FOI documents re: UPG agreement with City

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.a. - NEW WESTMINSTER Request No . 2012-41 July 27, 2012 Chris Bryan Editor, New Westminster NewsLeader 7438 Fraser Park Drive Burnaby, BC V5J 5B9 Dear Mr. Bryan: Re: Freedom of Information and Protection of Privacy Act (the "Act') Request No. 2012-41 I am writing about your request dated May 9, 2012 for copies of records of the following records: The original proposal from Uptown Property Group (UPG) to the City for the office tower at the Multi-Use Civic Facility; The original agreement (MOU) between the City and UPG; Any formal project agreement after the original MOU; Closure agreement with UPG; The letter oftennination ofUPG's involvement with the City on the project; All paper (fom1al) correspondence between UPG and the City. At this time the City is able to make a partial release of documents to you. The original proposal fi·om Uptown Properiy Group (UPG) to the City for the office tower at the Multi-Use Civic Facility; Please find enclosed with one paper withheld currently. The original agreement (MOU) between the City and UPG; Please fmd enclosed Any formal project agreement after the original MOU; Please find enclosed Closure agreement with UPG; Please find enclosed The letter oftennination ofUPG's involvement with the City on the project; Under third party review All paper (formal) correspondence between UPG and the City. Doc#304960 Corporation of t he City of New Westminst er 511 Royal Aven ue , New Westmmster. BC V3L 1H9 T 6 04 521 3711 F 6 04 521 3895 E mfo@newwestClty ca www.newwestcity.ca

description

Following is a PDF which compiles documents between the City of New Westminster and Uptown Property Group discussing their partnership to build an office tower and civic centre.

Transcript of FOI documents re: UPG agreement with City

Page 1: FOI documents re: UPG agreement with City

.a. -NEW WESTMINSTER

Request No. 2012-41 July 27, 2012

Chris Bryan Editor, New Westminster NewsLeader 7438 Fraser Park Drive Burnaby, BC V5J 5B9

Dear Mr. Bryan:

Re: Freedom of Information and Protection of Privacy Act (the "Act') Request No. 2012-41

I am writing about your request dated May 9, 2012 for copies of records of the following records:

• The original proposal from Uptown Property Group (UPG) to the City for the office tower at the Multi-Use Civic Facility;

• The original agreement (MOU) between the City and UPG; • Any formal project agreement after the original MOU; • Closure agreement with UPG;

• The letter oftennination ofUPG's involvement with the City on the project; • All paper (fom1al) correspondence between UPG and the City.

At this time the City is able to make a partial release of documents to you.

• The original proposal fi·om Uptown Properiy Group (UPG) to the City for the office tower at the Multi-Use Civic Facility; Please find enclosed with one paper withheld currently.

• The original agreement (MOU) between the City and UPG; Please fmd enclosed

• Any formal project agreement after the original MOU; Please find enclosed

• Closure agreement with UPG; Please find enclosed

• The letter oftennination ofUPG's involvement with the City on the project; Under third party review

• All paper (formal) correspondence between UPG and the City.

Doc#304960

Corporation of the City of New Westm inster 511 Royal Avenue , New West m m ster. BC V3L 1H9

T 604 521 3711 F 604 521 3895 E mfo@newwestClty ca

www.newwestcity.ca

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July 27, 2012

Please find enclosed a portion of the correspondence, the remainder is under third party review.

Some of the records contain infonnation that is exempted from disclosure under the Act. This information has been severed in accordance with following sections of the Act so that the remaining information can be disclosed to you.

• Section 17 (l)(b)- Financial, commercial, scientific information that belongs to the public body that have money value.

• Section 17(1 )(d) - Information the disclosure of which could reasonable be expected to result in the premature disclosure of a proposal or project or in undue financial loss or gain to a third party.

• Section 17 (l)(f)- Information the disclosure of which could reasonable be expected to hann the negotiating position of the public body.

• Section 21 Business interest of third party

• Section 22(2)(g) - Personal information is likelyto be inaccurate or unreliable

• Section 22(2)(h) The disclosure may unfairly damage the reputation of any person referred to in the record requested by the applicant.

Section 17 of the Act has been used to protect the future negotiations of the City with business partners interested in working with the City on the MUCF project or potentially purchasing the project from the City.

Pursuant to section 52 of the Act, you may ask the Infom1ation and Privacy Commissioner to review any matter related to the City of New Westminster's response to your request. The Act allows you 30 days from the date you receive this letter to request a review by writing to:

Infmmation and Privacy Commissioner Fomih Floor 947 Fort Street Victoria, BC V8V 3K3 Telephone: (250) 387-5629 Fax (250) 387- I 696 [email protected]

Doc#304960 Page 2

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July 27, 2012

If you request a review, please provide the Commissioner's office with:

1. Your name , address and telephone number;

2. the file number assigned to your request (the request number quoted at the top of this page);

3. a copy of your original request for information;

4. a copy of this letter; and

5. The detailed reasons or ground upon which you are seeking the review.

Please contact me at (604) 515-3764 or email me at [email protected].

Yours truly,

Jacqueline Killawee Records and Information Administrator

C: Richard Page, FOI Head Corporate Officer

Doc#304960 Page3

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UPTOWN PROPERTY GROUP

- :ret Expression of Interest

NWEOI-10-01

May 12,2010

City of New Westminster 511 Royal Avenue New Westminster, B.C.

V3l1H9

Attention: MUCF Evaluation Team

Dear Evaluation Team members:

We are pleased to submit herewith our Expression of Interest for partnering with the City of

New Westminster to develop the City's Multi-Use Civic Facility.

It is our vision to compliment the Civic Facility with a signif icant class A office building.

The office building will provide concrete and measureable benefits to the City, and offers real

synergies with the Civic Facility.

Our Expression of Interest is enclosed. We welcome your questions and look forward to the opportunity to discuss t he project in greater detail.

Respectfully submitted,

UPG Property Group Inc.

Ends . (2 hard copies, 1 soft copy of submission)

UPG Prooerty Group tnc.

330 - 555 Sixth Street New westminster. BC ·Canada V3L 5Hl

T 604 525 8866 f 604 525 1387

www.uptownpropertygroup.com

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II I • . · ~

~z~­~;;:

~~~ UPTOWN

PROPERTY GROUP

EXPRESSION OF INTEREST

New Westminster

Multi Use Civic Facility

UPG Property Group Inc.

May 2010

0 0 0 \ i l ~· .) -· • .J

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EXECUTIVE SUMMARY

Expression of Interest - May 2010 New Westminst er Multi Use Civic Facili ty

UPG Property Group

• UPG Property Group Inc. expresses interest in partnering w ith the City of New Westm inster to

develop the City's new multi-use civic facility.

• UPG proposes to add a significant office building on top of the multi use civic faci lity. The office

building is envisioned to comprise 17r. ) CF) storeys totalling 1-r r1 )<.T) square feet,

complete with approximately '"t1) parking stalls. O:J

• The office building will bring new class A office space into a submarket that currently offers only a

very limited inventory of quality office space.

• The office building will help build a complete community. Amidst the significant residential

development in recent years, more workspace is needed to avoid the Downtown from turning into a

bedroom community.

An estimated 500 to 600 employees will be accommodated in the new office building. In addition,

the City's tax base would be strengthened as commercial buildings generate 3.6 times the municipal

taxes as compared to residential buildings. Office buildings support local retail businesses.

• The office building offers significant synergies with the Civic Facility. Parking can be shared and

used for after-hours use by the theatre and ballroom components. The office space will generate

demand for revenue-generating meeting spaces. The Civic Facility offers amenities to the office

building, helping it attract quality employers to New Westminster.

• UPG is a New Westminster based developer and owner of f irst class office and retail buildings.

Established in 1987, the company has extensive experience in building, leasing, and managing office

buildings in New Westminster and Vancouver.

Most recently UPG developed Metro Vancouver's first LEED Gold offi ce building. The company is

known for its ability to attract high quality tenants to its office and reta il properties, and for

reinvesting into its properties to maintain them as 'best in class'.

UPG has teamed up with PCL Constructors Westcoast (PCL), Musson Cattell Mackey (MCM)

architects, and Read Jones Christofferson (RJC) structural engineers to provide an experienced and

talented project team.

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EXPRESSION OF INTEREST

Expression of Interest- May 2010 New Westminster Multi Use Civ1c Facility

UPG Property Group

The site acquired by the City of New Westminster for its new Multi-Use Civic Facility ("Civic Centre") is a

high profile site, and represents a unique development opportunity. Together with the new developments

located nearby, it anchors Columbia Street, once known as the Golden Mile. The assembly of the various

lots creates a site large enough to support not only the Civic Centre. but also a significant, first class office

building.

UPG Property Group understands the New Westminster office market. Drawing from 20 years of

experience in developing, leasing, and managing office buildings in the city, we recognize this as a site

where adding a new office tower is a viable option . We express our interest in working with the City. We

see ou r involvement not only in contributing on a short-term basis as the development partner in this

project, but also on a long-term basis as an active participant and contributor to the economic vitality of

the Downtown area as the owner and manager of the proposed office building.

The site is well suited for the City's new Civic Centre due to its proximity to SkyTrain and the waterfront, its

centrality in the City, and its strategic location in the Downtown. The same values hold true for a high

qual ity office building. Like the Civic Centre, the office building has the potential to draw from a larger

regional market, attracting people and businesses to New Westminster.

The development has the potential to become a focal point and catalyst for the cont inued rejuvenation of

the Downtown area.

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OUR VISION

Expression of Interest- May 2010 New Westmmster Multi Use Civ1c Facility

UPG Property Group

It is our vision to compliment the City's multi use civic facility with a significant office building which will

support permanent employment in the City and strengthen the economic base of Columbia Street.

The Civic Centre component will occupy the prominent Columbia Street facade. Featuring a t raditional

design with stone and brick cladding, it will respect and compliment the historic character of Columbia

Street. It is envisioned that the Civic Centre will accommodate a number of civic functions over the lower 4

floors of the building in large and efficient floor plates occupying the majority of the site.

The office building will rise approximately · t? l/ )~floors above the 4 storey podium of the civic facility and

offer approximately · t ? e'l) rf') sq uare feet of class A office space. The entrance to the office

building will be located around the corner on Eighth Street with a separate entrance lobby at street level.

The office component is envisioned to be a modern office building featuring primarily an aluminum and

glass curtain wall system. The office building will be sit ed toward the westerly half of the site to maximize

views toward the Fraser River, and to maximize the distance between adjacent buildings.

PARTICULARS

Civic Centre

The ground floor of the project is envisioned to accommodate the Civic Centre entrance foyer, the

municipal museum, and a significant street-front retail component. In approximate numbers, the Civic

Centre entrance will measure approximately 5,000 square feet in size and be multiple storeys in height to

give it not only a dominant street presence, but also a breath-taking entrance experience to the Civic

facilities on the upper floors connected via a set of escalators.

The retai l space would face both Columbia and Eighth Streets and be approximat ely 10,000 square feet in

size in order to be able to attract a well known high quality restaurant operator as well as several smaller

retailers such as a coffee shop. These uses will compliment both components of the development. The

retail space will feature high cei lings commensurate with a development of t his quality and sca le.

The upper f loors of the Civic Centre are envisioned to accommodate the banquet room, meeting spaces,

the non-proscenium theatre space, and arts and community uses.

Office Building

The office building will have a separate entrance lobby on Eighth Street, facing the SkyTrain station, so as

not to compete with the Civic Centre for Columbia Street prominence. This frontage on Eighth Street, as

well as the proposed setback for the upper floors from Columbia, also allows the office building to take on

a more modern design.

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Expression of Interest- May 2010 New Westminst er Mult1 Use Civic Faci lity

UPG Property Group

The office building will be designed to compete regionally for large office users including government and

the private sector employers. The building will be a first class (class A) office development comparable to

the newest office buildings in downtown Vancouver, featuring high ceilings, floor to ceiling glass, and

modern building systems.

Parking is to be provided underground as soil conditions permit. A combination of above and below

ground parking may be required . If so, an additional parking level and the loading facilities (off Alexander t?t't)l"~)

Street) can be accommodated on the 2"d level. Approximately parking stalls are needed to make the

office project economically viable. This parking can be shared with the Civic Centre uses, providing much

more parking to the Civic Centre than would otherwise be available.

ENVIRONMENTAL SUSTAINABILITY

The building is envisioned to be designed to LEED Gold standards for environmental sustainability and

energy efficient design. UPG has specific experience in developing to LEED standards, having recently

developed the first office building in Metro Vancouver that achieved LEED Gold (Westminster Centre

South).

High performance glazing, highly efficient building systems, and modern building controls reduce energy

consumption. Water conservation is enhanced with modern fixtures and equipment.

With floor to ceiling glazing, all workspaces designed to be in proximity to the exterior walls, daylight

penetration is increased and the interior spaces are designed to be highly liveable.

HISTORICAL SIGNIFICANCE

UPG recognizes that, while no prominent buildings are located on the site itself, its location and the

immediate area is historically significant. The CP Rail station and the terminus for the Interurban

streetcars were located at this intersection. Eighth Street provided immediate access to the docks on the

river and the local market that wa s located on the waterfront. In its prime, the site anchored the 'Golden

Mile', when retail shops along Columbia Street were a regional draw. Over the years, the site itself housed

well known retailers such as Cunningham Hardware and Zieglers. This particular block was the location of

the first Overwaitea food store, and the second london Drugs store in the history of these successful BC

based retail chains.

It would be an important aspect of this project to feature the historical significance of the immediate area.

The traditional design of the facade and the museum housed within the complex are the obviou s means.

Historical displays and images can be incorporated in various interior and ext erior spaces. The building

name can also provide a link to an appropriate historical reference.

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BENEFITS OF OFFICE

Expression of Interest- May 2010 New Westminster Mul ti Use Civic Facility

UPG Property Group

The development of a significant office building offers very distinct and measurable benefits to New

Westminster. As compared to adding a resident ia l tower, an office building would contribute to the well

being of our community in the following ways.

1. Build a Complete Community

New Westminster is a great place to live, play and work. But while the population continues to

grow, particularly in the Downtown, the number of well paying jobs has been decreasing. Quality

commercial space is needed to avoid downtown New Westminster turning into a bedroom

community. This office building is a significant step toward the goal of building a complete

community.

2. Attract and Retain Employment

Office buildings support permanent and high quality employment in the City. At an estimated size

of · t ?(',) r-r:) square feet, the office building will accommodate approximately 500 to 600

persons.

3. Increase the Tax Base

The mill rate for office buildings is 3.6 t imes the rate of taxat ion for residential use. As such, an

office building would generate significantly higher taxes than a residential development, and

would help offset the cost of operating the Civic Centre.

4. Support Local Retail

Office buildings, through the employment they attract, support the surrounding retail stores,

restaurants and service retailers. Due to its greater occupancy load, an office building

accommodates three times as many occupants as an equivalent sized residential building.

5. Allow for Potential Expansion and Co-location

The office building creates an opportunity to expand the Civic Centre into the lower floors of the

office building should such expansion be sought by the City in the future. Also, if synergies exist to

locate other civi c departments close to the Civic Centre, this office building may allow such co­

location.

UNIQUE OPPORTUNITY

The site offers a unique opportunity to add office space to New Westminster's downtown. While high rise

residential developments can be located at numerous potential sites in the Downtown, fi rst class office

buildings require specific locational attributes to be successful. No other assembled sites exist in the

Downtown area that provides the same qualities for potential office use as the subject site. This may well

be the only site to make an office building economically viable in the foreseeable future.

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SYNERGIES

Expression of Interest - May 2010 New Westminster Multi Use Civic Facil ity

UPG Property Group

An office building is fully compatible with and, in fact, complimentary to the Civic Centre. Synergies

include the following:

1. Parking can be shared. Parking allocated to the office building can be used after-hours for Civic

Centre use {i .e. theatre). When parking demand is highest for the Civic Centre, the demand is

lowest for the office building.

2. The office building will generate demand for the meeting faci lities in the Civic Centre. The

businesses in the office building are a captive market for generating rental revenues for the Civic

Centre.

3. The Civic Centre is an amenity for the office build ing, supporting the success of the office building

in attracting quality employers to the City.

An office building is well positioned to peacefully co-exist with the Civic Centre. An office building

operates at different hours as the theatre and thus no conflicts are likely to arise as to noise, crowds,

traffic, or other impacts generated by operating the theatre.

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OUR TEAM

Expression of Interest- May 2010 New Westminster Multi Use Civic Facili ty

UPG Property Group

For this project, UPG has teamed up with PCL Constructors Westcoast Inc., Musson Cattell Mackey

Partnership architects (MCM), and Read Jones Christofferson (RJC) st ructural engineers. UPG has

significant experience with working with these firms on commercial proj ects.

PCL PCL Constructors Westcoast Inc. is one of Western Canada' s leading construction companies.

PCL's expertise spans the inst itutional, commercial, health care, civil and industrial sectors.

Recent projects includes the Vancouver Convention Cen tre expansion, the Vancouver

International Airport Pier C expansion and the City of North Vancouver Library. In New

Westminster, PCL recently completed the Starlight Casino and the Westminster Centre South

office building. PCL was the contractor for Central City Office Tower in Surrey, the Terminal City

Club in Vancouver, Okanagan College, River Rock Casino, and Library Square (Vancouver ma in

library}.

The company has extensive experience working in dense urban environments and on complex

mixed-use projects. It is an industry leader in work safety.

MCM Musson Cattell Mackey Partnership is a leading Vancouver based architectural fi rm. Its practice

includes commercial, residential, institutional and hospitality projects.

The firm's expertise in design ing office buildings is second to none in Western Canada. Over the

years, MCM has designed many of downtown Vancouver's most prominent buildings, including

Bentall 5, Waterfront Centre (office, hotel, and retail), and PricewaterhouseCoopers Place.

MCM's expertise extends to mixed-use complexes and hospitality. MCM was the lead design firm

for the new recent Vancouver Convention Centre expansion, and the architect for the Terminal

City Club in Vancouver, combining hospitality, retai l, residential and office.

MCM worked together with PCL on the Vancouver Convention Centre, the Abbotsford Hospital,

and, more locally, Westminster Centre South.

RJC Read Jones Christofferson is a full service structural engineering firm. Its past experience includes

various Civic and Community Centres such as the Surrey Civic Centre, Abbotsford Cultural Centre

and Hillcrest Park Community Centre (Vancouver Olympic Centre).

RJC worked with MCM on the Bentall 5 and PricewaterhouseCoopers Place office towers. It was

the structural consultant for the City of North Vancouver Library, Library Square (Vancouver) and

the recently completed Robert Lee YMCA Redevelopment Project (Patina residential high-rise) on

Burrard Street in Vancouver.

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• CORPORATION OF THE CITY OF NEW WESTMINSTER

September 3, 2010

Bart Slotman UPG Property Group Inc. 330- 555 Sixth Street New Westminster, BC V3L 5Hl E-mail: [email protected]

Dear Mr. Slotman:

Re: Request for Proposal #NWRFP-10-17 Multi-Use Civic Facility with Commercial Use Tower- Developer Participation

We have reviewed and evaluated your Request for Proposal submission, and are pleased to inform you that in closed session on August 30, 2010, Mayor and Council endorsed the Proposal in principal with the proviso that Staff work with Uptown Property Group to resolve the points of difference discussed to date. The City is hopeful that these issues can be resolved in the coming weeks so that the general parameters of the project are agreed to in principal.

In addition, the City envisions that over the next two months both UPG's architects and the City' s contracted architects would work together to achieve a mutual design concept that meets both the City's and UPG's expectations for design, functionality and budget limit of$35 million. During this period, the City and UPG would also endeavour to finalize other key details respecting the project. The City considers this process critical to its detennination of the compatibility ofthe overall project and would therefore not be subject to any ' ?O)c~) as denoted in your Proposal.

For clarity, this letter is not acceptance of your proposal and no contractual obligations shall arise between the City and UPG until a formal written agreement is reached with respect to this project.

The City looks forward to working with your firm on this important project to the City's Downtown streetscape.

I you have any questions or concerns please do not hesitate to contact me.

Yours ~J_r 4.. _,A.r-'-----­Roy Moulder, SCMP Manager, Purchasing Tel: 604-527-4525 email: [email protected]

cc. P. Daminato, City Administrator L. Spitale, Director of Development Services

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NEW \NESTMINSTER

September 28,2010

Mr. Bart Slotman Vice President UPG Property Group 330 -555 Sixth Street New Westminster, B.C. V3L SHl

Dear ~an: &vr--Re: City of New Westminster Multi Use Civic Facility and Office Tower Proposal with

Uptown Property Group CUPG) - Interim Agreement

At the September 24, 2010 Closed meeting ofNew Westminster City Council, Council approved the following motion:

THAT Council instruct staff to issue the Interim Agreement and continue with the resolution of the six conditions as outlined in this staff report.

Our Solicitor, Michael Quattrocchi from Young, Anderson has been in. contact with your Solicitor, Don Cooper from Davis and Company to discuss the conditions in the Interim Agreement.

As part of the two month due diligence process with the Interim Agreement, the City of New Westminster and UPG will continue to work through the issues pertaining to the six conditions. The six overall conditions are:

1. Parking 2. Design, Layout and Identity 3. Uses on the Main Floor 4. Procurement 5. Market Value 6. Other Financial and Business Arrangements

CONDITION ONE- PARKING

There are two issues pertaining to parking: UPG's actual number of parking provided; and the terms and conditions in an operating agreement.

Corporation of the City of New Wrst minster 51 1 ~oyai Avr nu ~. rJt. ,·,\·:, .•mimttr BC V,l lHS:

T 604-5<'.371' F f :·~52 1 . ; f~5 f • llfo~u nc, .- ::est CI 1y.\n

www.newwestcity.ca 000 )11

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Actual Number ofParking Spaces

UPG is proposing to construct parking spaces for their office tenant use in an office building of up to 130,000 square feet. UPG is proposing to allow civic centre users access to these s n·r,~,-:c)

parking spaces during non-office hours. It is my understanding that there is consensus between the City of New Westminster and UPG on the number of parking spaces UPG will provide.

Terms and Conditions in an Operating Agreement 5 ' 7t'•)(C)

UPG is proposing to allow civic centre ~sers access to these parking spaces during non-office hours as they become available. Office hours are g~I}~~~~ assumed as 7 am to 5 pm Monday to Friday. Civic centre users would access UPG's · ·spaces from 5 pm to midnight Monday to Friday and Saturday to Sunday from 7 am to midnight (subject to further refinement in the Operating Agreement). It is my understanding that there is consensus between the City of New Westminster and UPG on this point.

s ,-,. c'•.Xt:.l

UPG's proposal is to allow civic centre users access to UPG's . parking spaces as paid parking. . s ';;o(,) c~="J The issue of possible

s ':;. ,, X,:::J between the City and UPG will be addressed as a valuation issue in Condition Five.

The City ofNew Westminster will be required to add additional Barking from the existing spaces provided by UPG. The Cit,y is considering adding 5

' ..,.fpi~s. The City parking spaces will form level Pl. UPG's5

'7

,...1>pirking spaces will form Jevels P2 and P3. It is recognized that

the c.ivic centre parking will be separated from the office parking by way of an overhead gate. Office users would access their spaces with a parking pass. The majority of parking stalls will be kept on a ' .s t?O)(f) basis. It is my understanding that there is consensus between the City of New Westminster and UPG on this point.

Further terms and conditions are needed to determine civic centre use during the weekday when space is available in the P2 and P3 levels. This work is in progress.

CONDITON TWO- DESIGN, LAYOUT AND IDENTITY

Work under this condition is in progress.

CONDITION THREE- USES ON THE MAIN (&SECOND) FLOORS

Work under this condition is in progress.

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CONDITION FOUR- PROCUREMENT

Work under this condition is in progress.

CONDITION FIVE- MARKET VALUE

Work under this condition is in progress.

CONDITON SIX- OTHER FINANCIAL AND BUSINESS ARRANGEMENTS

No Build Covenant

UPG's proposal asks that the City place a no-build covenant above the theatre portion of the multi use civic facilitv.

.s t/t't)cF)

Expansion Opportunities

Given the structural limitations to construct above the theatre space, if the City ofNew Westminster wishes to consider expansion opportunities, the City would like a 5 r ::> t'1) ff:".J

:; 1?1';)(~) clause in the agreement.

S r 7 ('r ) ( t=')

UPG proposes that the City ofNew Westminster enter into a covenant J ' ? o ; a)

office tower ; , ? t"t)(r ) .. Legally, a City Council cannot fetter a future City Council, therefore, this request cannot be met. The City ofNew Westminster recommends that the solicitors for both parties explore whether there is some other mutually acceptable way to address UPG's concerns, though it should be recognized that this may not be achievable. The Partnership Agreement should set out conditions if the City :rt ?r' >(".C) . It is my understanding that there is consensus between the City of New Westminster and UPG on this point.

S I "7 ( 1 )(",C)

· Jt is my understanding that there is consensus between the City of New Westminster and UPC:i on this point.

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UPG is proposing to offer an additional sori)t"F) to go towards landscaping of the site to create a pleasant small plaza as an interim solution while the City determines a future use for the site. It is my understanding that there is consensus between the City of New Westminster and UPG on this point.

UPG is proposing that a public art offering of three large panels depicting the famous photo "Wait for me Daddy" be placed on the 801 Columbia Street plaza. The City thanks UPG for this public art offering and asks that a financial contribution be made to the existing City initiative commemorating this famous photo.

Restrictive Covenants

Work under this condition is in progress.

UPG proposes that the City ofNew Westminster · · s t 7t:'t ) !' f:)

After meeting with city staff, UPG no longer seeks this condition. It is my understanding that there is consensus between the City of New Westminster and UPG on this point.

UPG is requesting that Work ' under this issue is in progress.

Mr. Slotman, I trust that all major issues have been identified in this letter. It is my hope that you provide me with a follow up letter which either agrees with the conclusions made in each condition or stipulates where further refinement is necessary.

I look forward to your response.

Kind Regards,

Lisa Spitale Director of Development Services

cc. Paul Daminato, City Administrator Gary Holowatiuk, Director of Finance & Information Technology Joanne Edey-Nicoll, Assistant Director of Parks, Culture & Recreation Michael Quattrocchi, Young Anderson

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The Corporation of the City of New Westminster 511 Royal Avenue New Westminster, B.C. V3L 1H9

Attention: Lisa Spitale, Gary Holowatiuk and Paul Daminato

Dear Lisa, Gary and Paul:

Re: Cost Determination and Allocation Process

UPTOWN PROPERTY GROUP

October 18, 2010

Delivered by e-mail and courier

Mufti Use Civic Facilitv ("MUCFH) and Office Tower proposal (the "Project")

As referred to in separate discussions and meetings between myself and Lisa, and Alan Leong and Gary, we have concerns regarding the cost estimates s ~-z (<.) r<;J) :::, :2?. (<)(J...J in the draft budget materials s <<.<'<..) c

9) s&("2){h) topresenttoCouncilonOctober18,2010. Weareofthe

opinion that some of the estimated costs are s 2 '- c- 2 ) <..9J s 2 , <: ,yJ,) regarding the allocation of certain costs (particularly parking structure costs) to the parties.

Please ensure that our concerns are expressed to Council at the time that it considers s ":2Z rz>().,)

report, as we do not wish to raise expectations of the City Council that we have participated in or agreed to such a _;~~~ ~V.J' process. We understand that some of the numbers being used are

As we have advised, we wish to openly and transparently price the entire project and its components and conclude a project budget jointly with the City regarding same. We will then negotiate with the City the fair and equitable allocation of the costs to the three components of the project, being the parking

structure, the MUCF and the Office Tower.

Both parties recognize the importance of the cost determination and allocation process. Before we proceed with incurring significant project design and tendering costs, we each require a process that is fair, equitable and transparent, to facilitate agreement on the Project budget and establish a baseline of reliable costs against which the fixed price tender costs can be compared and allocated.

UPG Property Group Inc.

330 - 555 Sixth Street New Westminster. BC · Canada V3L 5H1

T 604 525 8866 F 604 525 1387

www.uptownpropertygroup.com

Page 21: FOI documents re: UPG agreement with City

-2-

UPTOWN PROPERTY GROUP

We are proposing for your consideration, the cost determination and allocation process described below, which we would like to incorporate into a Cost Determination and Allocation Agreement.

1. Establish Baseline Base Building Pricing Model with PCL

a) Update Base Building Drawings

We und~rstsu;-sf ,that the City has now approved the Option 5 Layout of its architect for the MUCF, .;. j ,, ,,, ~.) plus parking stalls of additional underground parking, which will necessitate 3 rather than 2 levels of parking. PCL has already provided detailed pricing on the initial Musson Cattell Mackey base building drawings of the MUCF, but without the additional level of parking. UPG will instruct Musson Cattell Mackey to update the drawings for the entire building (the "Building") to include the 3 levels of parking, the Office Tower and incorporate the Option 5 Layout for the MUCF (the "Option 5 Drawings").

b) Re-price Parking structure, MUCF and Office Tower

Once the Option 5 Drawings are prepared, UPG will cause PCL to re-price the entire Building (the "PCL Baseline") based on the Option 5 Drawings. The City will have the opportunity to participate in the establishment of the PCL Baseline, which will be used to equitably allocate the share of costs t-o the Parking structure, MUCF and Office Tower components of the Building.

c) Budget

Using the PCL Baseline, the parties will f inalize a budget (the "Base Building Budget"), including hard construction costs, soft costs, contingencies and a s 1? cr) r P) for the construction of the base building elements of the Building (collectively the "Total Base Building Costs"). Each party will separately budget for its own purposes the cost of outfitting the MUCF and the Office Tower, as applicable.

d) Allocate Base Building Budget

The parties will mutually agree on a fair and equitable basis to the allocation of the costs in the Base Building Budget to the Parking structure, MUCF and Office Tower, as a percentage that each component bears of the Total Base Building Costs. In general terms, the City will be responsible for the MUCF costs and UPG will be responsible for the Office Tower costs. The parties will also agree on the respective proportionate shares of each in the costs of the Parking structure and related costs, such as site works and off site improvements. These percentage allocations (the "Percentage Allocations") will form the basis for the allocation of fixed price bids to the respective three components, and the proportionate share of the City and UPG to the Parking component, after completion of the tender process.

www.uptownpropertygroup.com OO OJ1o

Page 22: FOI documents re: UPG agreement with City

~ 3-

UPTOWN PROPERTY GROUP

2. Bid Process

a) Tender Bids

UPG will submit the Project to tender on a fixed cost basis. UPG will short list bid candidates and provide the list to the City for review and approval. The City, acting reasonably, can eliminate any bid candidate proposed by UPG if it has a valid reason as to why such bid candidate should not be given the opportunity to bid. Preference will be given to bid candidates with the required experience and understanding of the local conditions applicable to their discipline as it applies to the Project. Upon receipt of the bids, UPG will provide them to the City for joint consideration, with a recommendation as to which bids UPG prefers and a summary of the total costs of such bids. UPG and the City, each acting reasonably, will meet to review the bids and to agree on the selection of the successful bidders. In the case the parties are unable to agree, UPG, acting reasonably, and after providing written reasons, will select the successful bid in each category. The lowest bid will not necessarily be chosen in every instance, if there are justifiable reasons for UPG to select another bid.

b) Summarize Bid Costs

Upon the completion of the selection of the successful bidders to whom the parties propose to award contracts if the Project is to proceed, UPG will:

i) summarize and total the bid costs (the ''Total Bid Costs") and compare them on a line by line basis with the Base Building Budget and the costs allocated to each component of the Building;

ii) multiply the Total Bid Costs by the applicable Allocation Percentages, to calculate the proportionate share of the Total Bid Costs to the Office Tower (the "Office Tower Bid Costs"), MUCF (the "MUCF Bid Costs") and the Parking structure components of the Building, and the respective shares of the parties in the Parking structure costs (the "City Parking Bid Costs" and the "UPG Parking Bid Costs", respectively);

iii) provide the City with a spread sheet (the "Bid Cost Summary'') summarising the Office Tower Bid Costs, MUCF Bid Costs, City Parking Bid Costs and UPG Bid Costs. If the Bid Cost Summary is a correct calculation of the allocation of the Total Bid Costs using the applicable Allocation Percentages, the City and UPG will be deemed to have approved the Bid Cost Summary,

subject to the

The deemed approval of the Bid Cost Summary will not commit either party to participate in the Project if other conditions as to participation in the Project specified by such party in other Project agreements between the parties (the "Project Conditions") have not been satisfied.

www.uptownpropertygroup.com 0 0 0 J l .. ,

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UPTOWN PROPERTY GROUP

c) Payment of Allocated Bid Costs

If the parties approve the Bid Cost Summary and the Project Conditions have been satisfied, the parties will pay their allocated shares of the Total Bid Costs in accordance with 2(b)(iii) above, subject to adjustments for the following:

i) additional costs to either party caused by change orders initiated by one of them will be allocated by UPG to and be paid by the party originating the change order;

ii) additional costs caused by errors on drawings will be allocated by UPG to the MUCF, Office Tower or Parking structure component affected by such error(s) on a fair and equitable basis and paid by the applicable party or parties; and

iii) additional costs caused by cost overruns for any unforeseen items not covered by a fixed cost construction contract, if applicable, will be attributed by UPG to the MUCF, Office Tower or Parking structure component to which such cost overruns apply on a fair and equitable basis, and paid by the applicable party or parties.

3. Dispute Resolution

P.rior to the commencement of construction the parties will appoint an independent referee with experience in construction of commercial buildings to resolve any disagreements or disputes regarding the allocation of costs after the commencement of construction. All decisions of the independent referee will be made on a fair and equitable basis and will be final and binding on the parties. The costs of the independent referee will be paid for equally by the parties.

We hope the steps described above will provide the City with the comfort necessary to proceed with confidence to the cost determination and allocation process.

Yours truly,

UPG Property Group Inc.

Vice President

www.uptownpropertygroup.com

000 )18

Page 24: FOI documents re: UPG agreement with City

~:"'"'f NEW WESTMINSTER ,K ................. ~ · Administration

December 21, 2010

Mr. Bart Slotman

Vice President

UPG Property Group Inc.

1101 - 900 West Hastings Street

Vancouver, BC V6C 1ES

(via email; hard copy to follow)

'\SL._"\-Dear Mr. -5klt.!ran,

Re: DAC Funding for the Multi Use Civic Facility

I have attached two letters of correspondence dealing w ith DAC funding for the proposed Multi Use

Civic Facility. The first letter (dated October 8, 2010) is from the City to the Ministry of Public Safety and

Solicitor General seeking confirmation that the proposed project involving UPG is compatible with DAC

principles.

The second letter is the response from the Province (dated December 2, 2010). To paraphrase the

response from the Province, they do not recognize the private development portion of the project.

Their only concern is the Civic Facility and they are making it clear that the City will only be reimbursed

for Civic Facility costs.

As a follow up to the letter received from the Province, the City held a telephone conference with the

Ministry staff responsible for DAC projects. The following points were clarified:

• main concern ofthe Province is to ensure that no developer costs are invoiced for DAC funding

• the Province understands the base building will be constructed by the developer and that the City

will be undertaking rigorous review of the developer's invoices before they are forwarded to the

Province for payment- this is satisfactory to the Province

• the Province does not have concerns w ith the MUCF square foot area being larger than estimated in

2007

Office of the City Administrator 511 Royal Avenue. New Westminster. B.C. V3L 1H9

Telephone: 604·527-4551 Fax: 604-527·4599 Email: [email protected]

OOO Jt D

Page 25: FOI documents re: UPG agreement with City

... 2

• the Provin~e does not have concerns with the City constructing less parking than anticipated in the

original project estimates

• It was agreed that the Director of Finance and IT and appropriate staff will meet with Ministry staff

early in the new year to ensure that appropriate DAC claims reporting procedures are in place.

In conclusion, the Province has no objections to the City involving UPG and their proposed office tower

in the project. They will hold the City's 'feet to the fire' with respect to accurate invoicing and project

deadlines (this is similar to what the City has experienced with other DAC projects).

The City believes this letter and attachments now satisfy Clause 7 (b) City Responsibility Basis under the

proposed Cost Recovery Agreement, making the clause redundant.

Please let me know if you have any questions regarding the above.

y\\] ~ Paul Daminato

City Administrator

cc: M UCF Project Team

Office of the City Administrator 511 Royal Avenue. New Westminster. B.C. V3L 1H9

Telephone: 604-527-4551 Fax: 604-527-4599 Email: [email protected]

Page 26: FOI documents re: UPG agreement with City

d? ~

NEW WESTMINSTER

October 8, 2010

Catherine Davidson Senior Policy and Legislation Analyst Gaming Policy and Enforcement Branch PO BOX 9311 STN PROV GOVT Victoria, BC V8W9Nl

Dear Ms. Davidson:

File: 1130.20

Re: Development Assistance Compensation - Prioritv 2, City o(New Westminster

I am writing this letter to provide additional information on the City' s progress on Development Assistance Compensation (DAC) Priority 2, Multi Use Civic Facility. In a letter dated February 16, 2010, the City provided the Province with an update regarding the first three DAC priority projects.

As follow up to the City' s February 16,2010 letter and the results of the Expression of Interest process, the City of New Westminster is currently working with a development company, the Uptown Property Group (UPG) regarding a possible joint building arrangement. UPG is proposing to construct as '7'~)aJ square foot Class A office tower over the City's 85,000 square foot Multi Use Civic Facility.

Financing for the UPG's office tower will be independent and not related to the City's DAC funding source. The City' s $35 million allocation in DAC Priority 2 will finance a Multi Use Civic Facility building that is approximately 85,000 square feet and will include a convention centre, a non-proscenium theatre, the new home of the New Westminster museum and archives, an arts centre and 50 underground parking spaces.

Corporat ion of the City of New West minster ~n f-oy~l \1, nu,, NC'\ . W1 ; tmmslft s: 'v~i tHg

T be 4 S ~' 3711 F fo4 521 j895 E infr.@1ne ,, .. ,5t;:1tyco

www.newwestcity.ca OOO J2l

Page 27: FOI documents re: UPG agreement with City

The City of New Westminster has done considerable work in the concept design and programming elements for the Multi Use Civic Facility. A concept plan from our architects, HCMA, is included with this letter- see Attachment A. A detailed Functional Program has been prepared by our consultant, Beck and Associates, and is included as Attachment B. Design and functional considerations for the convention centre have been prepared by our consultant Heard Consulting -see Attachment C.

Regarding the City's process with the developer, the City of New Westminster has signed $ a non-binding Interim Agreement with UPG. If the City decides to proceed further with the developer, the City will enter into a legally binding Joint Building Agreement with ~ UPG in November 2010. ·

As part of the City's decision making process, the City of New Westminster requires written confmnation from the Province that the concept plan, programming components and proposed arrangement with the developer is compatible with the DAC principles.

The City of New Westminster would be pleased to discuss any questions or comments you may have regarding DAC Priority 2.

Yours Truly,

C:.t:~ Director of Development Services City ofNew Westminster

Att. (3)

cc. Paul Daminato, City Administrator Dean Gibson, Director of Parks, Culture and Recreation Gary Holowatiuk, Director of Finance and lnfonnation Technology Jim Lowrie, Director of Engineering

Page 28: FOI documents re: UPG agreement with City

Q-~

. .

BRITISH COLUMBIA

The Besr Place on Earth

December 2, 2010

Ms. Lisa Spitale Director of Development Services City of New Westminster [email protected]

Dear Ms. Spitale:

Know your limit, play within it.

Log# 453385

} am responding to your inquiries since October 2010, and further to my November 24, 2010 email to you, concerning the City of New Westminster's intention to enter into a legally binding Joint Building Agreement with an office developer that will result in a construction project that will be connected to priority project #2 (Downtown Multi-Use Civic Facility) which comprises part of the December 10, 2007 Destination Casino Project Development Amendment ("DAC") Agreement ("the DAC project").

As noted in my emaiJ, the City should not presume any agreement by the Province that the concept you have outlined complies with DAC principles. Essentially, the Province understands the City intends to enter into agreements with a third party or third parties to complete a second (non-DAC) project, comprised primariJy of an office tower to be constructed at the same location and~ to some extent concurrently with, the DAC project which has qualified for DAC funding noted above.

The Province cannot confirm the appropriateness of the new project or its consistency with DAC principles. Further, the Province cannot confirm that a decision by the City to enter into the proposed agreement will not negatively impact the circumstances related to funding of the DAC project.

Only the original approved DAC project and its component elements will qualify for any DAC funding. It is clearly up to the City to ensure that the two projects are kept sufficiently separate for all purposes related to the DAC agreement and the approval of proposed eligible expenses under the DAC agreement. Strict compliance with all of the reporting and other requirements set out in clauses 26 through 35 of the DAC agreement must be adhered to in order to ensure that only eligible costs approved by the Province are reimbursed. The onus will be upon the City to ensure that its records are maintained in a form and content satisfactory to the Province. These will also need to be submitted in a timely manner as required under the DAC agreement.

Ministry of Public Safety and Solicitor General

Gaming Policy and Enforcement Assistant Deputy Minister's Office

Mailing Address: PO BOX 9311 STN PROV GOVT VICTORIA BC V8W 9N1 Telephone: (260) 387-1301 Facsimile: (260) 387·1818

... /2

Location: Third Floor, 910 Government Street Victoria. BC

Web: www.h8d.gov.bc.ca/gaming

I I I

0 0 0 .) ~ ) '"~! ' .•J d l

l

Page 29: FOI documents re: UPG agreement with City

For certainty, the Province will not consider. permit or accept any changes in respect to agreed timelines and deadlines related to the completion of DAC project which may arise as a result of the fact the City has chosen to add the non-DAC project. Any financial or other damage or expenses that may impact the DAC project as a result of delays, incidents, accidents, work stoppages, financial issues or any other causes relating to the non-DAC project will not be approved as additional eligible costs under the DAC agreement.

While the Province will use all reasonableness, it will be at the sole discretion. of the Province to review and assess information provided by the City and ensure eligibility for DAC funding.

Sincerely,

\trn_. Derek Sturko Assistant Deputy Minister

pc: Gary Holowatiuk Paul Darninato Mike Quattrocchi Adam McKinnon

000 )i~ 4

i I I l ! I !

I I

I

Page 30: FOI documents re: UPG agreement with City

UPTOWN PROPERTY GROUP

Corporation of the City of New Westminster 511 Royal Avenue New Westminster, BC V3L 1H9

Attention: Paul Daminato and Lisa Spitale

Dear Paul and Lisa:

December 23, 2010

By E-mail and regular mail

Re: Awarding of Contracts to Consultants - MUCF and Office Project

It has come to our attention at the Project design meeting this morning that the • s -n. < <.)c'" l-,)

s -:>. "2.. , 2) ( ~,) has been meeting directly with the electrical and mechanical consultants for the Project without our knowledge or approval.

In addition, Bart Slotman was advised at the design meeting by z- :a. 2 <":a)< h) that the City had awarded contracts to these consultants, again without the knowledge or approval of UPG. Bart then contacted Roy Moulder of the City, who confirmed that the contract award letters were on his desk and were to be sent out today. It is our understanding that Mr. Moulder will hold these contract letters until this issue is resolved.

y.Je were absolutely dumbfounded to learn that the City would have issued contracts without our knowledge and approval, which by necessity will require base building work. B ta · this action the City is violating settled terms of the Memorandum of Understanding we are trying to. finalize. It also goes agams under5tandmg of the pait1es throughout our d1scussions that OPG and s 2Gt'2)(J.) will be the Project Manager for the base building components of the Project. Further, It Is disrespectful in the extreme to UPG as the Office Tower partner and Project Manager.

By awarding contracts for the fit out the City is also effectively awarding contracts for the base building. We have made it clear that UPG is not prepared to accept responsibility for any base building consultants' fees until the parties have signed the r1emorandum of Understanding and the Cost Recovery Agreement. The fact that these agreements remain outstanding is not the fault of UPG.

S <-Z (Q. J (h)

We request a written explanation of these actions and how the City proposes to rectify matters.

Sincerely yours,

UPG Property Group Inc.

1101 - 900 West Hastings St reet Vancouver. BC • Canada V6C 1E5

T 604 688 7900 F 604 688 7930

Alan K.W. Leong

www.uptownpropertygroup.com 0 0 0 ;) ~) r.· r.J ,....~ . )

Page 31: FOI documents re: UPG agreement with City

NEW WESTMINSTER Administration

January 26, 2011

Alan Leong

UPG Property Group Inc.

1101 - 900 West Hastings Street

Vancouver, B.C. V6C lES

via email

Dear Alan:

Re: Consultant Costs - MUCF- Cost Recovery Agreement

As discussed at our meeting on January 19, 2011, the City wishes to engage the project consultants as

required at this time to complete the schematic drawings for the MUCF as soon as possible. This will

allow the City to have comfort with the pricing of the project in preparation for execution of the Cost

Allocation Agreement and Development Agreement.

The City understands this may skew the interim cost allocation formula at this stal'1:e in the process and $ {71'1)(/CJ $. / ;;,::'"l){i;)

has therefore agreed to your proposal to alter the formula to v... City ancl -.t. UPG. As per our

agreement the formula will be adjusted once the Cost Allocation Agreement is executed.

We do not anticipate any change orders from the consultants since the work being requested is within

their scope.

I have attached a copy of your letter with my signature.

YKJ, \J\* Paul Daminato

City Administrator

cc: City Project Team, Mike Quattrocchi, Don Cooper

Office of the a tv Administrator 511 Roval Avenue. New Westminster. B.C. V3L 1H9

Telephone: 60<1-527-4551 Fax: 604-527·4599 Email: [email protected]

Page 32: FOI documents re: UPG agreement with City

UPTOWN PROPERTY GROUP

Corporation of the City of New Westminster

511 Royal Avenue,

New Westminster, BC

V3L 1H9

Attention: Paul Daminato

Dear Paul:

Re: Consultant Costs - MUCF - Cost Recovecy Agreement

. January 20, 2011

At our meeting on January 19, 2011 you and your colleagues from the City made it clear that the· City wishes to fully engage the structural, mechanical and electrical consultants for the MUCF portion of the base building for the project immediately, despite the fact that all details of the podiwn design of the MU CF have not yet been settled, and there could be further architectural design revisions before the podium design is settled. We have expressed the concern that proceeding in this order will expose the Project to additional consulting fees as change orders, if the design subsequently changes and the consultants' work must be revised or redone to reflect the changes. You have indicated that the City is prepared to take the risk of the increased costs and has asked that we instruct the conSUltants accordmgiy.

Although we consider this to be "pre-spending" ahead of design, we are prepared to accede to your wishes on the following understandings:

1. The Cost Recovery Agree.rp~~~$3xecuted by the parties stipulates a cost sharing and funding obligation for such costs to be , UPG and >'7frY.Lj City. Since the great majority of consultant work pertains to the MUCF at this stage, we propose that the City fund 5' 7"1'F)and UPG fund sr?(J) f"C)

of the consultant costs. A review of the respective proportionate shares of the parties for these consulting costs and any catch up funding by UPG can be addressed when the Cost Allocation Agreement is finalized; and

2. If, as a result of proceeding with the consultants' work now, rather than after the MUCF design is finalized by the City, the fixed price consultants' fees increase due to changes in design instigated by the City for the MUCF, the City will be responsible for such additional fees.

UPG Property Group Inc. • .s , ? ('1 )( ~) 1101 • 900 West Hastings Street Vancouver. BC • Canada V6C 1E5

T 604 68R 7900 F 604 688 7930

www uptownpropertygroup.com

0 0 0 ,) ~1 . ' 't. ,, .-t,J '

Page 33: FOI documents re: UPG agreement with City

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UPTOWN PROPERTY GROUP

If you are in agreement with the foregoing, please sign a copy of this letter where indicated below and return same to me and we will instruct the consultants to proceed.

Yours truly,

UPG Property Group Inc.

Per: ~/{4/. ~-AlanLeong

The foregoing terms are hereby agreed to by

The Corporatio

Per: Date: January 2.b , 2011

Paul Daminato

cc Lisa Spitale

Gary Holowatiuk

Mike Quattrocchi

Don Cooper

www.uptownpropertygroup.com

0 0 0 J~~ 8

Page 34: FOI documents re: UPG agreement with City

UPTOWN PROPERTY GROUP

Corporation of the City ofNew Westminster

511 Royal Avenue,

New Westminster, BC

V3L IH9

Attention: Paul Daminato

Dear Paul:

Re: Consultant Costs - MUCF - Cost Recovery Agreement

. 1 anuary 20, 2011

At our meeting on Januacy 19,2011 you and your colleagues from the City made it clear that the City wishes to fully engage the structural, mechanical and electrical consultants for the MUCF portion of the base building for the project immediately, despite the fact that all details of the

. -

Although we consider this to be "pre-spending" ahead of design, we are prepared to accede to your wishes on the following understandings:

UPCi Property GrOUP Inc. 11 o 1 • 900 West H~$tlngs Street Vancouver. sc ·canada V6C 1ES T 604 6SR ~00 F 604 688 7930

1/(I ) ( F)

<. • ('"! )(<·:>( ·. J ( <.>) ((- )(.:.)

www.uptownpropertygroup.com

000:)51

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UPTOWN PROPERTY GROUP

If you are in agreement with the foregoing, please sign a copy of this letter where indicated below and return same to me and we will instruct the consultants to proceed.

Yours truly,

UPG Property Group Inc.

Per: ~ /( r./. ~-Alan Leong

The foregoing terms are hereby agreed to by

The Corporatio

Per:

Paul Daminato

cc Lisa Spitale

Gary Holowatiuk

Mike Quattrocchi

Don Cooper

www.uptownpropertygroup.com

Date: January 2b , 2011

000')~ 2

Page 36: FOI documents re: UPG agreement with City

.a. NEW WESTMINSTER Administration

January 26, 2011

Alan Leong

UPG Property Group Inc.

1101-900 West Hastings Street

Vancouver, B.C. V6C lES

via email

Dear Alan:

Re: Consultant Costs - MUCF- Cost Recovery Agreement

As discussed at our meeting on January 19, 2011, the City wishes to engage the project consultants as required at this time to complete the schematic drawings for the MUCF as soon as possible. This will

allow the City to have comfort with the pricing of the project in preparation for execution of the Cost

Allocation Agreement and Development Agreement.

1'7( l)(f:j

I have attached a copy of your letter with my signature.

YKJ,w Paul Daminato

City Administrator

cc: City Project Team, Mike Quattrocchi, Don Cooper

Office of the Otv Administrator 511 Roval Avenue. New Westminster. B.C. V3L 1H9

Telephone: 604-527-455_1_ Fax: 604-527-4599 Email: [email protected]

000)5'

Page 37: FOI documents re: UPG agreement with City

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NEW WESTMINSTER ~- Administration

November 8, 2011

UPG Property Group Inc. 330 - 555 Sixth Street New Westminster, BC V3L SH1

Attention: Mr. Alan Leong, Vice Chairman

Dear Alan:

The City has now had the opportunity to thoroughly review the contribution list submitted by UPG with our consultants and City Council. We are pleased to inform you that the City accepts UPG's proposed

> n rr) (1: J for the air space parcel.

City Council is offering the opportunity for you to meet with them to further the resolution of the Development Agreement if required. They have also requested representation of two Council members at Steering Committee meetings in order to assist with the resolution of issues and advancement of the project.

We look forward to continuing our Steering Committee meetings in order to resolve any outstanding matters with respect to finalizing the Development Agreement and to continue forward with the project.

\\Jy, Paul Daminato City Administrator

cc: Bart Slotman Gary Holowatiuk Steve Matheson Don Cooper Mike Quattrocchi Mayor & Council

Office of the City Administrator 511 Royal Avenue. New Westminster, B.C. Y3L 1H9

Telephone: 604-527-4551 Fax: 604-527-4599 Email: [email protected]

000 ) ~9

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November 30, 2011

UPG Property Group Inc. 330 - 555 Sixth Street New Westminster, BC V3l5Hl

Wayne Wright Mayor

Attention: Mr. Alan Leong, Vice Chair and Board of Directors, UPG Group

Dear Alan and Board:

We were very disappointed to receive your notice to withdraw from the MUCF joint project as outlined . in your letter of November 25, 2011. However, we understand these are difficult business decisions that sometimes must be made. -

We Sincerely appreciate your involvement in the project and value your contribution to the development of an outstanding building and business plan. We would like to particularly extend our appreciation to you for allowing Mr. Bart Slotman to be involved with the project and for sharing his expertise and enthusiasm with us. We would also like to thank you for your patience and understanding in working with a public partner which we realize has been a new experience for your company.

Your current holdings in the City of New Westminster are respected for their quality and valued for their contribution to our employment and rea l estate base. We hope that another opportunity may come forward in the future where we can again work together on such an exciting venture .

We wish you and your company every success in the future and thank you again.

y~~ Wayne nght Mayor

Paul Daminato City Administrator

cc: City Council

Office of the Mayor Corporation cf the City of New Westm inster

511 Royal Avenue, New Westminster, BC ·Canada V3L 1H9 T (604) 527 45 22

www.n ewwestcity.ca F (604) 527 4594

000 :)30

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BACKGROUND

MEMORANDUM OF UNDERSTANDING

between

The City of New Westminster (the "City")

and UPG Property Group Inc. ("UPG")

J

A. Following the issuance of a Request for Expressions of Interest and analysis of the responses, the City issued a request for proposals (the ''RFP,) for developer participation in the joint development of a multi-use civic facility (the "MUCF') combined in one building (the "Building") with a commercial use office tower, on the site located in the City of New Westminster on the north side of Columbia Street between gth Street on the West and Begbie Street on the East (the ''Project''). UPG submitted a proposal (the "UPG Proposal") in response to the RFP, which incorporated a Class A glass curtain wall design office tower of 6-8 floors located above the MUCF, with a minimum floor plate of 15,000 square feet per floor and total square footage of approximately 100,000 to

. 130,000 square feet (the "Office Tower'').

B. Following meetings between the City and UPG, City Council endorsed the UPG Proposal in principle, subject to some material changes requested by the City and the resolution of certain key issues identified in those meetings.

f C. The City and UPG now wish to set out their present understanding and intentions

respecting the Project, in order to confirm their mutual desire to move ahead with the Project and to facilitate the resolution of the outstanding key issues and development of a · binding Development Agreement.

1. Basic Understandings

The parties have agreed in principle to the following basic features of the Project:

(a)

\( ( 1)({)

(b) Both the UPG architect and the City architect will cooperate to ensure the integration of the exterior design of the MUCF and the Office Tower, while at the same time providing a distinct identity to each, with the main entrance to the MUCF located mid-block on Columbia Street and the main entrance to the Office Tower located mid-block on 8th Street.

Davis:7952836.9

000 ) 31

Page 43: FOI documents re: UPG agreement with City

(c)

(d)

17 ( { )(d )

I 7 (; ) ( {:)

-2-

2. Key Issues

The City and UPG consider the resolution of the following issues to be key to proceeding with the Project:

(a) Parking

17 ( t)rn

(b) Design. Layout and Identity

Davis:7952836.9

(i) The City will be responsible for the determination of the program use layout components, comprising Theatre, Conference Centre, Museum, Art Gallery, Arts Centre, Restaurant and remainder of the retail component, and their location within the 3 levels of the MUCF in a manner that integrates with the base building elements of the Building.

(ii)

(iii) ,

1 7 <'t) ( F)

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- 3-(c) Cost Sharing and Procurement

(i) I? Ct)(P )

(ii) \'?(t)r F )

(iii) 1'7 rr(~

(iv) ,., Ct)(F)

(v)

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~4~

(vi) The Project will be tendered at the appropriate time as a single project under the name of UPG and in two phases, beginning with the excavation and shoring phase.

(d) Value

(i) The City has undertaken due diligence respecting whether the transaction represents a fair market value exchange between the City and UPG and has concluded that the total value of the air space parcel interests to be

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(ii)

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(iii) 17(t)fF')

(iv' 17(1)((-J

(e) Other Financial and Business Arrangements

(i)

(ii)

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3. Pre-Construction Milestones

The parties will work in good faith toward achieving the milestones described in the Schedule of Pre-Construction Milestones attached hereto.

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-5-4. Resolution of Key Issues and Next Steps

(a) The City and UPG have been working together, and intend to continue to work together, in good faith, with a view to resolving the issues described herein and· other key issues and to enter into a Cost Recovery Agreement by

(b) The City and UPG recognize that the binding agreements for the Project may remain subject to various conditions precedent, including City approvals in its role as local government, for certain aspects of the Project, such as a zoning amendment.

(c) For clarity, this Memorandum of Understanding sets out the basic understandings reached between the City and UPG to date, however it is non-binding only and does not create any binding legal obligations between the City and UPG.

5. Counterparts and E-mail Delivery

This Memorandum of Understanding may be executed by the parties hereto or by their respective representatives on their behalf in any number of counterparts with the same effect as if' the parties hereto had all signed the same document. All counterparts of this Memorandum of Understanding shall be construed together and constitute one instrument. Either party may delivery a counterpart copy of this Memorandum of Understanding duly executed by it to the other party by e-mail, or facsimile transmission as follows:

(a) Ifto UPG:

Suite 330- 555 Sixth Street New Westminster, BC V3L 5Hl Attention: Alan Leong (email: [email protected]) and

Bart Slotman (email: [email protected]) Facsimile: (604) 5~5-1387

(b) Ifto the City:

Davis;7952836.9

5 I 1 Royal A venue New Westminster, BC V3L 1H9 Attention: Paul Daminato, Chief Administrative Officer

(email: [email protected]) and Lisa Spitale, Director of Development Services (email: LSPIT [email protected]) Facsimile: (604) 527-4511

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C!TYOFNEWWE~

au~~ Mayor:

~---~A--Clerk: ~ Name:

Date: ________ _ ---Date: JtJ.J~LCIAfj I J, 2 0 J I

0al'is:7952836.9

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~

SCHEDULE

OF

PRE-CONSTRUCTION MILESTONES

ACTMTY DATE AGREEMENT

Preliminary Architectural November 1, 2010 Cost Recovm A2reement Design. (both parties signed by January

10, 2011 retroactive to Architects settle MUCF November 1, 2010) Base Building for Option SB. • Applies to Development

Agreement. Jointly select Base Building core consultants.

City Council approves December 24, 20 I 0 MOU and Cost Recovery Agreement.

Architects complete February 28, 2011 Schematic Design by Feb 28th, 2011.

Commence Schematic Design Development by consultants (-25% of total design costs by March 1, 2011)

Commence initial pricing of Base Building for Complete initial contractor MUCF, Office and Parking pricing by by Contractor(s) and February 4, 2011 QS Consultants by January 21, 2011.

Joint Project Budget after Contractor Pricing (updated and adjusted based on final February 28, 2011 schematic design) for 3 Components, MUCF, Office, Parking.

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ACTIVITY DATE AGREEMENT

• Negotiate Cost Allocation Cost Allocation Agreement Agreement.

After Contractor Pricing to • Prior to Development

• Parties approve Cost March 15,2011 Agreement. Allocation Agreement

• Determines proportionate share of Project Costs.

• Negotiate Development March 16,2011 DeveloJ2ment Agreement Agreement and Project

Project Administration Agreement Administration Agreement By (after Cost Allocation Agreement)

April 15,2011

• Development March 31,2011 Development Agreement Approvals

• Complete detailed design Apri116- August 31 , 2011 Development Agreement and working drawings. (subject to DA being in place)

• Demolition of Existing March 1- May 31,2011 Buildings

• Excavation and Shoring in June 1,2011 Excavation and shoring contract preparation for construction in place. commencement.

• Tender construction . September 1, 2011 Development Agreement

• Close of Tenders October 1, 2011 Development Agreement

• A ward Construction October 15, 2011 Development Agreement Contract

• Commencement of November 1, 2011 Development Agreement Construction

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COSTRECOVERYAGREEMENT

THIS AGREEMENT is dated for reference and made effective as ofNovember 1, 2010 (the "Effective Date"). ·

AMONG: UPG PROPERTY GROUP INC.

AND:

THE CITY OF NEW WESTMINSTER (the "City")

BACKGROUND

A. The City is the registered owner of a property located in the City on the north side of Columbia Street between 8th Street on the West and Begbie Street on the East (the "Property").

B. On June 25, 2010 the City issued a request for proposals (the ''RFP") for developer participation in the development of a single building on the Property (the "Building") comprising a three storey multi·use civic facility (the "MUCF") combined with a commercial use office tower and underground parkade (the "Project"). ·

C. UPG submitted a proposal (the "UPG Proposal") in response to the RFP, which incorporated a Class A glass curtain wall design office tower of 6-8 floors located above the MUCF, with a minimum floor plate of 15,000 square feet per floor and total square footage of approximately 100,000 to 130,000 square feet(the "Office Tower").

D. Following meetings between the City and UPG, City Council endorsed the UPG Proposal in principle, and, despite some material changes requested by the City from the tenns contained in the UPG Proposal, the City and UPG are now in negotiations to conclude a Development Agreement (the "DA") and ancillary and related agreements to enable the Project to proceed, including an agreement to detennine' and allocate costs for the Project to the MUCF and Office Tower on a fair and equitable basis (the "Cost Allocation Agreement'').

E. The City is relying on $35 Million in funding for the MUCF to be provided under a Development Assistance Compensation Agreement between the City and the Province of British

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Columbia (the "DAC Agreement") under which agreement the funds must be expended by December 31,2013 (the "Funding Deadline'').

F. In order to develop the Project in time to meet the Funding Deadline in light of the desire of both parties to proceed with a joint Project, the parties must pursue an aggressive Project schedule, which will require that certain Project Soft Costs (as defined herein) for design and costing of the Building must be incurred by the parties prior to their concluding the DA or completing the tender process for construction bids, and before municipal approvals are obtained for the Project and subject conditions to.be specified under the DA are satisfied.

G. The parties are prepared to incm the Project Soft Costs in good faith on condition that this Cost Recovery Agreement is executed by each of them as binding obligations to pay for Project Soft Costs incurred from and after November 1, 2010 (the Effective Date") under the circumstances provided herein.

NOW THEREFORE TIDS AGREEMENT WITNESSES THAT in consideration of the covenants of the parties provided herein and the sum of One Dollar of lawful money of Canada now paid by each of the parties to the other, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. DEFINITIONS

In this Agreement:

(a) "Additional Soft Costs" means reasonable additional out of pocket Project Soft Costs incurred by the City if it becomes necessary to redesign the base building shell of the MUCF ifUPG withdraws from the Project;

(b) "Base Building" means the structural, architecturalf mechanical and electrical design of the shell of the Building and its components and facilities, including mechanical and electrical systems, the Parking Structme, exterior cladding and design of the MUCF and applicable curtain wall design for the Office Tower, but excluding the interior design or fit up costs of the MUCF or the Office Tower;

(c) "Base Building Costs" means the total of the Project Soft Costs and the construction costs for the Base Building;

(d) "Contractor" means a general contractor jointly selected by UPG and the City;

(e) "Cost Allocation Percentage, means the percentage of Project Soft Costs allocated hereunder to the MUCF and the Office Tower, respectively, pending the completion of the Cost Allocation Agreement;

(f) "Effective Date" means November 1, 2010;

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(g)

(h)

(i)

(j)

(k)

L_ 0)

(m)

(n)

(o)

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-3-

17( r)rd) l'?(r)({:') 2.-r t'r)("')(.-; }(b)("c.)C, ,') I

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"Parking Structure" means the three level underground parking structure to be constructed below the MUCF and , '7 tr) r<:~l 17tl)rn

"Prime Rate" means the prime rate of the Royal Bank of Canada in effect from time to time;

"Project Budget" means the joint budget of the Base Building to be completed and agreed upon by the parties under the Cost Allocation Agreement after the pricing of the Project by the Contractor, but prior to the Tender Process, with input from any quantity surveyors, other contractors and other consultants engaged by the City at its cost to assist and advise the City on Project pricing;

''Project Documents" meal)S such legal agreements between the parties as they may jointly authorize, and contracts with consultants for perfonning Base Building design, costing and site services, but excluding:

(i) agreements between the City and consultants for demolition of the improvements on the Property or for the removal of contaminated soil or hazardous substances from the Property or remediation thereof;

(ii) the DA and the Project Administration Agreement;

(iii) the Cost Allocation Agreement; and

(iv) this Agreement.

"Project Soft Costs" means consulting fees and costs properly chargeable to the Project for the architectural, structural, mechanical, electrical, plumbing, civil and other aspects of the design of the Base Building, pursuant to written contracts entered into by UPG th~t have been approved in writing by the City, including applicable termination fees, together with any agreed upon legal fees incurred in the preparation of Project Documents if authorized by the parties;

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(p) "Tender :Process" means the tendering under the name of UPG of the design and cons1ruction of the Base Building to consultants and contractors approved by the . City, under fixed price contracts;

( q) "Termination Notice" means a notice in writing from one of the parties to the other indicating its intention to not proceed with the Project for the applicable reasons described in Paragraph 7; and

(r) 17 (r)(J)

2. PURPOSEOFTBISAGREEMENT

The purpose of this Agreement is to fairly and equitably allocate to the parties the responsibility for payment of Project Soft Costs if the Project does not proceed by reason of any of the circumstances described under Paragraph 7, and to outline some fundamental understandings regarding other terms that will be incorporated into the DA, to enable the parties to move forward and incur Project Soft Costs prior to entering into the DA.

3. PRICING OF BASE BUILDING COMPONENTS

The parties intend to complete an initial Contractor pricing process for the construction portion of the Base Building Costs in accordance with this Paragraph 3. The City will submit the MUCF Base B\lilding architectural schematic design ("MUCF Design") for Council approval forthwith following completion of same by the architects for the Project. UPG will forward the proposed Base Building architectural schematic design for the Building incorporating the MUCF Design ("Building Design'') to the Contractor for initial pricing forthwith following receipt of notification from the City of its approval of the Base Building MUCF Design, with instructions to complete a detailed pricing of the separate components of the Building (the "Contractor Pricing") based on the Building Design. The Contractor Pricing will be completed as a Project expense.

4. PROJECT BUDGET

The parties intend to complete the Project Budget process in accordance with this Paragraph 4. Forthwith following receipt of the Contractor Pricing, the parties will work together in good faith and on a transparent basis to prepare the Project Budget, based on the data in the Contractor Pricing and the advice of quantity surveyors and other advisors to the Project, including quantity surveyors, other contractors and other consultants engaged by the City at its cost to assist and advise the City in respect to the preparation of the Project Budget. The Project Budget will be adjusted from time to time as necessary to reflect more current infonnation and more detailed design specifications received by the parties prior to signing the DA.

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s. COST ALLOCATION AGREEMENT

The parties intend to negotiate in good faith the tenns of the Cost Allocation Agreement . concUITent with the preparation and approval by both parties of the Project Budget. Until such time as the Cost Allocation Agreement is settled, the parties agree that the Cost Allocation Percentages will be as follows:

17(r )(d) 17(r)ff) '<.r(•)(c\\(ii)fh) (c.)(, ;,)

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The parties acknowledge that the Cost Allocation Agreement will allocate their respective shares of Base Building Costs (including Project Soft Costs) to the separate components of the Project on a proportionate basis. The parties agree to adjllSt and balance their respective payments made under this Agreement to the amounts allocated to them under the Cost Allocation Agreement and to make payment to the applicable party of any amounts owing by virtue of such adjustment within 30 days after entering into the Cost Allocation Agreement. The parties further agree that upon completion of the tender process for the construction of the Building, the amounts allocated to eaeh of them under the Cost Allocation Agreement will be adjusted to reflect the amounts in the successful tender bids. The parties agree to make payment to the applicable party of any amounts owing by virtue of such adjustment within 30 days after the adjustments are approved by both parties.

6. PROCEDURE FOR PAYMENT OF PROJECT SOFI' COSTS

Subject to adjustment under Paragraphs 5 or 7, UPG will pay the Cost Allocation Percentage of the Office Tower and the City will pay the Cost Allocation Percentage of the MUCF.

l 7(r)(cJ)

1 7 (r) ((')

7. EVENTS THAT WILL TRIGGER COST RECOVERY BY EITHER OF THE PARTIES

It is the intention of the parties, subject to receipt of all applicable approvals and satisfaction of all conditions precedent, to proceed with the Project to completion and to pay the Cost Allocation Percentages or other amounts detennined under the Cost Allocation Agreement. If, however, the

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Project does not proceed due to any of the reasons noted below, the Proj ect Soft Costs will be paid or recovered in accordance with the following terms:

(a) No Fault Basis - if:

l? (, ) t <=!)

J ';1 (J ~"f: )

(b) City Regponsibllitv Basis ·

(c) UPG Responsibility Basis -

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I? I I) ( r:)

8. PARKING COST PUT

17 ( J)( F)

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--- .. . ...,

(a)

(b)

(c)

(d)

(i)

(ii)

(iii)

(iv)

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I ? ( \) (;<:)

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9. DAC FUNDING

17 ( t){~)

10. DELIVERY OF PLANS AND PROJECT DOCUMENTS ON TERMINATION

If the Project does not proceed for any of the reasons described in Paragraph 7 of this Agreement or if UPG issues 17rcv.a) :1 in accordance with Paragraph 8 hereof, UPG will promptly provide to the City ail such plans and designs and other documentation obtained from consultants ·and contractors in respect to the Project, for the use of the City at its discretion, ·

11. DISPUTE RESOLUTION

If the parties are in dispute about any of their respective rights and obligations hereunder, they shall first attempt to resolve such dispute by good faith negotiations between executives representing each party. If the dispute is not resolved within 30 days after notice in writing from one party to the other describing the natpre of such dispute, then either party may initiate legal proceedings in a B.C. Court. If the parties are agreeable, they may refer by notice in writing to the other, submit the dispute to .mediation or arbitration before a single arbitrator in accordance with the Commercial Arbitration Act of British Columbia.

12. GOVERNING LAW

This Agreement and the obligations of the parties hereunder shall be interpreted, construed and enforced i~ accordance with the laws of the Province of British Columbia and any action or suit arising herefrom shall have as its forum the courts of the Province of British Colmnbia.

13. ENTIRE AGREEMENT

The parties hereto have expressed in this Agreement their entire understanding concerning the subject matter of this Agreement and no representation, warranty, covenant, condition, tenn or reservation, implied or otherwise, shall be read into this Agreement, nor shall any oral or written understanding entered into before this Agreement modify or compromise any of the terms or conditions herein.

14. INCORPORATION OF TERMS INTO DEVELOPMENT AGREEMENT

This Agreement and the Cost Allocation Agreement will be attached as Schedules to the DA and incorporated into the tenns of the DA.

15. FURTHER ASSURANCES

Each of the parties hereto shall do all acts and things and execute and deliver all documents necessary or desirable to give effect to the provisions and intent of this Agreement.

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16. TIME OF THE ESSENCE

Time is hereby declared to be of the essence of this Agreement.

17. NOTICES

All notices, demands and requests (herein called a "Notice") provided for in this Agreement including all consents, agreements and approvals provided for in this Agreement (or refusals to grant the same) shall be in writing and shall be delivered by hand, mailed or transmitted by facsimile to the party intended to receive it at its address, or via its facsimile number, as provided for below:

(a) Ifto UPG:

Suite 330 - 555 Sixth Street New Westminster, BC V3L 5Hl Attention: Alan Leong and Bart Slotman Facsimile: (604) 525-1387

(b) lfto the City:

511 Royal Avenue New Wes1minster, BC V3L 1H9 Attention: Paul Darninato, Chief Administrative Officer and

Lisa Spitale, Director of Development Services Facsimile: (604) 527-4511

By giving to the other parties at least 10 days' notice thereof, any party may at any time and from time to time change its address to another address in Canada. its facsimile number, its telephone number, the person to whose attention such instrument is to be directed and the pffice of such person. Any such instrument delivered by hand to the party to whom such instrument is intended to be delivered at its address for the purposes of this section before 5:00p.m. (in the place to which it is delivered) on a· Business Day shall be deemed to have been validly and effectively given and received by the party to whom it is so delivered on the date of such delivery, and if so delivered by hand to such address after 5:00 p.m. on any day, shall be deemed to have been validly and effectively given and received by the party to which it is so delivered on the Business Day next following such delivery. Any such instrument mailed by prepaid registered mail at any post office in Canada addressed to the party to whom such instrument is intended to be given shall be deemed to have been validly and effectively given and received by such party on the earlier of the date such instrument is actually delivered to the addressee and the fourth Business Day following such mailing, except that if a disruption in postal service exists at, immediately before or immediately after the date of such mailing which is likely to disrupt the delivery of such instrument in the ordinary course of the mail, then such instrument shall not be deemed to have been validly and effectively given or received until the date it is actually delivered to such party's address. Any ~ucb instrument

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transmitted by facsimile to a party via its facsimile number for the purposes of this section by 5:00p.m. (in the place to which it is transmitted) on a Business Day shall be deemed to have been validly and effectively given and received by such party on that Business Day, and if so transmitted by facsimile at any other time shall be deemed to have been validly and effectively given and received by such party on the Business Day next following such transmittal. In this Paragraph, "Business Day" means a day other than a Saturday, Sunday or statutory holiday in British Columbia.

18. COUNTERPARTS

This Agreement may be executed by the parties hereto or by their respective representatives on their behalf in any number of counterparts with the same effect as if the parties hereto bad all signed the same docwnent. All counterparts of this Agreement shall be construed together and constitute one instrument.

19. SUCCESSORS AND ASSIGNS

Subject to the restrictions on transfers and encumbrances set forth herein, this Agreement shall enure to the benefit of and be binding upon the undersigned parties and their respective successors and permitted assigns. Neither party may assign this Agreement or the benefit hereof without the prior written consent of the other party, which may be withheld arbitrarily .and without reason.

20. NO AGENCY OR CONTRACTUAL AUTHORITY . .

Nothing in this Agreement makes either party the agent of the other, nor does this Agreement give either party any authority to bind the other party to any contract or agreement unless authorized in writing to that effect.

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TO EVIDENCE THEIR AGREEMENT each of the parties has executed this Agreement effective as of the Effective Date.

UPG PROPERTY GROUP INC.

By:

~){.4/.~. /liA!V /(t/. lcOA/G-PrintName Authorized Signatory

THE CITY OF NEW WESTMINSTER

By:

Authorized Signatory Print Name

a::~~ Authorized Signatory Print Name

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DISENGAGEMENT AGREEMENT

THIS AGREEMENT dated for reference February 13, 2012 is

BETWEEN:

AND:

UPG PROPERTY GROUP INC. ("UPG"), Suite 330 - 555 Sixth Street, New Westminster, BC V3l SHl

CORPORATION OF THE CITY OF NEW WESTMINSTER (the "City"), 511 Royal Avenue, New Westminster, BC V3l1H9

BACKGROUND

A. The City is the owner of the property located in New Westminster on the north side of Columbia Street between 8th Street on the West and Begbie Street on the East, legally described as PID: 028-417-755, Lot A Blocks 12 and G Group 1 Merchants Square Ne:-v Westminster District Plan BCP46974 (the "Property'');

B. The City issued a Request for Proposals for the joint development of the Property, and UPG submitted a proposal in response to that RFP (the "UPG Proposal");

C. In January 2011, UPG and the City entered into a non-binding Memorandum of Understanding (the "MOU") with respect to the construction of a single building on the Property comprising a four storey multi-use civic facility combined with a commercial use office tower, underground parkade and certain off-site improvements (the "Project"};

D. The City and UPG also entered into a Cost Recovery Agreement dated for reference November 1, 2010 (the "Cost Recovery :Agreell)ent") to allocate Project Soft Costs (as defined ln the Cost Recovery Agreement} pending finalization of an agreement for the joint development and construction of the Project (a "Development Agreement'');

E.

G.

On October 31, 2011 (the "Effective Date"} UPG gave notice to the City and tg_ consultants for the base building design of the Project engaged by UPG of its Intention to pause its participation in the Project, and shortly thereafter the City confirmed its intention to proceed with the Project, using such Project consultants;

On November 28, 2011 UPG provided notice to the City pursuant to the Cost Recovery Agreement indicating UPG's intention not to participate further In the Project;

UPG and the City wish to now enter into this Agreement to address certain matters with respect to UPG's full disengagement from the Project and the City's desire to continue with the Project without delay and to engage a replacement developer,

C:\Oocuments And Settmgs\Nhauanall\ local St111nts\Tempor~ry Internet files\Content.Outlook\INHSAOHif\Asr·Oisenc~semerMeb 13 2012.0ocxFeb 13, 2012 3:49 PM/N

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For good and valuable consideration, the receipt and sufficiency of which each party acknowledges, the City and UPG agree as follows:

1. Assignment of Certain Consultant Contracts-

(a) UPG hereby assigns, transfers and sets over to the City all of UPG's right, title and interest in and to the consultant contracts identified in Part 1 of Schedule A to this Agreement (the /(Assigned Contracts").

(b) UPG represents and warrants to the Citythat:

(i) . subject to any required consents of the applicable consultants, UPG has authority to assign UPG's right, title and interest in the Assigned Contracts to the City in accordance with this Agreement;

(ii) to UPG's knowledge and belief, the Assigned Contracts were good, valid and subsisting as at the Effective Date and UPG Is not in breach of any of its obligations under the Assigned Contracts;

{iii) except as notified by UPG to the City and the Project Manager prior to the execution of this Agreement to UPG's knowledge and belief no amounts are owing by UPG pursuant to any of the Assigned Contracts for work done on or before the Effective Date and UPG has paid for all work done on or before the Effective Date under such Assigned Contracts;

(iv) the Assigned Contracts have not been amended by UPG as at the Effective Date except as noted in Schedule A and have not been assigned except pursuant to this Agreement; and

(v) . UPG and the City will issue a joint Jetter drafted by the City in a form acceptable to each of them, acting reasonably, to each of the consultants under the consultant contracts identified in Part 1 and Part 2 of Schedule A, notifying them that the City has assumed full responsibility for the relevant contracts as of the Effective Date.

2. City Responsibility For Consultant Contracts - The City hereby assumes and will perform all of UPG's remaining obligations under consultant contracts identified in Parts 1 and 2 of Schedule A and will indemnify UPG from and against any actions, suits, costs, losses, damages, charges and expenses {including reasonable legal fees and disbursements incurred by UPG in connection therewith) for or In respect of non­performance by the City of any such assumed obligations.

3. leasing Opportunities & Replacement Developer- UPG has agreed to introduce the City to all UPG leasing opportunities in relation to the Project and to direct all

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prospective tenants to the City, The City acknowledges that UPG has satisfied the foregoing obligations.

4 . Marketing, 'Merchcmts Square' Domain Name, Website & Pre-leasing Materials- UPG hereby assigns, transfers and sets over to the City all of UPG's right, title and interest in and to the marketing materials, names, websites, pre-leasing material and other things listed on Schedule B. UPG represents and warrants that it is the legal and beneficial owner of the assets listed on Schedule B and that it has the capacity to legally assign and transfer those assets to the City, provided, however, the City acknowledges that UPG has not made any application to register a trademark or trade name In respect to the name "Merchant Square" and makes no representation or warranty as to the legal ownership of such name, and the City agrees to assume all risk and responsibility with respect to any potential competing claims to the use of that name and any associated trademarks.

s. Other Project Documents- UPG hereby assigns, transfers and sets over to the City all of UPG's right, title and interest in and to (a) all design documents (including all drawings, plans and specifications) prepared In relation to the Project, including architectural, structural, mechanical, electricat plumbing, civil and other aspects of the design of the Project or Project servicing, (b) all documents related to the allocation project costs to the office tower and MUCF portions of the Project, (c) all Project budgeting documents, and (d) all draft legal agreements ("Draft Contracts"), including the Development Agreement, Cost Allocation Agreement, Building Operating Agreement and Parking Facility Operating Agreement.

6. DeHvery to City of Project Documents - Promptly following execution and delivery of this Agreement, UPG will deliver to the City all of the marketing brochures and electronic copies of any of the documents and things referred to in sections 4 and 5 of this Agreement which the City does not already have, Including the last version of the Draft Contracts.

7. City Payment- Promptly following execution and delivery of this Agreement, the City will pay ' t7 (1)(r) l?(t)(d) to UPG. The foregoing amount is based on invoices provided by UPG to the City for amounts paid by UPG for work that the City intends to use with respect to the development of the Project with a replacement developer.

8. Confidentiality- UPG will, and will cause its officers, directors, employees, agents and servants to, keep confidential and not disclose to third parties: (1) the content of the UPG Proposal, the MOU, the Cost Recovery Agreement, the various draft Development Agreements and related agreements put forward by or on behalf of either the City or UPG or this Agreement, or (2) any of the communications or negotiating positions of either the City or UPG with respect to any of the forego ing agreements and documents.

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UPG acknowledges and agrees that the disclosure of any of the foregoing may harm the City's ability to find a replacement developer with respect to the Project and the City's ability to negotiate with prospective replacement developers. The City acknowledges that the terms of some or a !I ofthe documents described above may have already been disclosed internally by the City or in good faith by UPG to prospective lenders or other third parties having a legitimate Interest in knowing such terms, and to that extent such terms may already be in the public realm. The purpose of this confidentiality provision is to ensure that after the effective date of this Agreement, UPG will take reasonable measures to ensure that the confidentiality of the terms of such documents and of this Agreement are respected by persons within UPG's control and will not be discussed with potential replacement developers or potential tenants of the Project. The City further acknowledges that this confidentiality provision will not apply to disclosure required by a court order or other lawful authority.

9. Communications- UPG will not be obligated to issue any private or public statements or communications in respect to the Project and it will not be required to support, endorse, promote or have any other Involvement In respect to the Project. The City will be solely responsible for the Issuance of any media releases in _connection with the Project, to the extent the issuance of any such releases is determined necessary or desirable by the City and at such time as may be desired by the City. ·

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10. UPG Release of City- ~Ubject to tne urys express maerrtrm1e:. unu~::1 tJu::. Molt:t:lln:llt

and effective after receipt of the payment described in section 7, UPG, for itself and its successors and assigns, hereby releases and forever discharges the City, and all of its current and former elected and appointed officials, officers, employees, agents, servants, successors and assigns, {collectively, the "Releasees") from any and all manner of actions, causes of action, damages, debts, suits, liabilities, claims, costs, expenses and demands of every kind and nature whatsoever, whether in law or in equity, which UPG has against or with respect to the Releasees or any of them, in anyway related to, connected with or arising from the Project, including the MOU and the Cost Recovery Agreement.

11. City Release of UPG - The City, for itself and its successors and assigns, hereby releases and forever discharges UPG, and all of its current and former officers, employees, agents, servants, successors and assigns, (collectively, the "Releasees") from any and all manner of actions, causes of action, damages, debts, suits, liabilities, claims1 costs, expenses and demands of every kind and nature whatsoever, whether in law or in equity, which the City has against or with respect to the Releasees or any of them, in

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anyway related to, connected with or arising from the Project, including the MOU and the Cost Recovery Agreement.

12. City Indemnity - The City will Indemnify UPG from and against any and all manner of actions, causes of action, damages, debts, suits, liabilities, claims, costs, expenses and demands of every kind and nature whatsoever, whether in law or in equity, In relation to the Project arising from events occurring after the Effective Date or where caused by the negligent act or omission, or intentional misconduct, of the City or any contractor engaged by the City in the performance of the Project, except to the extent caused by a negligent act or omission, or the Intentional misconduct, of UPG.

13. This Agreement is the entire agreement between the parties regarding its subject matter and this Agreement supersedes and replaces all representations, warranties, promises, understandings and agreements between the parties regarding the subject matter of this Agreement.

14. UPG and the City will, promptly upon the reasonable request of the other from time to time, execute such further documents as the other may require, acting reasonably, in order to give effect to this Agreement or the intent of any provision of this Agreement.

15. In this Agreement, where the word "including11 is followed by a list, the contents of the list are not intended to circumscribe the generality of the expression preceding the word "including".

16. Time is of the essence of this Agreement.

17. If any part of this Agreement is for any reason held to be invalid by a decision of a court with the jurisdiction to do so, the invalid portion wil l be severed from the rest of this Agreement and the rest of this Agreement will remain valid and in effect.

18. This Agreement will be governed by and construe·d in accordance with the laws of the Province of British Columbia which will deem to be the proper law thereof.

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19. This Agreement will enure to the benefit of and be binding upon the parties hereto and their respective successors and assigns.

As evidence of their agreement to be bound by the terms of this Agreement, the parties have executed this Agreement on the date below.

UPG PROPERTY GROUP INC. by Its authorized signatory(les}:

Name:

Name:

Date: fdrva-rt;{ I 6, UJ I 2-

"

CORPORATION OF THE CITY OF NEW by

Corporate Officer:

Date: Fi:.JJn ... tCi '~I It/-. 2tJ 2-,

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Schedule A

Part 1- List of Consultant Contracts to be assigned to City

• Musson Cattell Mackey Partnership dated December 7, 2010 for architectural services; • Glotman Simpson dated November 25, 2010 for structural design services; • AME Group dated February 22, 2011 for mechanical design services; • Acumen Engineering dated February 22, 2011 for electrical design services; • GeoPaclfic Consultants dated January 13, 2011 for geotechnical consulting; • Eckford +Associates dated February 22, 2011 for landscape design services; • Gage Babcock Associates dated March 16, 2011 for building code consulting services;

• John W. Gunn Associates dated February 25, 2011 for vertical transportation consulting services;

Part 2 -list Consultants Jointly Retained by City and UPG

• Pivotal Projects for project management services;

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Schedule 8

list of Marketing Materials, Pre-leasing Documents, Website and other UPG Property to be Transferred to the Otv

• Leasing Brochures • Marketing Folders • Merchantsquare.ca website • 2.1 ( •) { b)

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4i (l)(b)

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