Acquisition of Subsurface Fee Interest for the
Southwest Wye Tunnel and a Temporary Work Site
Lease, Sheppard Avenue Subway-Yonge Station
Owner: OMERS Realty Corporation and Canadian Pacific Properties
Incorporated and Leased to 4800 Yonge Street Limited
The Corporate Services Committee recommends the adoption of the following report (January 9, 1998) from the Commissioner of Corporate Services:
To authorize the execution of a Section 30 Agreement pursuant to the Expropriations Act securing the property requirements for the Sheppard Subway project.
Funding Source, Financial Implications and Impact Statement:
Financing has previously been approved by Council and is available in Capital Account No. TC-392.
It is recommended that:
(1) authority be granted to enter into an agreement with OMERS Realty Corporation, Canadian Pacific Properties and 4800 Yonge Street Ltd., pursuant to Section 30 of the Expropriations Act on terms and conditions detailed herein; and
(2) the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.
By approval of Clause No. 2 of Report No. 9 of The Management Committee (as amended) on March 8, 1994, and subject to a further report regarding funding, Metropolitan Council approved the construction of the Sheppard Subway to Don Mills Road. By the approval of Clause No. 2 of Report No. 14 of The Management Committee (as amended) on April 20, 1994, Metropolitan Council authorized a debenture funding to commence the project. Finally, Metropolitan Council by its adoption of Clause No. 2 of Report No. 21 of The Financial Priorities Committee on September 25 and 26, 1996 (as amended) approved the completion of the Sheppard Subway project.
Comments and/or Discussion and/or Justification:
As part of the Sheppard Subway, Yonge Station construction, the TTC requires a subsurface fee interest for the southwest Wye which will link the Yonge Line to the Sheppard Line. The TTC also requires the property as a work site from January 1, 1998, to June 30, 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 percent and Canadian Pacific Properties Inc., as to an undivided 25 percent interest.
The previous owner, 4800 Yonge Street Ltd., had gratuitously conveyed the widening of Sheppard Avenue as a condition of development and the transfer of the subsurface fee interest will be at no cost to the City.
A lease agreement has been negotiated with a term commencing January 1, 1998, and terminating June 30, 2001, with the City having the right to extend the term for two further six month periods.
The City has the right upon sixty days= notice to terminate the lease prior to the end of the term. The rent for the initial term is the sum of $630,000.00, plus GST, realty taxes and any operating costs associated with the site for the term of the lease.
The rent for the extension periods is to be $50,000.00 per month.
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 land were expropriated. The agreement also provides for the payment of the owners= reasonable legal, appraisal and other costs related to the transaction.
The owners have also agreed to pay an entrance connection fee of $150,000.00 to the TTC in advance of the construction of their proposed building. The fee was determined by TTC staff and will be finalized by the TTC in a covenant agreement. The agreement also contains a condition that during the term of the lease, the City will not release or finalize arrangements for the development of the City-owned lands located at the northwest corner of Yonge and Sheppard. It was a concern of the owners that the City could benefit from the lease of the 4800 Yonge Street property to gain a competitive advantage in marketing the City-owned lands.
Acceptance of the Section 30 Agreement by the City of Toronto will ensure possession of the property interests required for the Sheppard Subway construction project in a timely manner. The amounts recommended herein are considered fair and reasonable.
Contact Name and Telephone Number:
Mr. Doug Warning, Acting Director of Real Estate, Tel: 392-8165.