Note 6: Commitments
a) Premises lease commitments
In September 1996, the College entered into a long-term lease agreement, which expires November 30, 2012. The lease is for four floors of office space at 121 Bloor Street East, Toronto. In addition to a rent-free period until November 30, 1997 (valued at $615,300), the College obtained an allowance for leasehold improvements of $2,356,891, which is repayable out of rental payments.
The estimated annual rental payments, including a provision for operating costs under the lease agreement, are as follows:
| Year ending December 31 | $ (thousands) |
|---|---|
| 2010 | 1,964 |
| 2011 | 1,964 |
| 2012 | 1,801 |
| 5,729 |
b) Other operating lease commitments
The College has entered into various operating lease commitments for office equipment. The estimated annual payments for these operating lease commitments are as follows:
| Year ending December 31 | $ (thousands) |
|---|---|
| 2010 | 54 |
| 2011 | 35 |
| 2012 | 2 |
| 91 |
c) Premises purchase commitment
The College entered into a conditional agreement to purchase eight floors of an office building at 101 Bloor Street West for a total cost of $28.6 million. The purchase of the property is to be financed through a $20 million mortgage and an $8.6 million drawdown from the College’s reserve for stabilization of facility costs. As at December 31, 2009, the College had made a deposit on the purchase of $3 million, which is included in deposits and prepaid expenses. Possession is expected in the second half of 2010.