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May 6, 2003
Litigation between the City, TEDCO and Toronto Port Authority not settled
The Toronto Port Authority has not accepted the City's offer to settle an
outstanding legal dispute regarding lands in Toronto's port area. The Policy
and Finance Committee's consideration of a report regarding the settlement
between the City/Toronto Economic Development Corporation (TEDCO) and the
Toronto Port Authority (TPA) at its May 8 meeting was contingent upon reaching
agreement by noon yesterday.

"We are disappointed that the Port Authority has not accepted the City's fair
and generous offer," said Councillor Denzil Minnan-Wong, Chair of the Economic
Development and Parks Committee. "We are concerned that the Port Authority's
actions are delaying the renewal of Toronto's waterfront - one of Canada's most
significant infrastructure improvement projects."

The City/TEDCO's settlement offer is consistent with draft minutes of
settlement approved by Council in November, 2002. "Our offer protects public
interests and is fair to all parties," said Waterfront Project Director Elaine
Baxter-Trahair. "While agreement was reached on the financial settlement, the
Port Authority was unable to conclude its deliberations on the lease offered by
TEDCO in time for the Committee's agenda closing."

The City of Toronto/TEDCO and the Toronto Port Authority have been in
negotiations since November, 2002. In its dispute, the TPA sought compensation
for or the return of approximately 612 acres of lands in the port area
transferred to the City/TEDCO by the former Toronto Harbour Commission in
1994. Negotiations were intended to avoid litigation that could cost up to $3
million and tie up lands that are key to the Council-approved Secondary Plan
for the Central Waterfront, which calls for green space, a variety of housing
types, recreational venues and retail and commercial space on mostly
underutilized lands.

Resolution of Legal Dispute with Toronto Port Authority

-- In 1994, the TPA, the former City of Toronto and Toronto Economic
Development Corporation (TEDCO) entered into a Subsidy Agreement. The
Agreement called for the payment of capital and operating subsidies to the
Toronto Port Authority (TPA) from the City and TEDCO in exchange for the
transfer of lands from the TPA.

-- In 2001, the TPA filed a Statement of Claim against the City and TEDCO

-- the return of approximately 612 acres of lands in the port area transferred
to the City and TEDCO by the former Toronto Harbour Commission or financial
damages for the transfer of the land

-- compensation for alleged underfunding of the TPA under the 1994 Subsidy

-- The City/TEDCO and the TPA have been in settlement discussions since
November, 2002. The parties have been negotiating a settlement made up of the
following: Minutes of Settlement, a Structured Settlement Agreement and Ground
Lease between the TPA and TEDCO.

-- The Minutes of Settlement and Structured Settlement Agreement were approved
by the Boards of Directors of TEDCO and the Toronto Port Authority on May 4,
2003, but there was no agreement on the terms of the Ground Lease between the

-- The City/TEDCO offer is based on the draft minutes of settlement, approved
by Council in November, 2002. The offer is designed to give the Toronto Port
Authority long-term financial stability, a requirement under the Canada Marine
Act, and access to more land for port users. It also frees up lands for
waterfront renewal and avoids costly litigation, which both the City and the
TPA benefit from.

-- As a result of the TPA's ongoing deliberations, the agenda deadline for the
May 8, 2003 Policy and Finance Committee meeting could not be met.

Media Contact
Waterfront Project Director



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