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City of Toronto Council and Committees |
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All Council and Committee documents are available from the City of Toronto Clerk's office. Please e-mail clerk@city.toronto.on.ca.
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January 28, 1998
To: Corporate Services Committee
From: Commissioner of Corporate Services
Subject: Lease of Ground Floor Space at 111 Wellesley Street East, City of Toronto
(Ward - Downtown)
Purpose:
To lease the subject property to 1133708 Ontario Limited.
Funding Sources, Financial Implications and Impact Statement:
This lease will generate revenue of approximately $132,000.00 plus realty taxes for the term of the lease.
Recommendations:
It is recommended that:
(1) the City of Toronto enter into a lease agreement with 1133708 Ontario Limited on the terms and conditions outlined in this report and in the form acceptable to the City of Toronto Solicitor; and
(2) the appropriate City of Toronto Officials be authorized and directed to take the necessary action to give effect thereto.
Council Reference/Background/History:
Metropolitan Council, by the adoption of Clause No. 26 of the Management Committee Report No. 30, on July 7 and 8, 1993, approved the acquisition of the commercial portion of the property located at 111 Wellesley Street East. The previous tenant of the ground floor space has since been terminated and the space containing approximately 111.48 square metres (1,200 square feet) of usable area is now vacant and available for lease to another tenant.
Comments and/or Discussion and/or Justification:
Negotiations were conducted with Mr. Suck-Kwon Yoon of 1133708 Ontario Limited, 100 Banmoor Boulevard, Scarborough, Ontario M1J 2Z6, and agreement has been reached on the following terms and conditions:
(1) Leased Premises:
A ground floor commercial unit at the address municipally known as 111 Wellesley Street East, in the City of Toronto.
(2) Area of Leased Premises:
The useable area of leased premises is approximately 111.48 square metres (1,200 square feet).
(3) Lease Term:
Five (5) years from Commencement Date, with an option to renew for a further five (5) years, subject to the same terms and conditions, except the net rent which shall be the then market rent.
(4) Commencement Date:
First day of the month following the execution of the Lease.
(5) Rent:
(i) Net Rent:
The greater of a base rent of $2,200.00 per month, net, or a percentage rent of seven per cent. (7%) of the gross annual sales/revenue when the gross annual sales/revenue exceeds $700,000.00.
The Tenant shall, at its expense, submit to the Landlord an audited statement of its gross annual sales/revenue at the end of each 12-month period.
(ii) Additional Rent:
The Tenant shall pay all applicable taxes (including but not limited to realty and business taxes and G.S.T.) and all operating expenses related to the operation and maintenance of the leased premises and proportionate share of operating costs of the building and common areas, including but not limited to: cost of all utilities and services; garbage disposal; exterior window cleaning (4 times a year); structural repairs, improvements, additions or alterations to the building and installation, repair, maintenance and replacement of any electrical, mechanical, plumbing, heating, ventilation and air-conditioning equipment and systems existing or which the Tenant may install.
(6) Use:
The leased premises shall not be used for any purpose other than a variety store. The Tenant, at its sole expense, shall obtain necessary zoning, if required, for its intended use(s) and proof of such shall be submitted to the Landlord.
(7) Hours of Operation:
The Tenant =s operation shall be conducted and open to the public within the following hours:
Monday through Sunday - 6:00 a.m. to 12:00 midnight.
(8) Washrooms:
The building =s common washrooms are to be used by the tenant and its staff only. The tenant shall be responsible to secure the access and prevent the use by the patrons of the store. The Tenant shall, at its expense, install and provide all necessary washroom(s) for its patrons inside the leased premises, if required by law, and shall be responsible, at its sole expense, for the repairs and maintenance of the washroom(s) within the leased premises.
(9) No smoking will be permitted in the leased premises and/or the building.
(10) Equipment:
The Tenant shall, at its sole expense, be responsible for the provision, installation, maintenance, and servicing of all fixtures and equipment required for its business. The Tenant acknowledges and agrees that the existing fixtures and equipment currently located with the Leased Premises do not belong to the City and may be removed at any time. If the Tenant requires the use of similar equipment, it must obtain same at its sole expense. The landlord does not warrant that the Equipment is in good working order or that it is fit for the purpose intended. The Tenant shall, at its sole expense and risk satisfy itself as to the condition(s) of all existing Equipment and be responsible for the maintenance of such Equipment, and shall indemnify the Landlord and save it harmless from any and all suits, claims, demands, actions, damages, liability, cost suffered by the Tenant or the Landlord as a result of the Tenant =s action(s) or omission(s) in connection to the use and maintenance of the Equipment or the Equipment=s presence at the leased premises.
(11) The Tenant shall accept the leased premises in an Aas is@ condition and the Tenant must satisfy itself, at its own expense, that the Tenant=s intended use complies with the existing Zoning By-Law(s), Building Code(s), Fire Code(s), and all other applicable rules and regulations. The Tenant is to be responsible, at its sole expense, for any and all improvements required, subject to clauses 12 and 23 herein.
(12) Tenant =s Improvements/Maintenance:
(i) The Tenant, as of the Commencement Date, may, at its sole expense, repair, improve, or renovate the property to suit its intended use subject to the written approval of the Commissioner of Corporate Services (hereinafter called Athe Commissioner@);
The Tenant shall not install any signage or perform any repair, improvement, renovation, addition, decoration or re-decoration or other work without first submitting detailed plans and specifications to the Commissioner for written approval;
The Tenant warrants and will ensure that all improvements, building systems, equipment and all materials used shall conform to all building codes, material codes, rules, regulations, standard laws and by-laws whether Federal, Provincial or Municipal, relating to design, construction, safety;
In the event that any of the Tenant =s work requires boring hole(s) on the ground for plumbing or piping purposes and/or any works in connection with the heating/air conditioning system(s), such work(s) shall be co-ordinated with Landlord=s Facilities Management and at the Landlord=s sole discretion, such work(s) shall be done by Landlord=s contractor(s) at the Tenant=s expense;
The Tenant agrees to install, at its sole expense, any ventilation/exhaust system(s) deemed necessary by the Commissioner, at its sole discretion acting reasonably; and
The Tenant shall not commence any work prior to the execution of the Lease;
(ii) Upon expiry or early termination of the Lease, all leasehold improvements shall become the property of the Landlord. At the sole discretion of the Landlord, the Tenant may be required, at its expense, to remove some or all leasehold improvements and/or restore the leased premises to the condition as of the Commencement Date with all damages repaired all to the satisfaction of the Commissioner;
(iii) Upon expiry or early termination of the Lease, the Tenant agrees to waive any claim for compensation and/or reimbursement for any of its improvement or maintenance costs; and
(iv) The Tenant shall at all times, at its own expense, keep the leased premises, its contents and all leasehold improvements in a neat and tidy condition, painted and decorated, and in good and substantial repair subject to normal wear and tear. The Tenant shall make all needed repair and replacements and perform all necessary painting, decorating, re-decorating , repairs and replacement with due diligence and dispatch.
(13) Janitorial Services:
The Tenant shall, at its sole expense, provide all janitorial and cleaning services to the leased premises and remove any excess debris in the common areas, as deemed necessary by the Commissioner, caused by its patrons or staff.
(14) No storage or use of hazardous or environmentally sensitive materials will be permitted on the leased premises.
(15) The Tenant shall protect all public works = services and/or utility easements that may encumber the property, and shall be liable for any damage to such by its action(s) or omission(s).
(16) The Tenant shall ensure that nothing is done or kept at or on the leased premises which is or may be a nuisance, or which causes disturbance, damage to or interference with normal usage of any adjoining property.
(17) The Tenant shall not install any equipment or carry on any operation at the leased premises in such way as to increase the insurance risk.
(18) The Tenant shall obtain Liability Insurance of not less than $3,000,000.00 in amount, with the City of Toronto shown as an additional insured and with Cross-Liability and Waiver of Subrogation clauses. Certificate of such Insurance shall be provided to the Landlord, prior to execution of the Lease.
(19) During the term of the Lease and any renewal thereof, the Tenant shall be responsible, at its sole expense, for the upkeep and maintenance of its portion of the walkways and areaways including clearing of obstructions, snow/ice clearing and keeping areaways closed and properly guarded.
(20) During the term of the Lease or any renewal thereof, the Tenant, at its sole expense, shall be responsible for compliance with all current Municipal, Provincial and Federal laws, by- laws, rules and regulations and shall obtain all necessary permits and licences that may be required for the use and renovation of the leased premises and shall save the Landlord harmless from any liability or cost suffered by the Tenant or the Landlord as a result of the Tenant =s failure to so comply. At the request of the Landlord, the Tenant shall be required to submit proof of such compliance.
(21) (i) The Tenant shall, at all times, indemnify and save harmless the Landlord from and against any and all manner of claims, demands, losses, costs, charges, actions and other proceedings whatsoever (including those under or in connection with the Workers = Compensation Act or any successor legislation) made or brought against, suffered by or imposed on the Landlord or its property in respect of any loss, damage or injury (including fatal injury) to any person or property (including, without restriction, employees, agents and property of the Landlord or of the Tenant) directly or indirectly arising out of, resulting from or sustained as a result of the Tenant=s occupation or use of the leased premises or any operation in connection with the leased premises or any fixtures or chattels thereon; and
(ii) The Tenant shall, at all times, indemnify and save harmless the Landlord from and against any and all claims, demands, losses, costs, charges, actions and other proceedings whatsoever under the Construction Lien Act, or any successor legislation, in connection with any work done for the Tenant at or on the leased premises and shall promptly see to the removal, from the registered title to the leased premises, of every claim for lien and certificate of action having to do with such work.
(22) During the term of the Lease, the Tenant shall keep the leased premises in a neat and tidy condition; and at the termination of the Lease or any renewal or extension thereof, the Tenant shall, at its sole expense, remove such fixture(s), equipment and debris as the Landlord may require and repair all damage caused by its occupation and use of the leased premises, reasonable wear and tear excepted.
(23) In the event that the Tenant is going to renovate the leased premises, at the sole discretion of the Commissioner, the Tenant shall be required, at its sole expense, to provide the following:
(a) An estimate of the total cost of the proposed works;
(b) A revolving letter of credit as may be required from time to time in an amount or amounts sufficient to secure lienable contracts entered into from time to time for the supply of services and materials to the property, in a form and content satisfactory to the Commissioner and/or the City of Toronto Solicitor. It is understood that the revolving letter of credit will be designed to provide the security as aforesaid throughout such phases of construction and/or renovation as may be reasonably agreed between the Commissioner and the Tenant, provided, however, that subsequent phases of the construction and/or renovation shall not commence until the Commissioner is satisfied that the previous phase has been satisfactorily completed and all lienable contracts have been paid in full. In any event, an amount equal to 10% of the initial amount of the letter of credit for each respective phase shall be held back for not less than 45 days following the completion of each construction and/or renovation phase. The Landlord then shall examine title of the property and upon satisfying itself of no registered lien(s) relative to the construction and/or renovation shall release the held back funds forthwith;
(c) Evidence of insurance coverage in an amount to be determined by the Finance Department, acting reasonably and in form and content satisfactory to the City of Toronto Solicitor; and
(d) Proof of performance, material and labour payment bond from its contractor(s).
(24) During the renovation period, the Tenant shall indemnify the Landlord from and against any and all manner of claims, demands, charges and other proceedings whatsoever brought against directly or indirectly or imposed on the Landlord or its property in respect of any loss, damage or injury (including fatal injury) to any person or property in connection with the renovation of the leased premises in a form satisfactory to the Commissioner and/or the City of Toronto Solicitor.
(25) The Tenant shall not enter into any contracts lienable against leased premises or the Landlord =s property for the supply of services and/or materials to the property without the consent of the Commissioner.
(26) The Tenant shall not sublet or assign without written consent from the Landlord and such consent shall not be unreasonably withheld.
(27) In the event the Lease is not executed by the Tenant within 6 months from the date of approvals by City Council of this agreement, at the Landlord =s sole discretion, this agreement may become null and void.
(28) Upon the earlier of the execution of the Lease or the Commencement of the Lease, the Tenant shall pay to the Landlord the first month =s rent and a deposit of an amount equal to three (3) months= rent. Such deposit may be paid by certified cheque or Letter of Credit from a bank in a form satisfactory to the City of Toronto Solicitor, and it shall bear no interest. The deposit is to be applied to costs incurred by the Landlord, in the event of the Tenant=s default, including but not limited to legal and administrative costs to collect rent in arrears, clean-up, repair and remediation of the leased property.
(29) The Tenant, if so required by the Commissioner, shall, at its sole expense, provide satisfactory proof of financial ability to operate a business on the leased premises and/or personally guarantee the covenants of the Lease.
(30 All documentation shall be in the Landlord =s standard form and, notwithstanding any terms and conditions contained or not contained in this proposal, shall be in a form and content satisfactory to the City of Toronto Solicitor.
(31) The City of Toronto will not pay any real estate commissions associated with this transaction.
Conclusions:
In my opinion, these terms and conditions are fair and reasonable.
Contact name and Telephone Number:
Mr. Tony Pittiglio (392-8155)
Manager of Property Services
Commissioner of Corporate Services
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