,naturalizaonandgreenspaceMainTradingFloor

Businessanalysis:economics,marketandfinancingSideTradingFloor

PortLands101MainfloorStudio

Developmentplanningandphasing

ThirdFloor,PaRyWaRoom

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HAVEYOURSAY

Publicfeedbackworkshops:Tuesday,April36:30to9:30atSt.LawrenceHallor

Wednesday,April46:30to9:30attheHarbour

CastleWesn

Online:www.portlandsconsultaon.ca