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2007/05/07SPECIAL COUNCIL MEETING Monday, May 7, 2007 Order of Business and Agenda Package PRAYER: Councillor Kerrio SPECIAL COUNCIL MEETING May 7, 2007 DISCLOSURES OF PECUNIARY INTEREST Disclosures of pecuniary interest and a brief explanation thereof will be made for the current Council Meeting at this time. DEPUTATIONS/ PRESENTATIONS Presentations by representatives of various arena user groups will take place. PARKS RECREATION CULTURE MATTERS 1. Chief Administrative Officer R- 2007 -07, Potential 4 -Pad Arena Complex Development MAYOR'S REPORTS, ANNOUNCEMENTS COMMUNICATIONS AND COMMENTS OF THE CITY CLERK 1. Canadian Cystic Fibrosis Foundation Request to Proclaim the month of May as "Cystic Fibrosis Awareness Month RECOMMENDATION: For the Approval of Council. Additional Items for Council Consideration: The City Clerk will advise of any further items for Council consideration. 2 LEGAL MATTERS 1. Chief Administrative Officer L- 2007 -24, Declare Surplus and Authorize Land Exchange and Lease Agreement with 1251435 Ontario Limited "IBF Union Avenue BY -LAWS The City Clerk will advise of any additional by -laws or amendments to the by -laws listed for Council consideration. 2007 -95 A by -law to declare Park Street Plan 9 aka Union Avenue surplus 2007 -96 A by -law to authorize the execution of an Agreement with 1251435 Ontario Limited, respecting the exchange of lands for the development of a public parking lot and private parking spaces over a portion of a closed road allowance known municipally as Union Avenue 2007 -97 A by -law to authorize the execution of a Lease Agreement with 1251435 Ontario Limited, respecting the short term lease of a portion of a closed road allowance known municipally as Union Avenue 2007 -98 A by -law to adopt, ratify and confirm the actions of City Council at its meeting held on the 7 day of May, 2007 NEW BUSINESS Dean Iorfida Fwd: Public Meeting May 7, 2007 Arena From: Dean Iorfida Subject: Fwd: Public Meeting May 7, 2007 Arena "Niagara Protective Coatings" <npc @niacoat.com> 5/1/2007 11:51 AM Hi Dean: Page 1 of 1 I was hoping that we (Fred Sacco, Paul Bums and myself) could get on the agenda to speak at the meeting May 7, 2007 again after others have spoken. I believe that all the user groups would be there as well. Please let me know. Thanks for all your help Dean, we really appreciate it. Laurie Primeau about:blank 5/3/2007 May 7, 2007 R- 2007 -07 His Worship Mayor Ted Salci and Members of the Municipal Council City of Niagara Falls, Ontario NiagaraJalls CANADA Members: Re: R- 2007 -07 Potential 4 -Pad Arena Complex Development RECOMMENDATION 1) That Council approve the development of a 4 -Pad Arena Complex with 2000 seats in the main arena pad. 2) That the following capital funding sources be allocated to the arena project; proceeds from the sale of Memorial and Stamford /Jack Bell arenas; Section 37 contribution from Hilton Hotels of $1.2 Million; and that the annual compensation contribution from Walker Brothers Quarries Limited be allocated to the annual debt financing. That the capital budget be approved for up to $34.7 Million (2008$), including all funding sources and borrowing of up to $29.5 Million be authorized. BACKGROUND: On February 5, 2007, Council directed staff to "report on the economical and financial benefits to update the twin pad project to a four- plex This report undertakes, and summarizes, a comprehensive comparison of arena development options. It will be shown that the development of a 4 -Pad 2000 seat arena complex is the most effective short and long term financial strategy. A 4 -Pad also provides a modern, community arena facility that is responsive to current and future user needs. 4310 Queen Street, P.O. Box 1023, Niagara Falls, ON, Canada L2E 6X5 905- 356 -7521 www.niagarafalls.ca Working Together to Serve Our Community Community Services Department Parks, Recreation Culture Option Net Operating Deficit current operation $1,508,507 2 -pad scenario with 3000 seat main bowl $1,171,088 4 -pad scenario with 2000 seat main bowl 648,395 May 7, 2007 2 R- 2007 -07 In order to conduct this comparison, it was necessary to examine: a) the current operating budgets for the existing three (3) arena locations (Niagara Falls Memorial, Stamford /Jack Bell and Chippawa Willoughby) b) the operation of a new 2 -pad arena with a 3,000 seat main bowl, as previously approved by Council, while maintaining Stamford /Jack Bell and Chippawa Willoughby arenas, c) the proposed new 4 -pad arena (2000 seats) while maintaining Chippawa Willoughby arena As indicted below, the result of this analysis is, that when compared to our current net operating deficit, a 4 -pad scenario is significantly more economical to operate. A more detailed analysis is shown in Appendix 1 Detailed Annual Operating and Financial Efficiencies. The financial conclusions were derived from information on the City's current operating costs, understanding of industry operating principles, comparisons with other arena 4 -pad complexes, and appropriate future economic projections. Key Assumptions Regarding a Four -Pad Arena Complex The significant cost reduction with the 4 -pad scenario has been developed predicated on several key assumptions: All revenue generated through the arena operation will remain with the City. Loss of revenue, for applicable user groups, through board advertising will be offset. A more market driven approach to establishing ice rental rates will be taken. Consideration of a more innovative facility management approach. Chippawa Willoughby Arena will continue to operate regardless of the proposed arena scenario (2 -pad versus 4 -pad). Why a Four -Pad and Does it Make Economical Sense? While the capital cost to construct a 4 -pad arena is obviously greater than the cost to construct a 2 -pad arena, the net carrying costs are in fact lower due to operating efficiencies resulting from a 4 -pad operation. Various efficiencies and economies of scale are realized when all ice surfaces are located on one site (i.e., staffing, utility costs, supplies, materials, contract costs and major equipment). The revenue achievable through a 4 -pad option is significantly greater than could be realized through a 2 -pad arena operation, or two 2 -pad arenas on separate sites. The capital cost on a per pad basis is lower with a 4 -pad that with a 2 -pad (see Appendix 2). Significant capital improvement and maintenance costs for Stamford/ Jack Bell will be eliminated. May 7, 2007 How Will a Four -Pad Arena be Funded? 3 R- 2007 -07 LeisurePlan International Inc. completed an Arena Feasibility Study, in May 2004, which identified deteriorating conditions at both Stamford /Jack Bell and Niagara Falls Arenas. LeisurePlan's recommendation was that Niagara Falls Arena be replaced as soon as possible, due to its age and high operating costs which currently account for 50% of our total Arena operating budget The report also suggested that due to the age of Stamford /Jack Bell arena, significant capital improvements will be required over the next several years, and by 2014 the facility would need to be replaced. While there is additional cost to construct the 4 -pad, when we apply the net operating savings from the 4 -pad, the carrying costs are reduced to a level lower than required to fund the 2 -pad. Appendix 2: Financial Comparison Summary shows various funding scenarios that could be applied to our capital construction. Some of these funding scenarios would apply regardless of whether to continue with a twin -pad or go with a four -pad such as the section 37 contribution from the Hilton, sale of land proceeds from Niagara Falls Memorial Arena and the major fund raising initiative. A four -pad also has the source of sale of land proceeds from Stamford/ Jack Bell and greater naming rights potential. Financing for Annual Debt Costs is improved by annual operating savings, resulting in a reduction in the amount required to be debentured. Why Not Two (2) Pads on Two (2) Separate Locations? Economies of scale will not be realized having concurrent construction on two different sites. Less realization of operational efficiencies with more arena locations (i.e., need for additional staffing, double the fixed costs, double the utility costs etc.). A four -pad has the potential of greater ancillary services such as a restaurant, pro shop, etc. If there were two 2 -pads on separate locations, it is unlikely that such ancillary services would be provided. A four -pad will have greater attendance than two twin pads on separate sites, therefore, increased client exposure. Why Reduce the Seating Capacity in the Main Pad from 2,000 or 3,000 Seats? In reviewing the seating capacity of the main pad, which is currently approved at 3,000 seats, a number of factors were considered: Based on utilization in 2005 and 2006, 97% of events held at Niagara Falls Memorial Arena required less than 2,000 seats. Most of the events that exceeded the need for 2,000 seats were 'non -ice' events. The proposed convention centre is expected to provide up to 10,000 seats and is proposed to serve the non -ice market currently using Niagara Falls Memorial Arena, including special events and concerts. The convention centre is also expected to have the ability to bring in 'temporary ice' for large community special events. May 7, 2007 4 R- 2007 -07 Conclusion Much lower capital construction costs and annual operating costs are achieved with a 2,000 seat main arena in contrast to a 3,000 seat main arena. Is There Community Support for a Four -Pad by the Prospective Users? A Committee with representation from all major user groups has been involved in the arena discussions since the project was initiated. These groups include representatives from the Recreation Committee, the Arena Fundraising Committee, the Junior B Hockey Club, the Junior C Hockey Club, Niagara Falls Girls Hockey, Stamford Skating Club, as well as City staff. A special meeting was recently held on April 25, 2007 to confirm support of the user groups for a 4 -pad arena complex. The community users are in support of a four -pad arena complex. There is a commitment to continue to raise $1.5 million in fundraising. A four -pad will better be able to accommodate the needs of all user groups. The community users support the proposed revenue model. In recognition of the fact that the 4 -pad arena option is more financially viable, and has significant support from the major user groups, it is recommended that Council authorize staff to proceed with the appropriate steps to commence construction of the 4 -pad arena complex. Recommended by: Approved by: Respectfully submitted: C L-4 Minis Denyse(Morrissey, Director arks, Recreation Culture 4 (A Ce L.. c AA Dujlovic, Exectftive Dir ommun' Services MacDonald, Chief Administrative b er APPENDIX 1 DETAILED ANNUAL OPERATING AND FINANCIAL EFFICIENCIES EXPENSES Arena Memorial Chippawa Stamford /Jack Bell Total REVENUES Arena Memorial Chippawa Stamford /Jack Bell Total Operating Cost of Operating $981,004 34.94% $703,520 25.06% $1,123,121 40.00% $2,807,645 100% Revenue of Revenue $306,035 23.55% $299,395 23.04% $694,158 53.41% $1,299,588 100.00% NET OPERATING COST /SUBSIDY PER YEAR $1,508,057 By Arena Memorial $674,969 44.76% Chippawa $404,125 26.80% Stamford /Jack Bell $428,963 28.44% Total $1,508,057 100.00% EXPENSES Arena 2 Pad (3,000 seats) Chippawa Stamford /Jack Bell Total Operating Cost of Operating $1,245,000 $703,520 $1,123,121 $3,071,641 40.53% 22.90% 36.56% 100.00% REVENUES Arena 2 Pad (3,000 seats) $907,000 47.72% Chippawa $299,395 15.75% Stamford /Jack Bell $694,158 36.52% Total $1,900,553 100.00% Revenue of Revenue NET OPERATING COST /SUBSIDY PER YEAR $1,171,088 2 Pad (3,000 seats) $338,000 28.86% Chippawa $404,125 34.51% Stamford /Jack Bell $428,963 38.63% Total $1,171,088 100.00% TIQ. r a EXPENSES Arena 4 Pad (2,000 seats)* Chippawa Total REVENUES Arena 4 Pad (2,000 seats) Chippawa Total Operating Cost $2,011,500 $703,520 $2,715,020 Revenue $1,767,000 $299,395 $2,066,395 of Operating 74.09% 25.91% 100% of Revenue 85.51% 14.49% 100% NET OPERATING COST /SUBSIDY PER YEAR $648,625 *annual operating costs includes $60 K per year contribution to reserve each year. 4 Pad (2,000 seats) $244,500 Chippawa $404,125 Total $648,625 38% 62% 100% C: \Documents and Settings\kh1011Local Settings \Temp\XPgrpwisetAppendix 1 REVISEDDetailed Annual Operating and Financial Efficiencies.wpd FINANCIAL COMPARISONS: SUMMARY Excludes extemal site servicing requirements which are to be addressed separately by the Works Department 2 Does not include potential CNH revenues 2 Debt $87,000 per million applied per year 4 Impact to tax levy based on 1% increase for every $406,000 in additional debt payments (based on 2006 General Tax Levy) APPENDIX 2 2 Pads 3,000 Main Bowl 158,800 sq.ft. 4 Pads 2,000 Sean Main Bowl 196,600 sq.ft. 1.0 Estimated Capital Cost' 28,325,000.00 34,700,000.00 2.0 Capital Funding Sources 2.1 s.37- Hilton' 1.200,000.00 1,200,000.00 2.2 Sale of Land Proceeds Memorial 1,100,000.00 1,100,000.00 2.3 Sale of Land Proceeds Stamford /Jack Bell N/A 650,000.00 2.4 Fund Raising 1,500,000.00 1,500,000.00 2.5 Naming Rights 500,000.00 750,000.00 2.6 Total Capital Funding Sources (2.1 to 2.5) 4,300,000.00 5,200,000.00 2:7 Amount of Debt Required to Fund Capital Costs (1.0 2.6) 24,025,000.00 29,500,000.00 3.0 Required Borrowing (on 2.7) 3.1 Tax Funded Annual Debt Payment 2,090,175.00 2,566,600.00 4.0 Financing Plan for Annual Debt Costs (on 3.1) 4.1 Allocation: Walker Funding 575,000.00 575,000.00 4.2 Allocation: Net Annual Arenas Operating Savings 336,969.00 859,432.00 4.3 Total Debt Financing Available Per Year (4.1 4.2) 911,969.00 1,434,432.00 5.0 Summary: Difference Annual City Debt (3.1) and Total Financing Available (4.3) 5.1 Total Additional Tax Funded Debt Payment Per Year 1,178,206.00 1,132,068.00 6.0 Impact to Tax Levy' 6.1 Impact to tax levy (on 3.1) 5.15 6 32 6.2 Impact to tax levy (5.1) with financing plan allocations 2.90 2.79 FINANCIAL COMPARISONS: SUMMARY Excludes extemal site servicing requirements which are to be addressed separately by the Works Department 2 Does not include potential CNH revenues 2 Debt $87,000 per million applied per year 4 Impact to tax levy based on 1% increase for every $406,000 in additional debt payments (based on 2006 General Tax Levy) APPENDIX 2 Office of the Mayor Inter Department Memorandum TO: Thanks, Kristine Dean Iorfida FROM:. .Kristine Speck Ext. 4205 RE: Council Information NM. FALLS CLERKS' t)` 050311;1? DATE: May 2, 2007 Hello Dean: Would you please have the attached information from the Canadian Cystic Fibrosis Foundation regarding a request for a proclamation for the month of distributed to the council. 5/2/2007 Ted Sa ci Proclamation Request Pase 1 From: "Mary-Ellen Bann" <mbenn2 @cogeco.ca> To: <tsalci @city.niagarafalls.on.ca> Date: 5/2/2007 11:38 AM Subject: Proclamation Request Attachments: Proclamation.doc May 2, 2007 Your Worship, I am writing to ask you to please join members of the Niagara Chapter of the Canadian Cystic Fibrosis Foundation in the fight against cystic fibrosis (CF). We would appreciate it if you would help raise awareness of this fatal disease in our city by reading the attached proclamation declaring May Cystic Fibrosis Awareness Month, during a council meeting. Our chapter members are deeply appreciative of the support of our community in the fight against (CF) the most common, fatal genetic disease affecting young Canadians. Every year in May, the Niagara Chapter marks Cystic Fibrosis Awareness Month by holding various fundraising events, including the Great StridesT walk on the last Sunday in May, to raise money for vital CF research and care. Cystic Fibrosis is a multi -organ disease that affects primarily the lungs and the digestive system. Currently, there is no known cure for CF, but there is real hope. Should you have any questions, please contact me at 905-834-0418 or email mbenn2 @cogeoo.ca On behalf of young Canadians with cystic fibrosis in Niagara Falls, and across the country, thank you for your consideration. Sincerely, Mary-Ellen Scotney 5/2/2007 Ted Salci Proclamation Re. uest Pase 2 President, Niagara Cystic Fibrosis Chapter mbenn2 @cogeco.ca www.niagaracysticfibrosischapter.org <http://www.niagaracysticfibrosischapter.org/> Help Make CF stand for Cure Found Attach: Proclamation letter May is Cystic Fibrosis Awareness Month May 2007 Whereas the Canadian Cystic Fibrosis Foundation (CCU° is a Canada -wide, health charity, with more than 5o volunteer chapters, whose mission in to raise monies to fund cystic fibrosis (CF) research and care: The CCFF is a world leader in the fight against CF. The gene responsible for CF was identified in 1.989 by a Canadian- led team of researchers supported by the Foundation. Canadian investigators continue to play a leading role in the worldwide race to find a cure or control for the disease. The Niagara Chapter is deeply grateful for the generous support and help from countless donors and volunteers. Join the fight against the most common, fatal, inherited disease affecting young Canadians at the annual Great StridesIm walk on Sunday, May, 27, 2007 at.Zooz in Stevensville from 9:00 a.m. Now therefore, I, Mayor, Ted Salci, on behalf of the Niagara Falls City Council, do hereby proclaim May 2007 as "Cystic Fibrosis Awareness Month" and encourage all residents to support the fight against the devastating disease by participating in the Great StridesTM walk May 7, 2007 L- 2007 -24 His Worship Mayor Ted Salci and Members of the Municipal Council City of Niagara Falls, Ontario Members: RECOMMENDATION: (i) BACKGROUND: Niagaraf'alls CANADA Re: L- 2007 -24 Declare Surplus and Authorize Land Exchange and Lease Agreement with 1251435 Ontario Limited "IBF Union Avenue Our File No.: 2005 -367 1. That Council pass the By -law appearing on tonight's agenda to declare surplus the lands designated as Part 8 on Reference Plan 59R- 13223, being Union Avenue, as stopped up and closed by By -law No.2007 -83; and 2. That Council pass the By -laws appearing on tonight's agenda to authorize the execution of: The temporary Lease by the City to IBF of part of Union Avenue, as stopped up and closed for the parking of motor vehicles thereon, pending the completion of the land exchange; and (ii) The above noted Agreement providing for the sale by the City to IBF of Part 8 on Reference Plan 59R- 13223, in exchange for a conveyance to the City by IBF of the lands designated as Part 4 on Reference Plan 59R- 13223. On April 3 2006 Council authorized City Staff to work with IBF and the adjacent St. Paul's Church in order to attempt to facilitate the preservation of parking spaces on IBF's lands for the Church's use for its handicapped congregation members, once the IBF Hotel redevelopment was concluded. On March 26, 2007 Council gave approval, in principle, to a proposed solution of this matter facilitated by City Staff; as directed by Council; and agreed to by the parties. The solution agreed to provides for the City to sell to IBF Part 8 on Plan 59R- 13223, a copy of which is attached hereto, being Union Avenue as stopped up and closed by By -law No. 2007 -83, in exchange for a conveyance from IBF to the City 4310 Queen Street, P0. Box 1023, Niagara Falls, ON, Canada L2E 6X5 905- 356 -7521 www.niagarafalls.ca Working Together to Serve Our Community Corporate Services Department Legal Services May 7, 2007 of Part 4 on Plan 59R- 13223. The two parcels of land are of virtually equal value as appraised, since Union Avenue is almost entirely encumbered by underground utilities that render it effectively limited to non building uses. The result of the exchange will allow the Church to continue to use Part 4 for parking for its handicapped congregation members near the elevator in its building during Sunday mornings, under a lease to be entered into with the City once the land exchange is complete. IBF will be able to create new parking spaces for its redeveloped hotel on Union Avenue in lieu of the land being conveyed to the City. The lands to be conveyed to the City will be available to the City for public commercial parking, other than on Sunday mornings, together with a strip of land from the Church, thereby enabling the City to generate income from the lands acquired from IBF. As the land exchange agreement is conditional upon re- zoning the westerly portion of Union Avenue to permit its use for the parking of motor vehicles, the Lease appearing on tonight's agenda will provide IBF temporary use of the easterly portion of Union Avenue for parking motor vehicles while the re- zoning process is under way and pending completion of the land exchange. In addition, IBF will be permitted, on a temporary basis during May and June, to utilize eleven parking spaces by permit in the City's Kitchener Street public parking lot pending completion of the land exchange. Notice of Council's intention to consider declaring Part 8 as surplus and authorizing its sale under the terms of the Agreement referred to above has been published in the Niagara Falls Review in accordance with The Corporation of the City of Niagara Falls By -law No. 2003 -16. Recommended by: f /J netem Kenneth L. Beaman, Acting City Solicitor Approved by: A Burden, Acting Director sf Corporate Services Respectfully submitted: A/ to K. Beaman /L. Banks MacDonald, Chief Ad 2 L- 2007 -24 inistrative Officer CITY OF NIAGARA FALLS By -law No. 2007 A by -law to declare Park Street Plan 9 aka Union Avenue surplus. WHEREAS the said Park Street Plan 9 aka Union Avenue is no longer required by the City and it is deemed desirable to declare the subject land surplus to the City's needs; AND WHEREAS subsection 268(3)(a) of the Municipal Act, 2001, provides that prior to selling any land, every municipality and local board shall by by -law or resolution declare the land to be surplus; AND WHEREAS the Council of The Corporation of the City of Niagara Falls now deems it expedient to pass this by -law; NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE CITY OF NIAGARA FALLS ENACTS AS FOLLOWS: Park Street Plan 9 Town of Niagara Falls aka Union Avenue in the City of Niagara Falls, in the Regional Municipality of Niagara, is hereby declared surplus. Passed this seventh day of May, 2007. DEAN IORFIDA, CITY CLERK R.T. (TED) SALCI, MAYOR First Reading: Second Reading: Third Reading: May 7, 2007. May 7, 2007. May 7, 2007. A by -law to authorize the execution of an Agreement with 1251435 Ontario Limited, respecting the exchange of lands for the development of a public parking lot and private parking spaces over a portion of a closed road allowance known municipally as Union Avenue. THE COUNCIL OF THE CORPORATION OF THE CITY OF NIAGARA FALLS ENACTS AS FOLLOWS: 1. An Agreement dated May 7, 2007 between The Corporation of the City of Niagara Falls as City and 1251435 Ontario Limited as IBF, providing for an exchange of lands to facilitate the development of a public parking lot by the City, and the development of additional private parking spaces by IBF for its abutting hotel located at 5525 Victoria Avenue, in the City of Niagara Falls, as attached hereto, is hereby approved and authorized. 2. The Mayor and Clerk are hereby authorized to execute the said Agreement and all other documents that may be required for the purpose of carrying out the intent of this by -law. 3. The Clerk is hereby authorized to affix the corporate seal thereto and to deliver such documents. Passed this seventh day of May, 2007. DEAN IORFIDA, CITY CLERK R. T. (TED) SALCI, MAYOR First Reading: Second Reading: Third Reading: May 7, 2007. May 7, 2007. May 7, 2007. CITY OF NIAGARA FALLS By -law No. 2007 THIS AGREEMENT made the 7 day of May, A.D. 2007. BETWEEN: The Corporation of the City of Niagara Falls Hereinafter referred to as the "City" Party of the FIRST PART; -and 1251435 Ontario Limited Hereinafter referred to as "IBF" Party of the SECOND PART; WHEREAS the City is the registered owner of the lands firstly described in Schedule "A attached hereto; and WHEREAS IBF is the registered owner of the lands secondly described in Schedule "A", attached hereto and owns and operates a hotel at 5525 Victoria Avenue in the City of Niagara Falls known as the Inn by the Falls, hereinafter referred to as the "hotel"; and WHEREAS the parties wish to exchange lands as hereinafter set forth, subject to the terms of this agreement to facilitate the development of a public parking lot by the City hereinafter referred to as the "public parking lot" and the development of additional private parking spaces by IBF for the hotel. NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the amounts referred to herein and the mutual terms and conditions set forth, the Parties agree as follows: 1. The Parties agree that the recitals in this agreement are true and accurate and shall form part of the agreement. 2. The lands affected by this agreement are described in Schedule "A attached hereto, and are hereinafter referred to as the `lands 3. Subject to the terms of this agreement the Parties agree to the following exchange of lands: i. The City agrees to sell and IBF agrees to buy the lands firstly described in Schedule "A" hereto for the sum of $68,500.00; and ii. IBF agrees to sell and the City agrees to buy the lands secondly described in Schedule "A" hereto for the amount of $68,500.00. 4. The following tenns and conditions shall apply to the exchange of lands described in paragraph 3 with the understanding that the term `Vendor" shall refer to the Party selling or conveying lands, as the case may be, and the teen "Purchaser" refers to the Party buying or acquiring the lands, as the case may be: i. The Purchaser agrees to pay Vendor the balance of the Purchase Price, by certified cheque, subject to the usual adjustments, on the closing of this transaction. ii. The Vendor agrees to obtain and register, on or before closing, valid discharge(s) of any existing mortgages, liens or encumbrances on the real property, at its own expense. iii. The Purchaser shall not call for the production of any title deeds, abstract, survey or evidence of title except such as are in the possession or control of the Vendor. The Vendor agrees that, if requested by the Purchaser, he will deliver any existing survey, in its possession or within its control, to the Purchaser as soon as possible and prior to the last day allowed by examining title. iv. The deed or transfer shall, save and except for the Land Transfer Tax Affidavit, which shall be prepared and completed by the Purchaser, be prepared in a registerable form by the Vendor. v. The Purchaser shall be allowed up to 10 days prior to the date of closing, to examine title to the property, at its own expense, and to satisfy itself that there are no outstanding work orders affecting the property. If within that time any valid objection to title is made in writing to the Vendor, or its Solicitor, which the Vendor shall be unable or unwilling to remove and which the Purchaser will not waive, the contract arising out of the acceptance of this Offer shall, notwithstanding any intermediate acts or negotiations in respect of such objections, be null and void and all monies shall be retumed by the Vendor 2 without interest and it shall not be liable for any damages or costs. Save as to any valid objection so made within such time, the Purchaser shall be conclusively deemed to have accepted the title of the Vendor to the real property. vi. This agreement shall be completed 30 days after the conditions set out in paragraph 5 hereof have been completed or sooner if mutually agreed upon. vii. Provided that the title to the property is good and free from all encumbrances except as aforesaid and except for any registered restrictions or covenants that run with the land providing that such are complied with and except for any minor easements to public utilities tequired for the supply of domestic utility services to the property. If within the time allowed for examining the title any valid objection to title, or to any outstanding work order, or to the fact the said present use may not lawfully be continued, is made in writing to the Vendor and which Vendor is unable or unwilling to remove, remedy or satisfy and which Purchaser will not waive, this Agreement, notwithstanding any immediate acts or negotiations in respect of such objections, shall be at an end and the Vendor shall not be liable for any costs or damages. Save as to any valid objection so made by such day and except for any objection going to the root of title, the Purchaser shall be conclusively deemed to have accepted the Vendor's title to the property. viii. On the closing of this transaction, the Vendor shall convey the said lands to the Purchaser by a good and sufficient deed thereof in fee simple, free and clear of all encumbrances, except as to any restrictions or covenants and except for any easements or unless otherwise provided herein and shall deliver vacant possession of the said lands to the Purchaser free of all tenancies. ix. Taxes, local improvements, water and assessment rates shall be apportioned and allowed to the date of completion (the day itself to be apportioned to the Purchaser). x. This agreement and its acceptance is to be read with all changes of gender or number required by the context. xi. Any tender of documents or money hereunder may be made upon the Vendor or Purchaser or their respective solicitors acting for either party from whom tender 3 is desired on the day set for completion of the Agreement. Money may be tendered by bank draft or cheque certified by a Chartered Bank, Trust Company, Province of Ontario Savings Office, Credit Union or Caisse Populaire. xii. It is understood and agreed that Goods and Services Tax "GST') shall be the sole responsibility of the Purchaser. In this context: (a) The Purchaser shall be registered under subdivision d of Division V of the Part IX of the Excise Tax Act (Canada) (the "Act") for the collection and remittance of GST; (b) The Purchaser shall be liable, shall self assess and remit to the appropriate govenunental authority all GST which is payable under the Act in connection with the transfer of the Real Property made pursuant to the Agreement, all in accordance with the Act; (c) The Vendor shall not collect GST on Closing and shall allow the Purchaser to self assess and remit GST to the, Receiver General in accordance with the Act; (d) The Purchaser shall indemnify and save harmless the Vendor from and against any all GST, penalties, costs and/or interest which may become payable by or assessed against the Vendor as a result of any inaccuracy, misstatement or misrepresentation made by the Purchaser on the Closing Date in connection with any matter raised in this paragraph or contained in any declaration referred to herein; and (e) The Purchaser shall tender on closing a certificate and indemnity including verification of its registration number issued by Revenue Canada under the Act. xiii. Time shall in all respects be of the essence of this Agreement, which shall ensure to the benefit of and be binding upon the Parties hereto and their respective heirs, executors, administrators, successors and assigns. xiv. The Vendor covenants, represents and warrants to the Purchaser that the Vendor is not now and shall not on the Closing Date, be a non resident of Canada within the meaning ascribed thereto in the Income Tax Act (Canada). 4 xv. Any tender of documents (other than the Transfer/Deed of' Land) or money hereunder may be made upon the Vendor or the Purchaser, or upon their respective solicitors on the Closing Date, If the electronic registration system (the "Teraview Electronic Registration System" or "TERS is operative on a mandatory or optional basis in the applicable Land Titles Office in which the--- Real Property is registered, the following provisions shall prevail: (a) Each of the Purchaser and Vendor shall be obliged to retain a solicitor who is both an authorized TERS user and in good standing with the Law Society of Upper Canada, and who are hereby authorized by the parties hereto to enter into a document registration agreement in the form adopted by the Joint LSUC -CBAO Committee on Electronic Registration of Title Documents on September 19, 2000 or any successor version thereto (the "Document Registration Agreement" or "DRA together with the additional requirement that the registering solicitor shall also be obliged to provide the non registering solicitor with a copy of the registration report printed by TERS upon the registration thereof, within one (1) business day of the Closing Date. It is understood and agreed that the DRA shall outline or establish the procedures and timing for completing this transaction electronically and shall be executed by both the Vendor's solicitor and the Purchaser's solicitor and exchanged by courier or fax between such solicitors (such that each solicitor has a photocopy of telefaxed copy of the DRA duly executed by both solicitors) by no later than five (5) days before the Closing Date; (b) The delivery and exchange of documents, monies and keys to the Real Property and the release of them to the Vendor and Purchaser, as the case maybe: (i) Shall not occur contemporaneously with the registration of the Transfer/Deed of Land; and (ii) Shall be govemed by the DRA, pursuant to which the solicitor receiving any documents, keys and/or certified funds will be 5 required to hold them in escrow, and will not be entitled to release them except in strict accordance with the provisions of the DRA. (c) Each of the parties hereto agrees that the delivery of any documents not intended for registration on title to the Real Property may be delivered to the other party's solicitor by fax transmission (or by a similar system-- reproducing the original), provided that all documents so transmitted have been duly and properly executed by the appropriate parties /signatories thereto. The party transmitting any such documents shall also deliver the originals of same to the recipient party's solicitor within two (2) business days after the Closing Date, if delivery of the originals has been so requested by the recipient party or by its solicitor. (d) Notwithstanding anything contained in this Agreement or in the DRA to the contrary; it is expressly understood and agreed by the parties hereto that an effective tender shall be deemed to have been validly made by either party (in this paragraph called the "Tendering Party") upon the other party (in this paragraph called the "Receiving Party") when the solicitor for the Tendering Party has: (i) Delivered all applicable closing documents, keys and funds to the Receiving Party's solicitor in accordance with the provisions of the DEA; (ii) Advised the solicitor for the Receiving Party, in writing, that the Tendering Party is ready, willing and able to complete the transaction in accordance with the terms and provisions of this Agreement; and (iii) Completed all steps required by TERS to complete this transaction that can be performed or undertaken by the Tendering Party's solicitor without the cooperation or participation of the Receiving Party's solicitor, and specifically when the Tendering Party's solicitor has electronically "signed" the Transfer/Deed for completeness and granted "access" to the Receiving Party's 6 solicitor (but without the Tendering Party's solicitor releasing them for registration by the Receiving Party's solicitor), without the necessity of personally attending upon the Receiving Party or the Receiving Party's solicitor with the documents, keys and/or funds, and without any requirements to have an independent witness evidencing the foregoing. 5. Notwithstanding anything contained in this agreement, the parties agree that this agreement and the land exchange referred to in paragraph 3 hereof is conditional upon all of the following four events having first occurred, namely: i. The coming into force of a by -law of the City stopping up and closing and authorizing as surplus to City needs the sale to IBF of Union Avenue being the lands firstly described in Schedule "A" hereto. ii. The coming into force of a by -law of the City zoning the lands firstly described in Schedule "A" hereto to permit the use thereof by IBF for the parking of motor vehicles thereon in connection with its hotel. The City shall expeditiously initiate and process the aforesaid zoning application, provided however, that IBF acknowledges, understands and agrees that the City is not permitted in law to fetter its Council's discretion to consider the zoning application on its planning merits and in accordance with all relevant provisions and procedures under the Planning Act and that the City makes no representation, warranty, covenant, promise, undertaking or agreement of any kind whatsoever that the Council will approve the zoning application or pass the zoning by -law or that it will come into force. iii. The approval by the City and registration on title of an amendment to the existing site plan agreement for the hotel incorporating the lands firstly described in Schedule "A" hereto and deleting therefrom the lands secondly described in Schedule 7 "A" hereto and including provisions satisfactory to the City for a suitable landscaping/buffer set back along the westerly boundary of the lands firstly described in Schedule "A" hereto. The City shall expeditiously process the amendment once it has first received from IBF the completed application for the amendment to the existing site plan agreement including the requisite drawings and fees therefor. iv. The conveyance by the City of permanent easements over the lands firstly described in Schedule "A" hereto to Bell Canada, Cogeco Cable, Enbridge Gas and Niagara Falls Hydro to protect their existing utilities presently located within Union Avenue such easement to be in a form acceptable to the aforesaid utility companies and the reservation by the City to itself of a permanent easement over the lands firstly described in Schedule "A" hereto to protect its existing water main, storm sewer main and sanitary sewer main presently located within Union Avenue such easement to also be in a form acceptable to the City. v. IBF being satisfied in its sole and absolute discretion that it can relocate at a reasonable cost and within a reasonable time period the existing facilities of Niagara Falls Hydro and Bell Canada currently over the lands firstly described in Schedule "A" hereto. In the event that all of the foregoing events have not been concluded within six months from the date of this agreement, this agreement shall be null and void and at an end and there shall be no obligations existing between the parties related to this agreement, provided however, that the parties may mutually agree in writing to extend the aforesaid six month term. 6. The City agrees that following the coming into force of the by -law described in subparagraph (i) of paragraph 5 of this agreement, it will: (a) allow IBF to block off the road formerly known as Union Avenue and it will make available to IBF that part of the lands firstly described in Schedule "A" 8 hereto that are zoned for parking of motor vehicles by way of an exclusive licence for temporary permission to use the said lands for the parking of motor vehicles thereon in connection with the hotel, upon terms satisfactory to the City, pending completion of this Agreement, provided that the total licence fee to be paid by IBF to the City shall be $10.00 which shall be- credited to the City on the Statement of Adjustments in connection with the land exchange transaction; provided further that IBF shall have the right to place gravel on the lands firstly described in Schedule "A" hereto to make the lands functional as a temporary parking lot. Should this Agreement come to an end, ISF shall at its sole cost shall remove all gravel and other improvements on the said lands and shall return the lands to the condition that the lands were in at the time of the execution of this agreement. (b) make available to IBF up to eleven(11) parking spaces on the lands known as the Kitchener Street Municipal Parking Lot by way of a non exclusive licence for temporary permission to use the said lands for the parking of motor vehicles thereon in connection with the hotel upon terms satisfactory to the City during May and June, 2007 pending completion of this transaction; 7. Following completion forthwith of this agreement, IBF shall convey to the City by a good and sufficient deed, in fee simple, free from all encumbrances, the most northerly 3 feet in even perpendicular width of the lands firstly described in Schedule "N' hereto for the future widening of Kitchener Street, it being, understood that the City will first be responsible to obtain and register a reference plan for these purposes before the conveyance is made. This term of the agreement shall not be extinguished or merge upon the completion of the land exchange but shall continue to be in full force and effect thereafter. IN WITNESS WHEREOF the parties have caused this agreement to be executed by affixing their corporate seals attested by the signature of their proper officers duly authorized in that behalf. DATED at the City of Niagara Falls, in the Regional Municipality of Niagara, this 27 day of April, 2007 THE CORPORATION OF THE CITY OF NIAGARA FALLS R. Ted Salei, Mayor Dean Iodide, City Clerk 125 MITED Zid, `ejare "I ha e the authority to bind the corporation" el Bufa o, President 10 FIRSTLY: SECONDLY: SCHEDULE "A" Part 8 on Plan 59R- 13223, in the City of Niagara Falls, Regional Municipality of Niagara subject to the easements referred to in Paragraph 5 of said Agreement Part 4 on Plan 59R 13223, in the City of Niagara Falls, Regional Municipality of Niagara 11 A by -law to authorize the execution of a Lease Agreement with 1251435 Ontario Limited, respecting the short term lease of a portion of a closed road allowance known municipally as Union Avenue. THE COUNCIL OF THE CORPORATION OF THE CITY OF NIAGARA FALLS ENACTS AS FOLLOWS: 1. A Lease Agreement dated May 7, 2007 and made between 1251435 Ontario Limited as Lessee and The Corporation of the City of Niagara Falls as Lessor, respecting the lease of a portion of a closed road allowance known municipally as Union Avenue, for the Lessee's development of private parking spaces for a term of six months to be computed from the date of execution of the Lease Agreement, as attached hereto, is hereby approved and authorized. 2. The Mayor and Clerk are hereby authorized to execute the said Lease Agreement and all other documents that may be required for the purpose of carrying out the intent of this by -law. 3. The Clerk is hereby authorized to affix the corporate seal thereto and to deliver such documents. Passed this seventh day of May, 2007. DEAN IORFIDA, CITY CLERK R. T. (TED) SALCI, MAYOR First Reading: Second Reading: Third Reading: May 7, 2007. May 7, 2007. May 7, 2007. CITY OF NIAGARA FALLS By -law No. 2007 LEASE AGREEMENT THIS LEASE made this 7" day of May, 2007 in pursuance of the Short Forms of Leases Act, R.S.O. 1990, c. S.11, as amended, BETWEEN: THE CORPORATION OF THE CITY OF NIAGARA FALLS, a municipal corporation incorporated pursuant to the laws of the Province of Ontario, Hereinafter called the "Lessor and of the FIRST PART; 1251435 ONTARIO LIMITED a corporation incorporated pursuant to the laws of the Province of Ontario, Hereinafter called the "Lessee of the SECOND PART; WHEREAS the Lessor owns certain lands in the City of Niagara Falls firstly described in Schedule "A" attached hereto (the "Lessor's Lands AND WHEREAS the Lessee is desirous of leasing the Lessor's Lands in conjunction with the redevelopment of the Inn by the Falls Hotel (the "Lessee's Development on the Lessee's adjoining lands (the "Lessee's Lands and developing same as private parking spaces for the Lessee's Development. PREMISES. TERM AND RENTAL: 2 1. WITNESSETH that in consideration of the rents, covenants, conditions and agreements hereinafter reserved and contained on the part of the Lessee to be paid, observed and performed, the Lessor doth demise and lease unto the Lessee the Lessor's Lands. 2. TO HAVE AND TO HOLD the Lessor's Lands for and during the term of six (6) months to be computed from the date of execution of this Agreement by the parties hereto (the "Term LESSEE'S COVENANTS: 5. THE LESSEE COVENANTS WITH THE LESSOR: (a) To pay rent. (b) 3. YIELDING AND PAYING therefore during the Term to the Lessor, its successors and assigns without deduction or offset, the sum of TEN DOLLARS ($10.00) inclusive of applicable Goods and Services Tax, receipt of which is acknowledged by the Lessor. 4. PROVIDED THAT the Term shall be deemed to have expired upon either the purchase of the Lessor's Lands by the Lessee or the Agreement of Purchase and Sale attached hereto as Schedule "B" (the "Purchase Agreement being deemed null and void and at an end pursuant to paragraph 5 of the Purchase Agreement. To use the Lessor's Lands only for the purposes of private parking spaces for the 2 3 Lessee's Development. (c) To keep the Lessor's Lands and every part thereof in a clean and tidy condition and not permit garbage or waste or other objectionable material to accumulate thereon. (d) To abide by and comply with all lawful statutes, by -laws, rules and regulations of every parliamentary, legislative, municipal or other authority which in any manner relates to or affects the Lessor's Lands by reason of the tenancy of the Lessee; and to put the Lessor's Lands in such state of repair as to comply with the said statutes, by -laws, rules and regulations and to indemnify and save harmless the Lessor from any penalty, costs, charges or damages to which the said Lessor may be put or suffer by reason of having to alter the Lessor's Lands to conform with any such statute, by -laws, rules or regulations by reason of the tenancy of the Lessee. (e) To ensure that nothing is done or kept at or on the Lessor's Lands which is or may be a nuisance, or which causes damage or interference with normal usage of any adjoining property, provided that the Lessee's existing and proposed use of the Lessor's lands and Lessee's Lands, and the vehicles, supplies and equipment necessarily incidental thereto shall not be deemed to be, in and of themselves, a nuisance. (0 To provide, maintain and keep in force for and during the teen and any renewal thereof, public liability and property damage insurance in the name of the Lessee in respect of the Lessor's Lands and the Lessee's operation thereon, with a limit of 3 4 not less than TWO MILLION DOLLARS ($2,000,000.00) inclusive, and to furnish to the Lessor a Certificate of said coverage in a form satisfactory to the Lessor's Solicitor. 6. The Lessee accepts the Lessor's Lands in the condition existing at the date of commencement of the Term, and shall be responsible for the cost of any grading or other alteration or improvements required in order to prepare the Lessor's Lands for the purpose set out in paragraph (b) of clause 5. 7. The Lessee shall not assign or sublet the whole or any portion of the Lessor's Lands without the consent of the Lessor in writing first had and obtained, such consent not to be unreasonably withheld. Any assignment or subletting shall relieve the Lessee from the responsibility of observing and performing the covenants herein contained including the payment of rent for the whole of the Tenn of the within Lease and renewal thereof. ALTERATIONS. IMPROVEMENTS 8. (a) The Lessee shall be permitted to develop, at its sole cost and expense, a temporary gravel private parking lot upon the Lessor's Lands. 4 LESSOR'S COVENANTS: 9. THE LESSOR COVENANTS WITH THE LESSEE: (a) For quiet enjoyment. 10. PROVISO FOR RE -ENTRY for non payment of rent and/or non performance of covenants, subject to the provisions of the Lease. (a) ro) 5 If the Lessee shall fail to pay an instalment of rent payable hereunder when due and shall allow such default to continue for thirty (30) days, or shall fail to perform any of the covenants, conditions and agreements contained and shall allow any such default to continue for thirty (30) days, after receipt of written notice from the Lessor then the Lessor may take possession of the Lessor's Lands herein described and this Lease Agreement shall be terminated. In case suit shall be brought for recovery of possession of the Lessor's Lands, for the recovery of rent or any other amount due under the provisions of this Lease, or because of the breach of any other covenant herein contained on the part of the Lessee to be kept or performed, and a breach shall be established, the Lessee shall pay to the Lessor all expenses incurred therefore, including a reasonable solicitor's fee. 11. The Lessee agrees that the within Lease together with the Purchase Agreement attached hereto as Schedule "B" constitutes the entire understanding between the parties hereto 5 6 and that there are no representations or warranties, oral or otherwise, except as contained herein. 12. ARBITRATION (a) Any dispute between the parties hereto, whether arising during the period of this Lease or at any time thereafter which touch upon the validity, construction, meaning, performance or effect of this Lease or the rights and liabilities of the parties hereto or any matter arising out of or connected with this Lease shall be subject to arbitration pursuant to the Arbitrations Act (Ontario) and as provided in this paragraph and the decision shall be final and binding as between the parties hereto and shall not be subject to appeal. (b) Any arbitration to be carried out under this paragraph shall be subject to the following provisions namely: (i) The party desiring arbitration shall nominate one arbitrator and shall notify the other party hereto of such nomination. Such notice shall set forth a brief description of the matter submitted for arbitration and, if appropriate, the paragraph hereof pursuant to which such matter is so submitted. Such other party shall within thirty(30) days after receiving such notice, nominate an arbitrator and the two arbitrators shall select a chairman of the arbitral tribunal to act jointly with them. If said arbitrators shall be unable to agree in the selection of such chairman, the chairman shall be designated by the court upon application by either of the parties. (ii) The arbitration shall take place in the City of Niagara Falls, Ontario and the 6 7 chairman shall fix the time and place in the City of Niagara Falls, Ontario for the purpose of hearing such evidence and representations as either of the parties may present and, subject to the provisions hereof, the decisions of the arbitrators and chairman or any two of them in writing shall be binding upon the parties both in respect of procedure and the conduct of the parties during the proceedings and the final determination of the issue therein. Such arbitrators and chairman shall, after hearing any evidence and representations that the parties may submit, make their decision and reduce the same to writing and deliver one copy thereof to each of the parties hereto. The majority of the chairman and arbitrators may determine any matters of procedure for the arbitration not specified herein. (iii) If the party hereto receiving the notice of the nomination of an arbitrator by the party desiring arbitration fails within the said fifteen (15) days to nominate an arbitrator, then the arbitrator nominated by the party desiring arbitration may proceed alone to determine the dispute in such manner and at such time as he shall think fit and his decision shall, subject to the provisions hereof, be binding upon the parties. (iv) Notwithstanding the foregoing, any arbitration may be carried out by a single arbitrator if the parties hereto so agree, in which event the provisions of this paragraph shall apply mutatis mutandis. (v) The cost of the arbitration shall be borne by the parties hereto as may be specified in such determination. 7 8 (c) Submission to arbitration pursuant to the provisions of this paragraph shall be a condition precedent to the bringing of any action with respect to this Lease. 14. AND IT IS HEREBY DISTINCTLY UNDERSTOOD AND AGREED BY AND BETWEEN THE LESSOR AND THE LESSEE THAT: (a) The Lessor shall not be responsible in any way for any injury to any person or for any loss of or damage to any property belonging to the Lessee, or to employees, invitees or licensee's of the Lessee while such person or property is on the Lessor's Lands, unless such arise through the negligence of the Lessor, its servants, agents, invitees and licensees. The Lessee covenants to indemnify the Lessor of and from all loss, costs, claims or demands in respect of any injuries or damage referred to in this paragraph for which the Lessee is in law responsible, and against all fines, suits, claims, demands and actions of any kind to which the Lessor may become liable by reason of any breach, violation or non performance by the Lessee of any covenants, term or provision of this Lease, or by reason of any injury occasioned to or suffered by any person or any property because of any wrongful act, neglect or default by the Lessee or any of its employees, servants or agents. (b) The Lessee shall at all times indemnify and save harmless the Lessor from and against any and all claims, demands, losses, costs, charges, actions and other proceedings under the Construction Lien Act, R.S.O. 1990, c. C.30, as amended, in connection with any work done for the Lessee at or on the Lessor's Lands, and 8 9 shall at its own expense promptly see to the removal from the registered title to the Lessor's Lands of every claim for lien or certificate of action having to do with such work and in any event within three hundred and sixty-five (365) days of being notified in writing by the Lessor to do so, failing which the Lessor may see to such removal and recover the expense and all attendant costs from the Lessee as rent owing and in arrears. 15. Subject to paragraph 10(a), if the Lessee shall fail to perform any of the covenants or obligations of the Lessee under or in respect of this Lease, the Lessor may from time to time, in its discretion, perform or cause to be performed any of such covenants or obligations, or any part thereof, and for such purpose may do such things as may be -requisite, including, without limiting the generality of the foregoing, the right to enter upon the Lessor's Lands or any part thereof as the Lessor may consider requisite or necessary. The Lessee covenants that all expenses incurred and expenditures made by or on behalf of the Lessee shall be forthwith paid by it to the Lessor, upon receiving written demand, and failing payment, forthwith upon such demand, such amounts may be collected as rent in arrears. 16. IT IS HEREBY AGREED by and between the parties hereto that any notice in writing which either party may desire to give to the other with regard to any matter or thing in this Lease contained may be validly and effectually given by mailing the same by prepaid registered post or facsimile transmission, if intended for the Lessee, to: 9 The Corporation of the City of Niagara Falls 4310 Queen Street PO Box 1023 Niagara Falls, Ontario L2E 6X5 Attention: Dean Iorfida, City Clerk Telephone: (905) 356 -7521 Facsimile: (905) 356 -0759 and if intended for the Lessor, to: 1251435 Ontario Limited 5525 Victoria Avenue Niagara Falls, Ontario L2G 3L3 Attention: Telephone: Facsimile: with a copy to: Michael Bufalino (905) 374-6040 (905) 374-7715 Sullivan Mahoney LLP Barristers Solicitors 4781 Portage Road Niagara Falls, Ontario L2E 6B1 10 Attention: Rocco Vacca Telephone: (905) 357 -0500 Facsimile: (905) 357 -0501 and any such notice, if mailed, shall be conclusively deemed to be given to and received by the other party, three (3) business days after the mailing thereof or if sent by facsimile transmission, on the date the facsimile transmission was sent. 10 11 17. The captions in this Lease are for convenience only and are not to be considered as part of this Lease and do not in any way limit or amplify the terms and provisions of this Lease. 18. Words importing the singular number only shall include the plural and vice versa, and words importing the masculine gender shall include the feminine gender and words importing persons shall include firms and corporations and vice- versa. 20. Unless the context otherwise required, the word "Lessor" and the word "Lessee" whenever used herein shall be constructed to include and shall mean the successors and assigns of the Lessor and the successors and assigns of the Lessee. 21. Time shall be of the essence, save as otherwise provided herein. 11 12 IN WITNESS WHEREOF the Lessor and Lessee have affixed their respective corporate seals, attested by the hands of their respective officers duly authorized in that behalf on the date first written above. THE CORPORATION OF THE CITY OF NIAGARA FALLS Name: R.T. (Ted) Salci Title: Mayor Name: Dean Iorfida Title: City Clerk 1251435 ONT 0 LIMITED Michael Bufalino Title: President I have the authority to bind the Corporation 12 FIRSTLY: 13 SCHEDULE "A" Part 8 on Plan 59R- 13223, in the City of Niagara Falls, Regional Municipality of Niagara subject to the easements referred to in Paragraph 5 of the Agreement between The Corporation of the City of Niagara Falls and 1251435 Ontario Limited SECONDLY: Part 4 on Plan 59R 13223, in the City of Niagara Falls, Regional Municipality of Niagara 13 14 SCHEDULE "B" THIS AGREEMENT made the 7 day of May, A.D. 2007. BETWEEN: The Corporation of the City of Niagara Falls Hereinafter referred to as the "City" Party of the FIRST PART; -and 1251435 Ontario Limited Hereinafter referred to as "IBF" Party of the SECOND PART; WHEREAS the City is the registered owner of the lands firstly described in Schedule "A attached hereto; and WHEREAS IBF is the registered owner of the lands secondly described in Schedule "A attached hereto and owns and operates a hotel at 5525 Victoria Avenue in the City of Niagara Falls known as the Inn by the Falls, hereinafter referred to as the "hotel"; and WHEREAS the parties wish to exchange lands as hereinafter set forth, subject to the terms of this agreement to facilitate the development of a public parking lot by the City hereinafter referred to as the "public parking lot" and the development of additional private parking spaces by IBF for the hotel. 14 15 NOW THEREFORE THIS AGREEMENT WITNESSETH that in consideration of the amounts referred to herein and the mutual teens and conditions set forth, the Parties agree as follows: 1.The Parties agree that the recitals in this agreement are true and accurate and shall form part of the agreement. 2.The lands affected by this agreement are described in Schedule "A attached hereto, and are hereinafter referred to as the "lands 3.Subject to the terms of this agreement the Parties agree to the following exchange of lands: i. The City agrees to sell and IBF agrees to buy the lands firstly described in Schedule "A" hereto for the sum of $68,500.00; and ii. IBF agrees to sell and the City agrees to buy the lands secondly described in Schedule "A" hereto for the amount of $68,500.00. 4.The following terms and conditions shall apply to the exchange of lands described in paragraph 3 with the understanding that the term "Vendor" shall refer to the Party selling or conveying lands, as the case may be, and the term "Purchaser" refers to the Party buying or acquiring the lands, as the case may be: i. The Purchaser agrees to pay the Vendor the balance of the Purchase Price, by certified cheque, subject to the usual adjustments, on the closing of this transaction. 15 16 ii. The Vendor agrees to obtain and register, on or before closing, valid discharge(s) of any existing mortgages, liens or encumbrances on the real property, at its own expense. iii. The Purchaser shall not call for the production of any title deeds, abstract, survey or evidence of title except such as are in the possession or control of the Vendor. The Vendor agrees that, if requested by the Purchaser, he will deliver any existing survey, in its possession or within its control, to the Purchaser as soon as possible and prior to the last day allowed by examining title. iv. The deed or transfer shall, save and except for the Land Transfer Tax Affidavit, which shall be prepared and completed by the Purchaser, be prepared in a registerable form by the Vendor. v. The Purchaser shall be allowed up to 10 days prior to the date of closing, to examine title to the property, at its own expense, and to satisfy itself that there are no outstanding work orders affecting the property. If within that time any valid objection to title is made in writing to the Vendor, or its Solicitor, which the Vendor shall be unable or unwilling to remove and which the Purchaser will not waive, the contract arising out of the acceptance of this Offer shall, notwithstanding any intermediate acts or negotiations in respect of such objections, be null and void and all monies shall be returned by the Vendor without interest and it shall not be liable for any damages or costs. Save as to any valid objection so made within such time, the Purchaser shall be conclusively deemed to have accepted the title of the Vendor to the real property. 16 17 vi. This agreement shall be completed 30 days after the conditions set out in paragraph 5 hereof have been completed or sooner if mutually agreed upon. vii. Provided that the title to the property is good and free from all encumbrances except as aforesaid and except for any registered restrictions or covenants that run with the land providing that such are complied with and except for any minor easements to public utilities required for the supply of domestic utility services to the property. If within the time allowed for examining the title any valid objection to title, or to any outstanding work order, or to the fact the said present use may not Lawfully be continued, is made in writing to the Vendor and which Vendor is unable or unwilling to remove, remedy or satisfy and which Purchaser will not waive, this Agreement, notwithstanding any immediate acts or negotiations in respect of such objections, shall be at an end and the Vendor shall not be liable for any costs or damages. Save as to any valid objection so made by such day and except for any objection going to the root of title, the Purchaser shall be conclusively deemed to have accepted the Vendor's title to the property. viii. On the closing of this transaction, the Vendor shall convey the said lands to the Purchaser by a good and sufficient deed thereof in fee simple, free and clear of all encumbrances, except as to any restrictions or covenants and except for any easements or unless otherwise provided herein and shall deliver vacant possession of the said lands to the Purchaser free of all tenancies. 17 18 ix. Taxes, local improvements, water and assessment rates shall be apportioned and allowed to the date of completion (the day itself to be apportioned to the Purchaser). x. This agreement and its acceptance is to be read with all changes of' gender or number required by the context. xi. Any tender of documents or money hereunder may be made upon the Vendor or Purchaser or their respective solicitors acting for either party u 11 whom tender is desired on the day set for completion of the Agreement. Money may be tendered by bank draft or cheque certified by a Chartered Bank, Trust Company, Province of Ontario Savings Office, Credit Union or Caisse Populaire. xii. It is understood and agreed that Goods and Services Tax "GST shall be the sole responsibility of the Purchaser. In this context: (a) The Purchaser shall be registered under subdivision d of Division V of the Part IX of the Excise Tax Act (Canada) (the "Act for the collection and remittance of GST; (b) The Purchaser shall be liable, shall self assess and remit to the appropriate governmental authority all GST which is payable under the Act in connection with the transfer of the Real Property made pursuant to the Agreement, all in accordance with the Act; (c) The Vendor shall not collect GST on Closing and shall allow the Purchaser to self assess and remit GST to the Receiver General in accordance with the Act; 18 19 (d) The Purchaser shall indemnify and save harmless the Vendor from and against any all GST, penalties, costs and/or interest which may become payable by or assessed against the Vendor as a result of any inaccuracy, misstatement or misrepresentation made by the Purchaser on the Closing Date in connection with any matter raised in this paragraph or contained in any declaration referred to herein; and (e) The Purchaser shall tender on closing a certificate and indemnity including verification of its registration number issued by Revenue Canada under the Act. xiii. Time shall in all respects be of the essence of this Agreement, which shall ensure to the benefit of and be binding upon the Parties hereto and their respective heirs, executors, administrators, successors and assigns. xiv. The Vendor covenants, represents and warrants to the Purchaser that the Vendor is not now and shall not on the Closing Date, be a non resident of' Canada within the meaning ascribed thereto in the Income Tax Act (Canada). xv. Any tender of documents (other than the Transfer/Deed of Land) or money hereunder may be made upon the Vendor or the Purchaser, or upon their respective solicitors on the Closing Date. If the electronic registration system (the "Teraview Electronic Registration System" or "TERS is operative on a mandatory or optional basis in the applicable Land Titles Office in which the Real Property is registered, the following provisions shall prevail: 19 20 (a) Each of the Purchaser and Vendor shall be obliged to retain a solicitor who is both an authorized TERS user and in good standing with the Law Society of Upper Canada, and who are hereby authorized by the parties hereto to enter into a document registration agreement in the form adopted by the Joint LSUC -CBAO Committee on Electronic Registration of Title Documents on September 19, 2000 or any successor version thereto (the "Document Registration Agreement or "DRA together with the additional requirement that the registering solicitor shall also be obliged to provide the non registering solicitor with a copy of the registration report printed by TERS upon the registration thereof, within one (1) business day of the Closing Date. It is understood and agreed that the DRA shall outline or establish the procedures and timing for completing this transaction electronically and shall be executed by both the Vendor's solicitor and the Purchaser's solicitor and exchanged by courier or fax between such solicitors (such that each solicitor has a photocopy of telefaxed copy of the DRA duly executed by both solicitors) by no later than five (5) days before the Closing Date; (b) The delivery and exchange of documents, monies and keys to the Real Property and the release of them to the Vendor and Purchaser, as the case may be: (i) Shall not occur contemporaneously with the registration of the Transfer/Deed of Land; and 20 21 (ii) Shall be governed by the DRA, pursuant to which the solicitor receiving any documents, keys and/or certified funds will be required to hold them in escrow, and will not be entitled to release them except in strict accordance with the provisions of the DRA. (c) Each of the parties hereto agrees that the delivery of any documents not intended for registration on title to the Real Property may be delivered to the other party's solicitor by fax transmission (or by a similar system reproducing the original), provided that all documents so transmitted have been duly and properly executed by the appropriate parties/signatories thereto. The party transmitting any such documents shall also deliver the originals of same to the recipient party's solicitor within two (2) business days after the Closing Date, if delivery of the originals has been so requested by the recipient party or by its solicitor. (d) Notwithstanding anything contained in this Agreement or in the DRA to the contrary, it is expressly understood and agreed by the parties hereto that an effective tender shall be deemed to have been validly made by either party (in this paragraph called the "Tendering Party") upon the other party (in this paragraph called the "Receiving Party when the solicitor for the Tendering Party has: (i) Delivered all applicable closing 'documents, keys and funds to the Receiving Party's solicitor in accordance with the provisions of the DRA; 21 22 (ii) Advised the solicitor for the Receiving Party, in writing, that the Tendering Party is ready, willing and able to complete the transaction in accordance with the terms and provisions of this Agreement; and (iii) Completed all steps required by TERS to complete this transaction that can be performed or undertaken by the Tendering Party's solicitor without the cooperation or participation of the Receiving Party' 's solicitor, and specifically when the Tendering Party's solicitor has electronically "signed" the Transfer/Deed for completeness and granted "access" to the Receiving Party's solicitor (but without the Tendering Party's solicitor releasing them for registration by the Receiving Party's solicitor), without the necessity of personally attending upon the Receiving Party or the Receiving Party's solicitor with the documents, keys and/or funds, and without any requirements to have an independent witness evidencing the foregoing. 5.Notwithstanding anything contained in this agreement, the parties agree that this agreement and the land exchange referred to in paragraph 3 hereof is conditional upon all of the following four events having first occurred, namely: The coming into force of a by=law of the City stopping up and closing and authorizing as surplus to City needs the sale to IBF of 22 23 Union Avenue being the lands firstly described in Schedule "A" hereto. ii. The coming into force of a by -law of the City zoning the lands firstly described in Schedule "A" hereto to permit the use thereof by IBF for the parking of motor vehicles thereon in connection with its hotel. The City shall expeditiously initiate and process the aforesaid zoning application, provided however, that IBF acknowledges, understands and agrees that the City is not permitted in law to fetter its Council's diseietion to consider the zoning application on its planning merits and in accordance with all relevant provisions and procedures under the Planning Act and that the City makes no representation, warranty, covenant, promise, undertaking or agreement of any kind whatsoever that the Council will approve the zoning application or pass the zoning by- law or that it will come into force. iii. The approval by the City and registration on title of an amendment to the existing site plan agreement for the hotel incorporating the lands firstly described in Schedule "A" hereto and deleting therefrom the lands secondly described in Schedule "A" hereto and including provisions satisfactory to the City for a suitable landscaping/buffer set back along the westerly boundary of the lands firstly described in Schedule "A" hereto. The City shall 23 24 expeditiously process the amendment once it has first received from IBF the completed application for the amendment to the existing site plan agreement including the requisite drawings and fees therefor. iv. The conveyance by the City of permanent easements over the lands firstly described in Schedule "A" hereto to Bell Canada, Cogeco Cable, Enbridge Gas and Niagara Falls Hydro to protect their existing utilities_ presently located within Union Avenue such easement to be in a form acceptable to the aforesaid utility companies and the reservation by the City to itself of a permanent easement over the lands firstly described in Schedule "A" hereto to protect its existing water main, storm sewer main and sanitary sewer main presently located within Union Avenue such easement to also be in a form acceptable to the City. v. IBF being satisfied in its sole and absolute discretion that it can relocate at a reasonable cost and within a reasonable time period the existing facilities of Niagara Falls Hydro and Bell Canada currently over the lands firstly described in Schedule "A" hereto. In the event that all of the foregoing events have not been concluded within six months from the date of this agreement, this agreement shall be null and void and at an end and there shall be no obligations existing between the parties related to this agreement, 24 25 provided however, that the parties may mutually agree in writing to extend the aforesaid six month term. 6. The City agrees that following the coming into force of the by -law described in subparagraph (0 of paragraph 5 of this agreement, it will: (a) allow IBF to block off the road formerly known as Union Avenue and it will make available to IBF that part of the lands firstly described in Schedule "A" hereto that are zoned for parking of motor vehicles by way of an exclusive licence for temporary permission to use the said lands for the parking of motor vehicles thereon in connection with the hotel, upon terms satisfactory to the City, pending completion of' this Agreement, provided that the total licence fee to be paid by IBF to the City shall be $10.00 which shall be credited to the City on the Statement of Adjustments in connection with the land exchange transaction; provided further that IBF shall have the right to place gravel on the lands firstly described in Schedule "A" hereto to make the lands functional as a temporary parking lot. Should this Agreement come to an end, IBF shall at its sole cost shall remove all gravel and other improvements on the said lands and shall return the lands to the condition that the lands were in at the time of the execution of this agreement. (b) make available to IBF up to eleven(11) parking spaces on the lands known as the Kitchener Street Municipal Parking Lot by way of a non exclusive licence for temporary permission to use the said lands for the parking of motor 25 26 vehicles thereon in connection with the hotel upon terms satisfactory to the City during May and June, 2007 pending completion of this transaction; 7. Following completion forthwith of this agreement, IBF shall convey to the City by a good and sufficient deed, in fee simple, free from all encumbrances, the most northerly 3 feet in even perpendicular width of the lands firstly described in Schedule "A" hereto for the future widening of Kitchener Street, it being, understood that the City will first be responsible to obtain and register a reference plan for these purposes before the conveyance is made. This term of the agreement shall not be extinguished or merge upon the completion of the land exchange but shall continue to be in full force and effect thereafter. 26 27 IN WITNESS WHEREOF the parties have caused this agreement to be executed by affixing their corporate seals attested by the signature of their proper officers duly authorized in that behalf. DATED at the City of Niagara Falls, in the Regional Municipality of Niagara, this 27 day of April, 2007 THE CORPORATION OF THE CITY OF NIAGARA FALLS R. Ted SaIcI, Mayor Dean Iorfida, City Clerk 125143 NT LIMITED el Bufalino, President "I have the authority to bind the corporation" 27 FIRSTLY: 28 SCHEDULE "A" Part 8 on Plan 5914- 13223, in the City of Niagara Falls, Regional Municipality of Niagara subject to the easements referred to hi Paragraph 5 of said Agreement SECONDLY: Part 4 on Plan 59R- 13223, in the City of Niagara Falls, Regional Municipality of Niagara 28 CITY OF NIAGARA FALLS By -law No. 2007 A by -law to adopt, ratify and confirm the actions of City Council at its meeting held on the T day of May, 2007. WHEREAS it is deemed desirable and expedient that the actions and proceedings of Council as herein set forth be adopted, ratified and confirmed by by -law. NOW THEREFORE THE COUNCIL OF THE CORPORATION OF THE CITY OF NIAGARA FALLS ENACTS AS FOLLOWS: 1. The actions of the Council at its meeting held on the 7 day of May, 2007 including all motions, resolutions and other actions taken by the Council at its said meeting, are hereby adopted, ratified and confirmed as if they were expressly embodied in this by -law, except where the prior approval of the Ontario Municipal Board or other authority is by law required or any action required by law to be taken by resolution. 2. Where no individual by -law has been or is passed with respect to the taking of any action authorized in or with respect to the exercise of any powers by the Council, then this by -law shall be deemed for all purposes to be the by -law required for approving, authorizing and taking of any action authorized therein or thereby, or required for the exercise of any powers thereon by the Council. 3. The Mayor and the proper officers of the Corporation of the City of Niagara Falls are hereby authorized and directed to do all things necessary to give effect to the said actions of the Council or to obtain approvals where required, and, except where otherwise provided, the Mayor and the Clerk are hereby authorized and directed to execute all documents arising therefrom and necessary on behalf of the Corporation of the City of Niagara Falls and to affix thereto the corporate seal of the Corporation of the City of Niagara Falls. Passed this seventh day of May, 2007. DEAN IORFIDA, CITY CLERK R. T. (TED) SALCI, MAYOR First Reading: Second Reading: Third Reading: May 7, 2007. May 7, 2007. May 7, 2007.