April 14, 1998

  To:Corporate Services Committee

 From:President, Toronto Parking Authority

 Subject:Sale of 548 Front Street West and 10 Portland Street (Municipal Carpark 96)

Purpose:

 To sell the above-noted property while maintaining some public parking, and use the proceeds from the sale of the property to acquire an alternative site in order to better meet the parking demands of the King/Spadina area. The City will retain ownership of a portion of the site, on which the Purchaser must construct 35 public parking spaces to be operated by the Parking Authority.

Funding Sources, Financial Implications and Impact Statement:

 The net proceeds (excluding sales commission, legals, and environmental consultation) to the Toronto Parking Authority will range between $3.86 million to $4.1 million depending upon the amount of environmental remediation required. The proceeds will be used to purchase an additional property in order to meet the remaining parking shortfall in the area. In addition, the Toronto Parking Authority will own 35 parking spaces valued at approximately $420,000 ($12,000 per space).

Recommendations:

 It is recommended that:

1. Council approve an Agreement of Purchase and Sale dated March 13, 1998 and an associated Amending Agreement for the sale of 548 Front Street West and 10 Portland Street to Cityscape Niagara Corp. at a purchase price of $4,100,000 which will be subject to an adjustment for environmental remediation costs to a maximum of $240,000. These funds will be placed into an environmental reserve fund which can be used by the Purchaser to deal with environmental issues relating solely to Volatile Organic Compound (VOC) located in the ground water at the northwest portion of the site. Following remediation, any unused amount will be transferred to the Parking Authority. The agreement requires the Purchaser to construct a 35 space parking garage, the cost of which is included in the purchase price.

1. The Purchase and Sale Agreement be satisfactory in form to the City Solicitor.

1. The appropriate Civic Officials be authorized to take the necessary steps to implement the foregoing.

Council Reference/Background History:

 At its meeting of October 6 and 7, 1997, City Council gave consideration to Clause No. 83 of Report No. 23 of The Executive Committee, titled ASale of 548 Front Street West and 10 Portland Street, (ward 5)@. At that meeting, Council took the following action:

1. Authorized the City and the Parking Authority to enter into a Purchase and Sale Agreement for the sale of 548 Front Street West and 10 Portland Street at a purchase price not to be less than $4.6 million which includes cost adjustments for remediation, subject to ratification by the Parking Authority of Toronto Board of Commissioners.

1. Directed that the Purchase and Sale Agreement be satisfactory in form to the City Solicitor.

1. Authorized the appropriate Civic Officials to take the necessary steps to implement the foregoing.

1. Instructed that, should the Parking Authority of Toronto propose to incorporate surface parking at this location, they would be required to seek further approval from City Council at the time of application for site plan approval.

 At that time we informed City Council that the Purchase and Sale and Agreement with Lakeshore Toolworks Limited previously approved by Council at its meeting of July 14, 1997 (Clause 32 of Report No. 18 of the Executive Committee) was terminated because of the Purchaser=s inability to satisfy its conditions. We believed that the property was very marketable and we were seeking a new purchaser. We proposed that Council authorize the Parking Authority to sell the property when it found a purchaser, provided that any agreement entered into was for a price not less than $4.6 million. This was the amount that we felt that the City could obtain in the market that existed six months ago. However, since that time there has been an increase in the number of residential proposed developments and as a result land values have declined. We have received an appraisal report dated April 13, 1998 from The Morassutti Group, real estate appraisers, and they have determined that the appraised value of the land is $3.8 million without cost adjustments for remediation.

Comments and/or Discussion and/or Justification:

 Subsequent to City Council=s approval to continue to proceed with the sale of the property, the Toronto Parking Authority directed its agent, CB Real Estate Group Canada Inc. to re-list the property. A potential Purchaser has come forward and an agreement has been negotiated, subject to certain conditions, such as approval from the Parking Authority Board of Directors and City Council. The Parking Authority=s Board of Directors have approved the transaction.

Summarized below are the basic terms and conditions of the Purchase and Sale Agreement and the associated Amending Agreement with Cityscape Niagara Corp.

1. Purchase Price: The purchase price of $4,100,000 is payable as follows:

 (i)$150,000 by certified cheque payable to CB Commercial Real Estate Group Canada Inc. in trust together with the Offer;

 (ii)$250,000 by certified cheque payable to the agent in trust together with the execution of the amending agreement;

 (iii)$250,000 by certified cheque payable to the agent in trust on July 10, 1998;

 If we receive approval from City Council, the deposits noted above are non-refundable;

 (iv)The balance of the purchase price of $3,450,000 will be paid to the Parking Authority on closing of which $240,000 will be placed in an environmental reserve fund (see point 5. re: details).

1. The closing of this transaction will take place on August 28, 1998.

1. Parking Garage: Cityscape Niagara Corp. will construct 35 parking spaces at no cost to the Parking Authority and will deliver ownership to the TPA upon completion of the spaces. The parking spaces will be designed in accordance with TPA=s specifications including pedestrian and disabled access and signage as mutually agreed upon by TPA and Cityscape. The Toronto Parking Authority must be satisfied with the preliminary design of the garage within 30 business days following waiver or satisfaction of the Purchaser=s conditions.

1. Purchaser=s Conditions: In the Amending Agreement, the Purchaser is waiving all conditions related to the agreement.

 5.Environmental Reserve Fund: It has been determined by both parties that there is an environmental issue relating to Volatile Organic Compound (VOC) located in the ground water at the northwest portion of the property. In the event that the issues relating to the VOC contamination have not been resolved prior to closing, the sum of $240,000 will be deducted from the purchase price and placed in an environmental contingency fund on closing. This money will be available to the Purchaser to the extent that remediation of the VOC contamination is required. The Toronto Parking Authority will have the approval rights regarding the expenditure of these funds as they relate to the cleanup of the VOC contamination. If the environmental costs, once remediation has been completed, are below $240,000, the Parking Authority will receive all excess proceeds. In the event that the remediation costs are above $240,000, all financial risks and costs will be borne by the Purchaser. Furthermore, Cityscape will assume all financial risks and environmental liability for any other contaminated soil which is contained on the property. It is expected that remediation will be concurrent with the commencement of the project construction.