Request for a Line of Credit Guarantee for Toronto Artscape Inc.

In response to these challenges, Artscape's Board of Directors has adopted a restructuring plan to reduce debt through asset sales and refocus the organization on its core mandate of providing affordable live, work and presentation space for artists. Artscape has requested that the City guarantee a $1.5 million extension to its existing line of credit with TD Bank to allow the organization to meet its cash flow needs while it pursues urgent financial and strategic restructuring through asset sales. Artscape is eligible to receive a guarantee under the Line of Credit Guarantee Policy, based on the organization's existing financial relationship with the City. Details on the proposed terms of the guarantee are included in the attached report. This request is time sensitive to ensure that Artscape has the necessary support to successfully undertake its restructuring over the course of the summer. I am recommending that we add this important matter as new business to be considered at our July 11 meeting.

The City's Line of Credit Extension Guarantee shall expire on the earlier of the completion of Toronto Artscape Inc.'s sale of Launchpad or other property, or October 31, 2023, and b. Should the lender require payment of the City's $1.5 million guarantee, the Chief Financial Officer and Treasurer will take action to remit payment within 15 days of written notification by the lender. 2. City Council direct the Chief Financial Officer and Treasurer, in consultation with the Deputy City Manager, Community and Social Services, and the City Solicitor, to negotiate and enter into any necessary agreements to provide the Line of Credit Guarantee to Toronto Artscape Inc., and to take any security deemed necessary by and to the satisfaction of the Chief Financial Officer and Treasurer, in a form satisfactory to the City Solicitor. 3. City Council direct that, should the Line of Credit Guarantee become payable by the City, the payment would be accommodated through a reallocation of funds within the Economic Development and Culture Division's 2023 Approved Operating Budget. 4. City Council authorize and direct appropriate City Officials to take such action as may be necessary to implement City Council's decision.