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Brownfield Restoration in Ontario

Learn about the Kilmer Fund, an equity fund targeting brownfield opportunities in Ontario with a proven track record. Understand the intensification drivers in the Greater Golden Horseshoe and environmental regulations for brownfield redevelopment. Gain insight into deal structuring, due diligence, and risk management strategies.

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Brownfield Restoration in Ontario

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  1. Brownfield Restoration in Ontario Surplus Properties Roundtable – Toronto, ON May 17, 2017

  2. The Kilmer Fund • First Canadian brownfield equity fund with both institutional and private investors. • Pairing of equity capital with experienced management to unlock the value in Brownfield opportunities. • Fund investment sweet spot of $5 to $15 million in land, planning and site restoration costs. • Provide environmental liability solutions to knowledgeable vendors. • Established strategic partnerships to enhance the mandate for Brownfield investments. • Proven track record in real estate market since 2006 and creation of a second fund in 2013.

  3. Intensification Drivers The Greater Golden Horseshoe (GGH) will account for 80% of Ontario’s population growth over next 30 years • GGH is home to 66% of Ontarians and 25% of Canadians • Ontario’s Places to Grow Act (“Places to Grow”): • Protects green space and limits urban sprawl in the GGH (1.8 million acres) • Since 2001, GGH accounts for 84% of Ontario population increase and 39% national increase • Promotes intensification (50 res-jobs/ha) on transit and brownfield redevelopment • 40% of new residential development to occur within urbanized areas • Places to Grow Update 2016 (60% Infill & 80 res-jobs/ha)

  4. Intensification Drivers Places to Grow Update (2016) • Proposed changes to intensification requirements: • 60% of growth within existing Built-up Area (vs. 40% today) • 80 res-jobs/ha (vs. 50 res-jobs/ha today)

  5. Environmental Regulations Brownfield Regulatory Framework in Ontario • Ontario Environmental Protection Act (EPA) • Specifically, Ontario Regulation 153/04, as amended in 2009 • Regulatory Closure: acknowledgement of a Record of Site Condition (RSC) with the Ontario Ministry of the Environment and Climate Change (MOECC) • When a RSC is required • Change of use to more sensitive land use (ie. Industrial  residential) • Financial institutions (prior to lending) • Municipalities (prior to permitting) • RSC: available publicly (Ontario Environmental Site Registry)

  6. Environmental Regulations Brownfield Regulatory Framework in Ontario • Site investigation must be completed by a Qualified Person (QP) • QP must demonstrate property meets provincial standards for the • intended land use before filing a RSC • RSC can be filed demonstrating that a property meets: • Generic MOE Standards; OR • Site-specific standards derived from a Risk Assessment (RA) • RA: Risk Management Measures to block potential exposure pathways Source: A Practical Guide to Brownfield Redevelopment (Ontario MAH)

  7. CLOSING DUE DILIGENCE DEAL STRUCTURE DETAILED SCREENING PRELIMINARY SCREENING Deal Sourcing Pyramid About 95% of the properties will not even meet basic criteria 5%

  8. Brownfield Considerations Don’t Underestimate • Complexity of the Deals, Lengthy Negotiations with Significant Up-front Costs • Marketing and Planning Risks • Timelines for Planning Approvals and Site Restoration • Municipal Infrastructure Upgrades and Approvals • Relying on Municipal Incentives and Good Will • Your Project Will Go According to Plan

  9. Remedial Strategy and Risk Management Integrated Site Management • Risk assessment and clean-up standard selection based on site development strategy. • Demolition, on-site material segregation, treatment and re-use. • Contaminant source removal and supplemental ground water treatment and mitigation. • Site monitoring and risk management considerations. • Regulatory site closure documentation completed by Qualified Consultant.

  10. Planning & Remedial Strategies Integrating Site Development Considerations • Land uses • Less-sensitive uses at-grade • Built Form • Underground parking vs. slab-on-grade • Surface materials • Hard caps (asphalt/concrete) vs. soft caps (landscaping) • Soil Management and Beneficial Reuse PARKING Soft and Hard Surface Caps Enclosed buildings with storage garage/parking as “first use” Retail at-grade, residential above

  11. Remedial Strategy and Risk Management Approach to Risk Management INSURANCE Pollution Legal Liability Policy BUILT-FORM & MAINTENANCE Condominium Corporation & Municipal Conveyance FINANCIAL ASSURANCE Remedial Escrow REGULATORY Record(s) of Site Condition VENDOR PURCHASER RISK MANAGEMENT LIABILITY TRANSFER Agreement of Purchase and Sale; Indemnity and Release Agreement

  12. Case Study 1 - Lakeshore Site Context - Toronto, ON (12 acres)

  13. Case Study 1 - Lakeshore Site Remediation

  14. Case Study 1 - Lakeshore Site Development

  15. Case Study 2 – Marcel-Laurin Site Context - Montreal, QB (12 acres)

  16. Case Study 2 – Marcel-Laurin Site Remediation

  17. Other Kilmer Projects Former Service Stations

  18. Port Credit Waterfront Former Refinery Transaction Source: Imperial Oil

  19. Port Credit Waterfront Master Planned Waterfront Community

  20. Case Study 3 – Pan Am Village Site Context – Toronto, ON (35 acres)

  21. Case Study 3 – Pan Am Village Site Context – Toronto, ON (35 acres)

  22. Case Study 3 – Pan Am Village Site Remediation and Risk Management Measures

  23. Case Study 3 – Pan Am Village Site Redevelopment

  24. Contact Information

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