Introduction

In the chapter called South of Queen there is a subsection on the address 2-90 Lisgar. This chapter, on TMAC, might as well be several sub-chapters about 2-90 Lisgar because it tells the lengthy story of two floors of that building, which got built and occupied as The Edge. It might be part of “the art precinct” section of the Lisgar Park chapter. Or it could be part of Comments and Rants, [Section 37]/planning/comments-and-rants/#section-37). The story of those two floors is long and complicated and, as of June 2017, sad.

Those two floors morphed into an arts facility for the Toronto Media Arts Cluster (‘TMAC’) via a Section 37 deal. It became the largest of the various Section 37 benefits in West Queen West. If its 38,000 square feet could be sold commercially (it can’t), it would be worth over $10 million. Alas, in June 2017 the space is unoccupied and TMAC’s claim to it subject to legal disputes. How those disputes get resolved or not is entirely uncertain at this point. And frankly I fear a major crash and burn for Section 37. TMAC—Part Two is about the 2017 problems. But don’t expect any answers, just some speculation.

When in 2008 the dust settled on the purchase by Urbancorp from Baywood of 2-90 Lisgar (the site south of the park) and 48 Abell from Verdiroc, all the buildings around the new park (except the already built building to the east) were in the hands of the same developer, Urbancorp. It was already the owner of 150 Sudbury. As described in the Lisgar Park chapter, Active 18 was working hard on the arts precinct idea. This new common ownership just whetted our appetites.

None Here’s the first sketch for The Edge—to which height was added so that the second and third floors could become arts space.

When Urbancorp acquired 2-90 Lisgar from Baywood—surprise!—they proposed a new design with greater density. Active 18 then put a proposal on the table for discussion that there be a second West Queen West Section 37 deal whereby the new design’s extra density could be in exchange for free/cheap space for an arts facility. At that point we were thinking of MOCCA, the Museum of Contemporary Canadian Art. Urbancorp was interested. After extensive negotiations in 2009 that deal fell apart.

Then TMAC came forward as a substitute. After more and even more complicated negotiations a deal was struck. The Edge got built with extra density, i.e. more floors up top, and with custom designed space for TMAC down below. Just as The Edge was getting to completion and ready to close with its purchasers, TMAC among them, TMAC fell apart. They’d say they “re-structured”. But the City decided to pull the plug on an “un-structured” TMAC, saying they had no acceptable business plan to manage the space. (Everybody describes TMAC’s organizational issues differently.) The arts community fought the City on this (see news story) and forced the city to reconsider the cancellation. Meaning? The City and TMAC were suing each other and mediating, without apparent end.

Then, in 2016, Urbancorp went bankrupt. Technically, it sought “restructuring”, which is much the same.

In 2017 the dispute and the mediation blew up. And today, we are nowhere!

Then the plutonium casing sprung a leak and…and…and…as I write in mid-2017, the story has no ending. The space sits empty.

You may, or may not, be interested in the tortured history with no ending. Aside from hoping it all falls into place, I’m interested in how this very difficult Section 37 deal was pulled together and how it fell apart and what will be the consequences. The space itself is beautiful, although it needs some money to be spent in outfitting it. Eventually…eventually…

There are two good messages in this story. One is how close we are to completing the vision of an arts precinct that Active 18 has promoted since 2008. And the second is how far the city staff stretched to make this difficult deal happen. While the arts community makes the city staff out to be the bad guys, the story of their efforts was and is a GOOD as far as I am concerned.

And maybe if the whole deal falls apart, it will end up being a big BAD on Active 18 for pushing too hard for major benefits to an organization that couldn’t handle it.

The MOCCA negotiations

As we were meeting with Urbancorp in 2009 over their plans for 2-90 Lisgar, Active 18 thought—can we squeeze some more arts facilities out of more Section 37 benefits? Alan Saskin, the President of Urbancorp, had made a reasonable deal with Artscape in his 150 Sudbury building. Various members of the steering committee knew that the Museum of Contemporary Canadian Art (MOCCA) located just down the street on Queen was looking for a new home. What a fine addition to our arts precinct, we thought! We were empire builders of a unique sort—ones with no money. Some devil told me Alan was a big art collector.

So I suggested to Alan, why not consider a Section 37 deal for 2-90 Lisgar? A few more floors in exchange for some free or cheap space for MOCCA.

Feb 18 and 21, 2011:

Greetings Again Alan

We were chatting up your projects the other day and formulated the beginning of an idea for the second floor of The Edge---which would satisfy your non-res in the most spectacular and beneficial fashion. Trust me, the idea is great. But before we dig into it I need to know whether the second floor units are spoken for. We'd also need a couple of units on the ground floor to allow separate access to the second floor. If this is impossible, tell me, and I'll kill the fabulous idea that would make you the developer hero of the decade and your building the envy of all right thinking people everywhere, etc. etc. etc. The idea would probably require some height adjustment. Been there, done that!

Alan responded:

You had me at..."developer hero of the decade!" Sounds like very exciting and very doable stuff. Would love to meet with and work with some new groups. The second floor space is not committed to anyone and it does have excellent access possibilities from the ground floor.

I trust your judgement on when to involve us. The arts precinct language will be in our next condo docs, they should be ready late next week, I'll send you the passages.

I happen to be in Florida this week, back home next Tuesday.

As an aside, I note that when Active 18 started into all this in 2006 at the OMB, Urbancorp’s lawyer told his client NOT to even talk to the community organization. Think on how far we had come—or sunk—in five years! Now in 2017, the norm is developers, the Planning Division and community groups, wheeling and dealing Section 37 deals.

I started out in 2006 as the ‘crack’ dealer of Section 37 deals and Al ended up as developer of decade! To each his own.

This led to an interesting and, I believe, unique at the time, negotiation. With Active 18 pushing and Councillor Ana Bailão pulling we began a very complex set of negotiations that went on for a year and a bit. Ana set up a working group, including officials from City Planning, MOCCA, A18, and the developer, some smart architects and other City officials. The group tried to figure out the cost of what MOCCA needed to move into the bottom two or three floors of the proposed new building at 2-90 Lisgar kitted out to museum standards for MOCCA. By “needed” I mean, how many more floors were needed to generate enough additional profit to allow Urbancorp to offer a good deal to MOCCA including museum quality space. The budgets were discussed in detail. MOCCA wanted to be a Class A Museum facility, which meant climate controls necessary for art storage. Expensive. We were custom designing space, costing it, and negotiating with the developer regarding his bottom line, meaning how many extra floors would it take to finance the project.

A18 didn’t have much to say on the financial details in these discussions. I observe that everybody at the table seemed to be working in good faith to make it happen. This was a huge GOOD for City Planning and City Culture. They stretched way beyond the normal for Section 37 benefits and negotiations. Instead of being on the passive end of Section 37 proposals from a developer, they became some kind of cultural entrepreneurs using Section 37 as the city’s “capital”. The City was realizing that “culture” was big business.

Section 37 deal-breakers

The premise of any Section 37 benefit is that it is for the public benefit. That meant in the 2-90 Lisgar case that if the City itself didn’t get the benefit, it had to go to a non-profit. And the benefit must be for the immediate neighbourhood. This has been a requirement for many years in OMB case law. And if the City itself is getting the benefit it can’t be used for on-going budget costs. The money is for extras for the neighbourhood from the capital account, in other words, not sewers.

In the MOCCA negotiations, Active 18 was prepared to consider agreeing to greater height and density, to the extent our view mattered at City Hall, if the benefit we got was worth it to the neighbourhood. A major art gallery definitely got on our short list as a benefit for the “arts precinct”. And we wouldn’t agree to more height and density so the developer could make more money from a supermarket.

Assuming MOCCA and Urbancorp and the City could make a deal on cost and extra density, then the issue emerged that MOCCA wanted to be able, sometime down the road, to sell the property and keep the profit. They passed the test at stage one—the Section 37 deal was for the benefit of a non-profit. But neither the City nor Active 18 would agree that the space might at some point be sold by MOCCA for other purposes, such as a supermarket, or some other non-arts function. I have no criticism of the MOCCA board for wanting that. They wanted to be able to grow. Good. But we were not prepared to agree that we’d end up with something ‘lesser’ down the road. Put another way, we wouldn’t agree that MOCCA could flip the property in the future. Sounds ugly. Be on guard. Neighbourhood benefit means permanent neighbourhood benefit.

This was one of the deal breakers. The other was the high cost of outfitting the additional space for the needs of a Class A art museum. The discussion on this was interesting. I learned a lot about the cost of museums. I’m glad I’ve forgotten it all—secure in the knowledge that other folks better than I remember such stuff.

TMAC steps in

As the MOCCA proposal fell apart, the City and Active 18 were looking for a substitute that would fit in with the arts precinct idea we were all promoting. Various members of the steering committee knew an arts coalition known as TMAC (Toronto Media Arts Collective) and put them forward.

(The decision as to who gets the Section 37 benefit was and is one for the local Councillor, subject to Council approval. There was not then and still isn’t a process of competitive bidding for Section 37 benefits. The developers’ views don’t count for much in the choosing. But in this case the developer, Alan Saskin, was an art collector and partial to assisting MOCCA. TMAC was not an organization he was familiar with.)

TMAC was a group of artist-run galleries and production studios that had the vision of moving in together, if they could find the right space. Synergy. Synergy. Synergy. They studied and conferred for years about how to do it. Key to the plan was that they could all use a cinema facility. But they were independent organizations, all known to the City through years of funding, and all with independent boards of directors.

Alan Saskin was game for another effort. Good on him.

And so we went through another set of negotiations that were even more complicated. They were more complicated because, while TMAC had a vision how they might work together in the same space, that had never actually done it. They had hunted for space but it had never been a real prospect. Now they had to consider some actual raw space and how it actually might work for their collective needs, not to mention what they could afford to pay.

Exactly how they would work together was a whole separate negotiation among the organizations. Who would be “boss” of the space? Would there be common fundraising? What happened if one group couldn’t pay its share of the rent? It was settled that TMAC would be the top corp and the others would be equal members, but that didn’t answer the nitty-gritty hard questions.

TMAC member groups were working on these issues and simultaneously on designing with the developer how the space would actually get built out for their individual needs. This discussion was heady and wonderful.

The cost of the build-out impacted directly on the bottom line cost to the individual organizations. They needed space at a cost equivalent to what they were paying for their rented space elsewhere. They were in fact negotiating to buy space. The price had to be cheap or the eventual cost would be too high.

This last point translated, again, into how many additional profit-making floors the developer needed to build to make the art space cheap, and that in turn into how many more floors Planning would agree to.

Active 18 watched all this. You could say we started it. When the negotiations were all over, A18 had to say whether we would support that much extra height in exchange for the arts facility that was emerging.

If I was impressed with how far the bureaucrats went in the earlier OCCA negotiations I was wowed by what they did in round two. TWO GOODS to City Hall. The developer put up some money so the more-or-less impoverished artist-run centres could hire an architect and financial planner to advise them exactly what they needed and how much it would cost and how to negotiate. This was risk money. Triple GOOD for Alan Saskin.

I note that the interior space was custom designed for the TMAC organizations. It eventually got built out to these specifications. It is beautiful—overlooking the park

Then all this needed to be translated back into how much rent the TMAC members would have to come up with compared to their situations beforehand. Then, the bottom line, was this a really a good deal going forward? Not easy questions. And, yes the developer was calculating all this with an eye on his bottom line but still, he was fronting some real cash to the other side.

Is this a good place to say he eventually went bankrupt?

Again, Active 18 could not contribute to the discussion on the financial calculations. But we watched so that the end result would be something that benefited the neighbourhood. We were insistent that one part of the project be included. That was a theatre or cinema, suitable for the TMAC groups, into which the public would often come for shows. That was our public angle regarding the use of the space.

Eventually when a deal was struck the Active 18 steering committee had to come back to ground zero. “Alright, West Queen West gets 35,000 square feet, cheap, for an arts hub, with arts uses guaranteed on a long term basis, in exchange for more height in three buildings around the new park.”

Should A18 support the deal that had been negotiated? I remember that discussion well. Art for extra density?’ We had some numbers for how many additional people the extra height would mean for the ‘hood and the already overloaded Queen streetcar. And we had the shadow drawing showing how much loss of sun in the park we would all suffer. We concluded the pluses outweighed the minuses and wrote to City Council endorsing the deal.

It was the correct marginal analysis at the time, in 2013. In other words, we’re getting more people anyhow. Did a few more make that much difference?

The wheels fall off the TMAC cart

The Section 37 deal was a three-way legal monster between the City, TMAC and the developer. In fact it was three contracts. The City agreed with the developer it could have extra density IF it sold to TMAC at specified bargain prices and with very restrictive zoning on the height and permitted uses. The developer and TMAC entered into an agreement of purchase and sale. And the City and TMAC had a deal between them, the key clause being that TMAC had to perform up to standards or the City could take over.

These contracts were worked out and signed. And things were looking pretty GOOD.

Go here to see the deal. It is a complex contract and it got registered against title.

The value of the Section 37 benefit can be debated but it was and is substantial. If you ignore the fact the space is forever locked into arts uses and must be operated by a non-profit and think of it as commercial space, the value of the benefit might be $15,000,000.

But over the years of construction the TMAC organization fell apart. Of the original eight groups only two were left when the closing of the purchase approached in 2015. This wasn’t an A18 issue.

The City took the position that TMAC business plan, a requirement, was not up to snuff and then refused to let TMAC close the purchase.

At the last minute, TMAC, the top level corp, admitted two new members. But still the City said “No.”

Here’s the rub. Active 18 can’t and shouldn’t and didn’t become the monitor or daddy to TMAC. We counted on the City to do that. TMAC’s obligations to the public had to be enforced. This was a huge grant from the neighbourhood which would suffer the extra density. Active 18 expected TMAC to deliver. Read: a functioning theatre/cinema. And we expected the City to enforce this.

TMAC—Part Two

As noted, the City effectively was the guarantor of the Section 37 deal and the public good resulting from it, and at closing time in 2015 was not happy with TMAC’s plans.

Here’s a partial list of the problems. Read it and weep.

The big BAD is that the list is so long and the problems so complex that I fear the City—perhaps I should say the city staff who worked hard on this—have been badly burned for their efforts. Even if they succeed in pulling this out of the fire, and they are still trying, it’ll be a while before they go to bat for the little guys again in a complex deal. I do have criticisms of how they’ve handled particular things but at this point these are trivial next to the totality of the problems.

From atop my mountain looking down and back, the lesson is this. The small low-margin arts organizations need to up their management game and the City has to learn how to help them. Section 37 benefits are public benefits and the City is absolutely right to be a rigorous guardian. They have to do this. Active 18 wants them to do this. They’re not bad for doing this. And it’s hard for them because this is new turf.

Problems

  • While it was a sweet deal it wasn’t as sweet as TMAC wanted or needed, because there were still rent and expenses to pay, and the cost after moving in would exceed what they could pay.
  • They should have figured this out beforehand.
  • They couldn’t figure it out before, they said, because some of the line items were uncertain.
  • Like the amount for property taxes, which seemed to start small but grew.
  • The problem of what happens if one of the organizations were to fail: who is responsible for that share of rent and expenses?
  • At the end of the deal-making the TMAC group was still left with money it had to raise to kit out the theatre. (“No theatre” was and is a big issue for Active 18.) They offered no viable plan to raise the money. But they promised they had a donor/sponsor.
  • TMAC as a group fell apart. Certain members left, certain new members joined.
  • The TMAC group couldn’t satisfy the City they had a decent and trustworthy business plan.
  • The TMAC groups themselves fought over leadership. BAD
  • The City’s Real Estate Services Division was very tough. Their position was that the City should never be in the position to have to carry any expenses from property acquired in a default.
  • There were problems with the developer, real or imagined, over what would be included and built for TMAC.
  • Just as the City was going to pull the plug (2015) on TMAC for “no good business plan” and TMAC’s internal chaos, TMAC reformulated itself with new members. Good move. Appalling timing.
  • The City did indeed cancel TMAC as a beneficiary of the Section 37 benefit at 2-90 Lisgar and started looking for some other organization.
  • This led to huge community outcry, which was successful in forcing the City to keep the door open to TMAC. As a populist—not of the Trump sort—I loved the fact that “the people” had triumphed. But it doesn’t rise to the level of a “good”. The people triumphed in the sense the City was forced to keep bargaining with TMAC in its new configuration. And I have to say loudly that while I am glad the City was forced to give TMAC another chance, the City staff who took the flack at the public meeting did not deserve that. Three GOODS for bureaucrats doing the Lord’s work.
  • Then TMAC sued the City—never a good sign. And as things dragged on into mediation Active 18 was excluded from the details until 2017.
  • Here is TMAC’s Statement of Claim and here is the City’s Statement of Defence.

2016-17

  • Then (2016) the builder, Urbancorp, went bankrupt, technically into restructuring, and the status of the space itself as an asset that Urbancorp can/should/must deliver to TMAC—if the City allowed TMAC to close, if TMAC should get the money to close…became…let’s say “clouded”. But regardless of that complex insolvency issue, the site has quite specific zoning that makes it useless except for the arts purposes specified.
  • In 2017 new wrinkles twisted my knickers into a bag of nails.
  • First we learned that TMAC was trying to settle with the restructuring Monitor and Urbancorp and the City. Settling: not a bad thing to do, depending on the terms.
  • TMAC asked Active 18 to support the settlement, which would require a revision of the Section 37 agreement at the City. (They deny they asked this.) And they claim the terms that were being discussed were confidential. Not so. Active 18 learned of the terms—from TMAC. And also from other sources.
  • Active 18 met and went over the proposed terms and passed a resolution opposing them. The terms dramatically reduced the arts benefits we had originally settled on.
  • And then, as we were digesting this (in May 2017), we learned that TMAC had an application going forward for a permanent liquor license for the premises—for 894 persons!!! including 120 in the Park, for purposes called “other”. Active 18 passed another resolution opposing the massive liquor License.
  • I filed a detailed letter opposing this application]. As with A18, I have no objection to wine/beer as part of occasional arts events. But there are no circumstances where the massive license is justified in a residential neighbourhood. (The City itself is also opposing the application.)
  • We are now told (June 2017) that the proposed deal is off. The City has refused the proposed settlement and the litigation is back on.

I note that Active 18’s opposition is to specific actions or positions by TMAC, not to TMAC itself as an organization that would get the space.

Active 18 is not a party to the restructuring or the litigation between the City and TMAC so our positions are academic to the real decision making. But we hope people listen.

As of June 7, 2017, I have no idea how this bag of nails is going to get hammered.

My personal position has hardened against TMAC, I am unhappy to say, after all the work done on their behalf. This Section 37 asset is huge and important. If this screws up it will reflect badly on the whole Section 37 programme as it might benefit the arts. Everything I know now tells me that TMAC is not up to the task. There is no sign they can or will address the central feature of the space—the cinema—which requires substantial funds. The shrunken TMAC can’t use the large amount of space. Giving some up is a non-starter as far I am concerned.

The City is in a tough spot. It must guarantee that this major asset is properly used. This is extremely difficult for the City to do after title is transferred. Not impossible, just legally very messy. TMAC gives the City very little to work with when it comes to turning over the space.

I hasten to add, sadly, this has nothing to do with the merits of the constituent TMAC organizations as artistic groups.

If I am negative about TMAC others in A18 are much more sympathetic. Here are the thoughts of A18 stalwart, Michelle Gay, as of July 6. She is more sympathetic than I am.

Hi friends, colleagues and fellow artists,

In our back-and-forth communication between the folks who make up our two organizations, Active18 and TMAC---a little time has elapsed since the last set of intense dialogues.

The turn of events between our two groups has left me (and others) dismayed.  There are a multitude of forces at work against our various projects that together perhaps we could have mitigated. I'm not sure where things are at this point in time now, but I did want to communicate with you, as I did with the people at Active18. (I shared my letter to the folks on the steering committee at Active 18 with y'all).  In that note, I was attempting to show the complexity and nuance of what it means to be a cultural producer in our socio-political and economic climate---and remind people that there are thoughtful, engaged, committed people behind this thing called 'TMAC'.

I've been thinking about something that Greg and Ross mentioned to me just in the last couple of months---that the folks at TMAC were angry with A18 because we took a particular position at the big public meeting a year ago.  I wish we would have known this long before now---perhaps we could have worked on this instead of letting it fester. I did point out to multiple people that we have ALWAYS supported the project of getting/helping tmac get into the space in our various meetings with various people---even when TMAC 2.0 was crumbling.  It certainly looked amazing to all the city-people that a large group of (non-Active 18) people came out in support of the project.  They've heard us over and over, over and over.  We always take this same position---nothing changed.  Yes, sometimes the people in active18 are critical---oh well, we're artists we can take it.  I've spent 10 years having these types of challenging discussions in meetings, honing arguments and positions.

I was also moved by something that came up when Henry and I had a telephone chat a month or six weeks ago.  He rightly said---Michelle, it's like you guys are coming in halfway through the movie”. Agreed---on this file, at this time.  But what has been a little sand grain in my sandal is that we could suggest exactly the same about TMAC.  We've been in this movie for a long time.  It's painful to think that the good efforts, good will seem truly unappreciated.

We have worked on dozens of development projects---including fighting like mad to secure homes, work-spaces and exhibition opportunities for artists---as well as getting the public square to be 'a thing'.  We were at the table when the original developer wanted to simply put in a Whole Foods market there.  We had to fight all parties, until they acknowledged that artists matter and that a food market facing a public square was shameful.  We had meeting after meeting with these groups of people---actually bringing sketches to the table to make them recognize this beautiful opportunity.

This is just one project, over the past 11+ years, that the folks at Active 18 (a group that anyone can join, just sayin'), have brought professional and personal time and effort to the table, to shape a better neighbourhood and help independent cultural producers survive in this over-subscribed real-estate market.

Recently, there seems to be an ill-will that has flourished around Active18. As I similarly asked my colleagues in that organization, can we all please remember that this is an open group of politically committed urban planning activists.  We've worked with no resources and with the expectation that good things need to happen---not just for fancy developers looking to cash in.   We get 'nothing' out of these adventures.  Except…. I'll share one of my favourite visualizations around citizen participation and urban planning to explain the nuance. One hopes to move from non-participation and tokenism to the golden land of citizen power.  Probably just a dream.  It may help you folks understand why we care, and hence why we have opinions about projects we've dedicated time and effort to.

So, we're both entering the movie at different points in time.  Thanks Henry for crystallizing this image for me---I think it illustrates perfectly our collective situation.

I obviously want to see a successful media arts cluster happening in the space. The hard fought public amenity deserves careful stewardship---I know you amazing folks are up to the ask/task.

Not sure where our organizations overlap any longer but I'm always eager to lend a hand if needed.

Michelle

The future of TMAC is still a mystery in July 2017. Stay tuned.