February 23, 1998
To: Corporate Services Committee
From: Commissioner of Corporate Services
Subject: Approval of 1998 Operating Budget for Property at
705 Progress Avenue, Scarborough
(Ward 15 Scarborough City Centre)
Purpose:
To approve the 1998 operating budget of the multi-tenant industrial complex at 705 Progress Avenue owned jointly by the City and the Board of Education.
Funding:
Not applicable.
The net income derived from the operation of this project is deposited into Account No. 58130 Non-Departmental (705 Progress Avenue Project).
Recommendations:
It is recommended that Council approve the attached operating budget for 705 Progress Avenue subject to approval by the Toronto School Board, Scarborough District.
Background:
In response to changing development trends in the City Centre area of Scarborough in the early 1990's the then City and Board of Education purchased the property at 705 Progress Avenue for a future park and school, each acquiring a 50% interest.
705 Progress consists of 151,000 square feet of leasable industrial space on a site of approximately 4.86 ha. (12 acres). The six buildings are generally divided into units of 1000 sq.ft. or multiples thereof. Approximately eleven thousand square feet of office space is concentrated at the front of the most easterly building.
The day-to-day operation and management of the property was contracted to Sun Life of Canada under the direction of the City
s Director of Real Estate. The management contract with Sun Life expires on December 31, 1998. A condition of the management contract requires Sun Life to prepare an annual operating budget which is presented for approval.
Comments:
At the time of writing, about 36,000 sq.ft. are vacant. Twelve leases come due for renewal during 1998. Lease rates range from $3.50 to $3.75 per annum per square foot for the industrial space and $4.00 to $5.00 for the office, on a triple net basis Operating costs for 1998 are estimated at $4.89 per square foot for the industrial space and $7.69 for the office space.
Conclusions:
Approval of this budget will permit the property manager to continue with the operation and ongoing maintenance of this project.
The projected net revenue for 1998 is 1.8 million dollars half of which will accrue to the Board of Education.
Contact Name:
R. Mayr, AACI, Telephone (416) 396-4930, Fax (416) 396-424, mayr@city.scarborough.on.ca
(cs98028.wpd)
Margaret Rodrigues
Commissioner, Corporate Services
