Joint venture acquires the LCBO head office lands

On June 8, 2016, a joint venture among Menkes Developments (Menkes) and Greystone Managed Investments (Greystone), with Triovest Realty Advisors (Triovest) acting as advisor to Greystone, completed the acquisition from the Liquor Control Board of Ontario (LCBO) of its head office lands centrally located in downtown Toronto for $260 million following a procurement process managed by Infrastructure Ontario.

The net revenue gains from the sale will be used by the Province of Ontario to fund Trillium Trust, which will focus on transit and other key infrastructure projects.

The acquired site is an 11.5-acre property, located at the northeast corner of Q ueens Q uay East and Freeland Street, one block east of Yonge Street. Currently, LCBO occupies several buildings on the site, including a retail store, a four-storey office building, and a warehouse, which it will continue to occupy pending completion of its new office and retail premises to be constructed on the site.

The acquired site includes certain former rail spur lands bifurcating the LCBO site — owned by the City of Toronto Economic Development Corporation carrying on business as Toronto Port Lands Company (TPLC) which were acquired contemporaneously for an additional $11.5 million dollars.

The proposed development will include a 24-storey, 600,000 square foot office tower, 300,000 square feet of commercial retail space, and a new residential community. The community will be anchored by a two-acre park located on the north side of Q ueens Q uay East, between Freeland and Cooper Streets. The northern boundary of the park block will incorporate complementary retail uses fronting onto a future extension of Harbour Street, which presently ends at Yonge Street.

LCBO will be a major tenant of the proposed Class “AAA” office tower located at 100 Q ueens Q uay East. The ground floor of the building will also feature a new flagship LCBO retail store, which will replace the current Q ueens Q uay store.

The existing LCBO warehouse operation on the property will be moved off-site.

LCBO was represented by its Senior Vice President, General Counsel and Corporate Secretary, Penny Wyger, and its in-house legal team leader, Stephanie Simmons.

WeirFoulds LLP represented LCBO with a team led by Lisa Borsook (leasing and property development), and Steven Rukavina (real estate and property development), and including Barnet Kussner (municipal), Glenn Ackerley (procurement and construction), John Buhlman (environmental) and Richard Arezes (real estate).

TPLC was represented by Leor Margulies of Robins Appleby LLP.

Menkes was represented by Mark Karam, Senior Vice President & General Counsel. In connection with the acquisition, the joint venture purchaser was represented by Jules Mikelberg and James Harvey of Dentons Canada LLP. Jeffrey Shore and Ken Herlin of Goodmans LLP represented the joint venture purchaser in connection with the office, retail and other lease arrangements. Jillian Shortt of Dentons Canada LLP represented Greystone and Triovest in connection with the acquisition and the lease arrangements.

Acquisition financing was provided by a syndicate of lenders led by The Bank of Nova Scotia. John Currie and Jeffrey Knowles of McCarthy Tétrault LLP acted as lender’s counsel. Fred Rubinoff and Jeffrey Shore of Goodmans LLP represented the joint venture in connection with the acquisition financing. Heidi Clark of Dentons Canada LLP acted on behalf of Greystone in connection with the acquisition financing.

Jeffrey Shore (corporate commercial) and Mitchell Sherman (tax) of Goodmans LLP represented Menkes Developments Ltd. and its affiliates in connection with the joint venture arrangements among Menkes, Greystone and Triovest. Jillian Shortt, Don Macintosh and Natasha Singh (corporate commercial), and Tony Schweitzer and Jesse Brodlieb (tax) of Dentons Canada LLP represented Greystone and Triovest in connection with the joint venture arrangements.