June 16, 1998
To:Corporate Services Committee
From:Commissioner of Corporate Services
Subject:4800 Yonge Street - Sheppard Subway Acquisition of Property - Supplementary Report
Owner: Omers Realty Corporation and Canadian Pacific Properties Inc.
Leased to: 4800 Yonge Street Limited (Ward 10 - North York Centre)
Purpose:
To advise Council of the status of an acquisition previously approved by Council at the southwest corner of Sheppard
Avenue East and Yonge Street as part of the property requirements for the construction of the Sheppard Subway.
Funding Source, Financial Implications and Impact Statement:
Financing has previously been approved by Council and is available in Capital Account No. TC-392.
Recommendations:
It is recommended that City Council confirm its decision to enter into an agreement with Omers Realty Corporation,
Canadian Pacific Properties Inc., and 4800 Yonge Street Ltd., including environmental indemnification of the owner, for
the property in its present condition.
Council Reference/Background/History:
Council, at its meeting held on February 4th, 1998, adopted Clause 3 of Report No. 1 of the Corporate Services Committee,
as amended, approving the acquisition of the above referenced property in connection with the Sheppard Subway project.
The purpose of this report is to provide clarification with respect to the requirement of the owners for environmental
indemnification which was not addressed in the report to the Corporate Services Committee on January 20th, 1998.
Comments and/or Discussion and/or Justification:
As part of the Sheppard Subway, Yonge Station construction, the TTC requires a subsurface fee interest through the
property known municipally as 4800 Yonge Street for the southwest WYE which will link the Yonge line to the Sheppard
line. The TTC also requires the property as a worksite from January 1st, 1998 to June 30th, 2001 which will also provide
for detours of Sheppard Avenue West and Yonge Street during the station's construction. The property is leased to 4800
Yonge Street Ltd. which is a holding company owned by Omers Realty Corporation as to an undivided 75% interest and
Canadian Pacific Properties Inc. as to the remaining undivided 25% interest. The agreement provides for a lease with a
term commencing January 1st, 1998 and terminating June 30th, 2001, with the City having the right to extend the term for
two further six-month periods. The owners have also agreed to transfer the subsurface fee interest required for the WYE
tunnel at no cost to the City.
The agreement is made pursuant to Section 30 of the Expropriations Act which allows the owner to apply for determination
of additional compensation as if the lands were expropriated.
The owners, in finalizing the agreement, have demanded that during the term of the lease the City assume any and all risks
related to the physical condition of the property and that the City is to accept the property in its present condition, and that
the City shall indemnify the owners in respect of the corresponding City and TTC activities during the term of the lease.
The TTC has undertaken environmental investigations of the site through Golder Associates and, although there have been
traces of petroleum hydrocarbons identified on the site, it is considered low level and a low risk. The environmental
indemnification clause is, therefore, not of concern to the TTC.
The alternative to entering into the Section 30 agreement would be to expropriate the lands and assume the same risk with
respect to any environmental contamination of the lands. Any increased costs in construction related to the removal of any
contaminated material would be considered by the OMB in making any award.
Conclusion:
Notwithstanding the requirement that the City take the property in its present state and be responsible for any
environmental contamination, whether pre-existing or not, and indemnify the owners in respect of its activities during the
term of the lease, the acceptance of the Section 30 Agreement by the City of Toronto will ensure the possession of the
property interests required for the Sheppard Subway construction project in a timely manner and provide a similar risk to
the City and the TTC as if the lands were expropriated.
Contact Name:
Mr. Robert K. Johnston, Project Manager (416) 392-8143 Fax No. (905) 501-0455 E-Mail Address: jdassoc@interlog.com
(Copy of Map attached to the foregoing report, is on file in the of fice of the City Clerk.)
