September 22, 1998

To:Corporate Services Committee

From:Commissioner of Corporate Services

Subject:Sale of the south portion of the public lane known as O'Keefe Lane and entering into encroachment agreements, rights-of-way and easements over the northerly portion of O'Keefe Lane and portions of Victoria and Gould Streets, east of Yonge Street between Dundas Street East and Gould Street - Yonge Dundas Redevelopment Project (Ward 24 - Downtown)

Purpose:

The purpose of this report is to:

(1)declare the south portion of O'Keefe Lane surplus to City's requirements and give notice to the public of the proposed disposition of the lands;

(2)authorize the sale of the south portion of O'Keefe Lane and the entering into of encroachment agreements over the north portion of O'Keefe Lane and portions of Victoria and Gould Streets to PenEquity Management Corporation in order to accommodate the land assembly for Parcel A of the Yonge Dundas Redevelopment Project; and

(3)authorize the granting of rights-of-ways as required to protect existing access rights of property owners affected by the public highway closings and the granting of easements to utility companies to protect existing utilities .

Financial Implications:

The City will realize revenues as established by Council's previous approval at its meeting of July 8, 9 and 10, 1998 of Clause 26 of Report No. 10 of the Strategic Policies and Priorities Committee relative to Parcel A redevelopment.

Recommendations:

Subject to City Council approving the stopping-up and closing of portions of the public lane O'Keefe Lane shown as Parts 1, 2, and 3 on Plan SYE2852 and the closing of portions of Victoria and Gould Streets shown in heavy outline on Plan SYE2892, it is recommended that:

(1)the portion of the public lane known as O'Keefe Lane shown as Parts 2, and 3 on the attached Plan SYE2852 be declared as surplus;

(2)the Executive Director, Facilities and Real Estate Division, give notice to the public of the proposed disposition of the lands declared surplus;

(3)the sale of the south portion of O'Keefe Lane shown as Parts 2 and 3 on Plan SYE2852 and the entering into of encroachment agreements over the north portion of O'Keefe Lane shown as Part 1 on Plan SYE2852 and portions of Victoria and Gould Streets shown in heavy outline on Plan SYE2892 to PenEquity Management Corporation, or to a company it may direct, to be under terms and conditions as set out in this report be approved;

(4)the sale price for the south portion of O'Keefe Lane shown as Parts 2 and 3 on Plan SYE2852, and the fee for the granting of encroachment agreements over the northerly portion of O'Keefe Lane shown as Part 1 on Plan SYE2852 and the portions of Victoria and Gould Streets shown in heavy outline on the attached plan SYE2852 pursuant to the financial terms established in Clause 26 in Report No. 10 of the Strategic Policies and Priorities Committee, approved as amended by City Council at its meeting of July 8, 9 and 10, 1998 be set;

(5)the portions of O'Keefe Lane shown as Part 1 on the attached Plan SYE2852 and the portions of Victoria and Gould Streets shown in heavy outline on the attached Plan SYE2852 be placed under the jurisdiction of the Commissioner of Corporate Services;

(6)the granting of a right-of-way to Penex Metropolis Ltd. over those lands shown as Part 1 on Plan SYE2852 for the purpose of servicing the "Parcel A" development be authorized;

(7)the granting of rights of ways over those portions of O'Keefe Lane shown as Parts 1 and 2 on Plan SYE2852 and the vehicle turn around area shown approximately as Part 4 on Plan SYE2852 to the owners of properties known municipally as 329, 331 and 335 Yonge Street and 17 Gould Street and any other rights-of-ways as may be required to property owners affected by the closings be authorized;

(8)the granting of appropriate easements to each of Bell Canada Toronto Hydro, Rogers Cable and any other utility company for the continued use and maintenance of their respective utilities over the portions of Victoria and Gould Streets to be closed be authorized;

(9)a public hearing pursuant to the Municipal Act, prior to selling highway lands, be held by the Corporate Services Committee; and

(10)the appropriate City Officials be authorized to take the necessary action to give effect to the foregoing recommendations.

Background:

City Council, at its meeting of July 8, 9 and 10, 1998, adopted, as amended, Clause 26 in Report No. 10 of the Strategic Policies and Priorities Committee, and authorized the Yonge Dundas Redevelopment Project to proceed. Parcel A of the Yonge Dundas Redevelopment Project is to be developed by PenEquity Management Corporation on behalf of Penex Metropolis Ltd. ("Metropolis"). The redevelopment of Parcel A requires the stopping up and closing of the public lane known as O'Keefe Lane between Dundas Street East and Gould Street and the stopping up and closing of portions of Victoria and Gould Streets.

Comments:

The General Manager, Transportation Services Division, Works and Emergency Services is reporting directly to Toronto Community Council for its October 14, 1998 meeting recommending the stopping-up and closing of the public lane known as O'Keefe Lane shown as Parts 1, 2, and 3 on Plan SYE2852 and portions of public highways abutting the Ryerson parking garage on the south side of Gould Street and the west side of Victoria Street shown in heavy outline on Plan SYE2852 in order to accommodate the proposed Yonge Dundas Redevelopment Project. Recommendations of the Toronto Community Council are to be tabled before City Council at its meeting to be held on October 28, 1998.

The recommendations of the General Manager, Transportation Services Division, and the recommendations as set out in this report would ensure that this highway closing and conveyancing will fulfill the statutory requirements and accordingly will conform with the process set out in By-law No. 551-1998. Accordingly, subject to the approval of the closing report by City Council, it would be appropriate to declare the southerly portion of O'Keefe Lane shown as Parts 2 and 3 on Plan SYE2852 surplus to municipal requirements.

The City Solicitor advises that a new procedure to deal with the closure and sale/lease of highway lands is being developed. As the new procedure, including a formal delegation by Council to one of the Committees to hold the requisite public hearing, has not yet been established, it is recommended that the Corporate Services Committee hold the public hearing in this matter.

A) Sale of O'Keefe Lane:

The agreement between the City and Metropolis for the redevelopment of Parcel A includes lands forming part of the existing public lane known as O'Keefe Lane. It is recommended that the southerly portion of O'Keefe Lane shown as Parts 2 and 3 on the attached Plan SYE2852 be conveyed to Metropolis on the following terms and conditions:

Metropolis shall:

(1)pay the price for the fee in the land comprising O'Keefe Lane shown as Parts 2 and 3 on the attached Plan SYE2852, as previously set by City Council;

(2)pay the cost of removing one Toronto Hydro lane light estimated to be $325.00;

(3)pay the cost of removing and abandoning the Bell Canada cable, estimated to be $1,792.25;

(4)pay the cost of replacing the existing Rogers Cable, from 311R Yonge Street to 333R Yonge Street, estimated to be $7,000.00;

(5)pay the cost of reconstructing the concrete curb and sidewalk at the south end of O'Keefe Lane, estimated to be $3,000.00;

(6)pay all out-of-pocket expense that will be incurred by the City as result of the closing and conveyancing, estimated to be $3,500.00, and agree that any such money expended will be refunded in the event that the transaction is not completed through no fault of Metropolis;

(7)either pay the cost of relocating the City owned sewer, such cost to be determined by the Commissioner of Works and Emergency Services, or alternatively accept conveyance of the fee in the land comprising the southerly portion of O'Keefe Lane shown as Parts 2 and 3 on the attached Plan SYE2852, subject to an easement in favour of the City acceptable to the Commissioner of Works and Emergency Services for the purposes of access, operation, use, inspection, repair, maintenance, reconstruction or alteration of the municipal services, subject to the following terms and conditions:

i.The City shall have the right at all times without notice to enter the easement lands for the purpose of constructing, inspecting, maintaining, servicing, altering, repairing and reconstructing a sewer, maintenance hole or any other municipal service upon, under, through, over and along the lands;

ii.Except as set out in the approved site plans, no work shall be carried out and no building or structure, temporary or permanent, shall be erected or any other encumbrance placed on or over the easement without the approval of the Commissioner of Works and Emergency Services, such approval not to be unreasonably withheld;

iii. The owner shall have no claim against the City for any loss of occupancy of the lands during the period when the City is exercising its easement rights; and

iv. The City shall not be responsible for damage to private property caused by the existence of any services and/or the easement, except damage caused by the City's negligence.

(8)accept conveyance of the fee in the lands comprising the southerly portion of O'Keefe Lane shown as Part 2 on Plan SYE 2852 and the service vehicle loading and turnaround areas to be determined and shown more or less as Part 4 on Plan SYE 2852, subject to rights-of-ways for vehicular access and turnaround purposes in favour of the City and properties municipally known in the year 1998 as 329, 331 and 335 Yonge Street and 17 Gould Street, Toronto; and

(9)agree to such other ancillary terms and conditions deemed necessary by the City Solicitor to protect the City's interests.

B) Encroachments:

The redevelopment of Parcel A requires encroachments to be constructed over portions of the public highways to be closed. It is recommended that Metropolis be permitted to construct and maintain certain approved encroachments upon the northerly portion of O'Keefe Lane shown as Part 1 on the attached Plan SYE2852 and portions of Victoria and Gould Streets shown in heavy outline on the attached Plan SYE2852, on the following terms and conditions:

Metropolis shall:

(1)pay all out-of-pocket expense that will be incurred by the City as a result of the closing, estimated to be $3,500.00 and agree that any such money expended will be refunded in the event that the transaction is not completed through no fault of Metropolis;

(2)acknowledge that Bell Canada, Toronto Hydro and Rogers Cable have utilities within the lands along Victoria and Gould Streets and that the City will be granting each of these parties the appropriate easements easement for continued use and maintenance of their respective utilities;

(3)acknowledge that the City has an existing sewer within the lands comprising Part 1 Plan SYE2852, the northerly portion of O'Keefe Lane which the City will continue to use and maintain;

(4)maintain the encroachments in good and proper repair and a condition satisfactory to the Commissioner of Corporate Services and repair any damage caused to the City's lands by the construction or maintenance of the encroachments;

(5)maintain the lands, Part 1 on Plan SYE2852, comprising the northerly portion of O'Keefe Lane, over which the encroaching building will overhang, save and except for the lands encumbered by the building support columns, in a state of good repair clear of ice and snow and other encumbrances and ensure that such lands are open and accessible to the City and owners of the properties municipally known in the year 1998 as 329, 331, and 335 Yonge Street at all times after completion of construction of the encroachments;

(6)provide and maintain pedestrian walkway facilities within the lands along Victoria and Gould Streets over which the encroaching building will overhang, save and except lands encumbered by the building support columns, at an elevation compatible with the adjacent public sidewalk and paved with materials suitable for pedestrian use, to the satisfaction of the Commissioner of Works and Emergency Services;

(7)maintain the pedestrian walkway facilities within the lands along Victoria and Gould Streets in a state of good repair, clear of ice and snow and other encumbrances and ensure the walkway is open and accessible to the public at all times after completion of construction of the project;

(8)agree that any encroachments erected over the City's lands, except building support columns, and removable canopies shall maintain a minimum 4.0 metre high vertical clearance for access, operation, use, inspection, repair, maintenance, reconstruction and alteration of municipal services and other utilities;

(9)obtain City Council approval for removal of 14 city-owned trees abutting the project, in accordance with the City's Tree By-law (Chapter 331 City of Toronto Municipal Code) prior to constructing the encroachments as per site plan approval dated September 1, 1998;

(10)pay compensation for the encroachments upon and over the City's lands at the amount previously set by City Council;

(11)in the event that the City at any time enacts a by-law levying an annual tax upon encroachments over City lands, pay all taxes, rates, duties and assessments, if any, applicable to the lands;

(12)indemnify the City against all claims, damages, etc. which may be brought against or made upon the City as a result of the operation and maintenance of the encroachments or the exercise by Metropolis of the rights granted to it and maintain a comprehensive liability insurance policy in an amount to be determined by the Chief Financial Officer and Treasurer with the City named as an additional insured. The insurance policies shall be approved by the Chief Financial Officer & Treasurer;

(13)agree that the term of the encroachment agreement will be the lesser of 99 years, plus 20 five year renewals or the life of the structure to be constructed by Metropolis provided that the structure shall be deemed to include any replacement structure that is constructed as a result of damage from fire, explosives or other similar causes and provided such replacement structure is substantially the same as the original structure and is utilized for similar purposes;

(14)agree the agreement is to have an automatic termination clause, at any time during the period of the agreement, should the structure to be constructed on the City's lands be removed;

(15)agree that the encroachment agreement will contain a prohibition on assignment unless such assignment is to be done in conjunction with Metropolis's rights under the master agreement entered into between the City, Penex Metropolis Ltd. and PenEquity Management Corporation as amended July 10, 1998.

(16)agree that it would not be entitled to compensation for any building erected on or any improvement to the City's lands should the proposed agreement be proceeded with and eventually terminated arising from the termination of the City/PenEquity/Ryerson agreements entered into by the parties respecting development of this Parcel A, and if so terminated, Metropolis would remove any building or improvement at its own expense;

(17)agree to such other ancillary terms and conditions deemed necessary by the City Solicitor to protect the City's interests.

C. Rights-of-ways and Easements:

The closing of O'Keefe Lane and portions of Victoria and Gould Streets would affect current access rights enjoyed by properties owners. In order to provide the owners along Yonge Street south of Gould Street with continued access to the rear of their properties, it would be necessary to grant rights-of-ways over a portion of Gould Street to be closed, the northerly portion of O'Keefe Lane shown as Parts 1 and 2 on Plan SYE2852 and a turn around area on Parcel A lands shown as Part4 on Plan SYE2852. It will be necessary to grant a right-of-way to Metropolis over those lands shown as Part 1 on Plan SYE2852 for the purpose of servicing the Parcel A development. Other property owners directly affected by the closings would also be granted the necessary rights-of-ways for access purposes.

Utilities currently located in the public highways to be closed would either have to be relocated or easements would have to be provided to protect them. Bell Canada, Toronto Hydro, Rogers Cable and any other utility company currently having utilities in the portions of Victoria and Gould Streets to be closed are to be granted easements to protect their respective interests.

The City must comply with the procedures governing sale of real property pursuant to Section 193 of the Municipal Act relating to the sale of property, before selling real property, Council must declare the property surplus by by-law or resolution passed at a meeting open to the public; give notice to the public of the proposed sale; and obtain at least one appraisal of the market value of the property, unless exempted by regulation passed under the legislation. Where lands form part of a public lane or highway, it must first be stopped up and closed before it could be disposed of by the City.

Ontario Regulation 815/94, which sets out the classes of property that a municipality can sell without obtaining an appraisal, includes a class of land that are highways, roads and road allowances. Accordingly, no appraisal is required for the conveyances set out in this report.

Conclusion:

Subject to City Council approving the stopping up and closing of these public highways or portions thereof, it is appropriate to declare the southerly portion of O'Keefe Lane surplus to municipal requirements. Once the lands have been declared surplus and the City has completed its assembly of Parcel A lands within the Yonge Dundas Redevelopment Project, the City would be in a position to convey the southerly closed portion of O'Keefe Lane to Metropolis and entering into encroachment agreements over the north portion of O'Keefe Lane and portions of the closed Victoria and Gould Streets to Metropolis for the redevelopment of Parcel A. The timing of the conveyancing would coincide with the closing of Parcel A.

The City would have to grant rights-of-way to the owners of properties affected by the closing in order to provide them with continued access to their properties. Easements would be granted to utility companies in order to protect their existing utilities within the portions of Victoria and Gould Streets to be closed.

Contact Name:

Doug Wong, Telephone: 392-1858, Fax: 392-1880, dwong@city.toronto.on.ca (cs98147.wpd)

Margaret Rodrigues

Commissioner, Corporate Services