Exhibition Place wants to extend lease for

Muzik nightclub until 2034

MGM Casino Drawing

By: Staff Torstar News Service Published on Tue May 14 2013

Exhibition Places push to add another 10 years to the lease of a nightclub in the old
Horticulture Building, without a competitive bid process, is on hold.
Some are questioning why the city agencys board of governors approved Muziks 10year extension, until 2034, given MGM Resorts campaign to win rights to build a
massive casino resort on the Exhibition grounds.
It just made no sense to me, said Hugh Mansfield, one of two citizen board members
to vote against the proposal at a December meeting.
Why, in the middle of a larger development discussion, would you single out individual
properties for considerable lease extensions?
Mayor Rob Ford has railed against untendered lease extensions, including one granted
to Boardwalk Caf in the eastern beaches and another that was proposed for newsstands
in TTC stations.
The Muzik deal, which requires council approval, has the backing of Exhibition Place
board chair Councillor Mark Grimes, a staunch Ford ally.
Grimes did not return Torstar News Service's request for comment.

Muzik Clubs Inc. won a competitive process to occupy the building and grounds from
2004 until 2024. It operates upscale Muzik club on Saturday nights and hosts corporate
gatherings, photo shoots and other events.
Muziks Zlatko Starkovski proposed building three outdoor swimming pools, plus
cabanas and change rooms, for his patrons. Exhibition Place would extend his lease by a
decade so he could recoup the $5 million or more Muzik would spend on the
improvements.
Exhibition Place chief executive Dianne Young recommended the board approve the
extension. If the lease remained the same, they wouldnt do the upgrades, she said in
an interview.
When they are busier we are busier because we get all the parking revenues from them.
We get a lot of positive revenues from them . . . we got more rent.
The staff report says Muzik had, in the past, paid $576,000 in rent and contributed
$975,000 to parking revenues, $420,000 in property taxes and $175,000 net services.
Exhibition Place is not revealing terms of the proposed extension.
Minutes of the December meeting state Grimes provided a brief history of the club and
assured the board appropriate research was done on the extension proposal.
Councillor Gloria Lindsay Luby, another board member, moved the recommendation
which passed 4-2.
Lindsay Luby said in an interview Muzik has helped bring life and revenues to
Exhibition Place and I can see that it might be a nice thing on a hot summers evening
to step out, to one of the pools.
I didnt see (the lease extension) as sole-sourced. I just didnt see that way. I thought
they were doing a good job and wanted them to be there because theyre popular.
How the Ford administration would react to a sole-sourced lease extension from a board
headed by a hand-picked ally remains to be seen.
The citys legal department says the pools would be on land designated Open Space,
meaning any lease longer than 21 years would require a change to the citys official plan.
Starkovski said in an email he now has plans for $7 million to $10 million in
improvements, possibly including a retractable cover to allow year-round pool use. But,
after costly leaking and flooding in the Horticulture Building, the expansion project is
on hold.
We would need even more investment and further time to amortize these costs . . . , he
wrote. To be clear, we currently do not have an approval for an extension as it has not
gone to city council. http://www.metronews.ca/news/toronto/2013/05/14/exhibitionplace-wants-to-extend-lease-for-muzik-nightclub-until-2034.html