September 19, 2016

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Vol. CXXXVII, No. 3 September 19, 2016 thevarsity.ca —— The University of Toronto’s Student Newspaper Since 1880

Court sends Vic, tenants back to arbitration

Blues bring it home Homecoming coverage sheds light on U of T’s approach to the tradition and why it falls short in comparison to the spectacles south of the border Page 21

Decision forms most recent development in Victoria University’s legal dispute with commercial tenants Emaan Thaver & Tom Yun Associate News Editor & News Editor

CHRISTINE SUN/THE VARSITY

Daren Smith, Meric Gertler, Beyond Divestment In the wake of a call for responsible investment, UTAM leadership change, The Varsity talks money with the two people at the helm Alex McKeen Editor-in-Chief

Daren Smith’s new job as U of T’s chief money manager is unparalleled in Ontario. Last year, Smith’s predecessor brought in the second highest public sector salary in the province. Chartered Financial Analyst William Moriarty acted as President and CEO of the University of Toronto Asset Management corporation (UTAM) for eight years. In 2015, he was paid a handsome sum of $1,473,445.98; he then retired in April 2016. Smith assumed the role on September 1, under the slightly altered title, ‘President and Chief Investment Officer.’ The title change is a distinction without a difference though; his new job is to lead UTAM as a business and as an investment manager. The UTAM office is housed in the heritage building at MaRS Discovery District, an institution well

known for existing at the nexus of the public and private sector. It is a fitting location for the corporation, whose sole client — the University of Toronto — is also its owner. UTAM was established in 2000 to oversee the management of three University of Toronto funds: the Long-term Capital Appreciation Pool (LTCAP), which includes the university’s endowment; the university’s pension funds; and the Expendable Funds Investment Pool (EFIP), which is used for operations costs and other short-term expenses. The UTAM team does not form investment portfolios from their office at MaRS but instead hires various external portfolio managers who they believe will deliver high returns. Universities in Ontario usually leave the management of their investments to governance committees and staff members. No other university in Ontario owns a separate not-for-profit corporation for

this purpose, making UTAM unique. A costly endeavour, in 2015, the top six paid UTAM employees earned $4,330,616.06 collectively — about $800,000 more than what the university’s president and 11 vice presidents earned altogether. This compensation figure does not include any of the fees paid to portfolio managers, which can also be high. At the same time, U of T stands apart from other Ontario universities in the sheer size of its assets. About $7.9 billion is currently managed by UTAM, with $2.1 billion of that amount comprising the university’s endowment. By comparison, Queen’s University has an endowment of $912 million, and that of the University of Western Ontario (UWO) is valued at $586 million, according to the universities’ most recent reports. Tucked away off the boundary of UTSG and in the fine print of U of T’s financial reporting, UTAM seldom draws the attention of stu-

dent groups. Two weeks after Smith assumed the corporation’s top job, The Varsity sat down with him to discuss many of the considerations that accompany managing $7.9 billion on behalf of a university. Beyond divestment, ethical investing In late March 2016, U of T President Meric Gertler rejected the recommendations of the Presidential Advisory Committee on Divestment from Fossil Fuels to divest from companies complicit in climate change and released the report Beyond Divestment: Taking Decisive Action on Climate Change. This turned out to be a decisive moment for UTAM, which received news of Moriarty’s departure around the same time. The report called on UTAM to implement environmental, social, and governance (ESG) factors in their investing, a term used widely by ethical investment groups such as the United Nations Principles for Responsible UTAM, page 4

Victoria University has been embroiled in legal disputes for years with the tenants of the land it owns in Toronto’s upscale Yorkville neighbourhood. The most recent development is a decision from the Court of Appeal for Ontario dismissing appeals by both Victoria University and its tenants on a 2014 Superior Court decision. The 2014 decision called for the parties to return to the same arbitral panel that had previously overseen its rent reset negotiations in 2010. Victoria University has been involved in two 100-year lease agreements since 1960 with Revenue Properties Company Limited and GE Canada Real Estate Equity Holding Company for 131 and 151 Bloor Street West, respectively. While Victoria University owns the land, the brick-and-mortar is owned by the tenants. Both properties are the site of luxury retail and office spaces on the Bloor Street West corridor in downtown Toronto. The building at 131 Bloor Street West — commonly known as The Colonnade — also houses rental apartments. Rent resets, land valuation disputes The leases for the properties were fixed for a 30-year period, after which point, they were subject to a rent reset and the terms of leases had to be renegotiated. The first rent reset occurred in 1990: Victoria University and the tenants disagreed on how a fair market value of the land should be assessed. The dispute could not be worked out in arbitration and was forwarded to the Divisional Court. Victoria University, page 3

Comment

Arts & Culture

Science

Commute in comfort Three suggestions on how to improve the commuter experience

Read your heart out Exploring independent bookstores near campus

Battling bacteria Antibiotic resistance is a medical road block

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