180 Duncan Mill Road - Declaration as Surplus

(North York Centre South - Ward 9)

The Corporate Services Committee recommends the adoption of the following report (March 16, 1998) from the Commissioner of Corporate Services:

Purpose:

To secure City Council approval to have the City's condominium interest in approximately 95 percent of 180 Duncan Mill Road declared surplus to the City's requirement and authorize the sale of this interest on the open market.

Financial Implications:

No financial implications at this stage of disposal, but, if sold, revenue will be generated for the City.

Recommendations:

It is recommended that:

(1) City Council, by by-law, declare as surplus the 95 percent condominium interest the City has in the real property known municipally as 180 Duncan Mill Road;

(2) the Commissioner of Corporate Services be directed, in accordance with City of North York Procedural By-law No. 32512, to give notice to the public of the proposed disposition of the lands declared surplus;

(3) the Commissioner of Corporate Services be authorized to market the City's interest in 180 Duncan Mill Road, through a real estate broker for a listing price to be determined in consultation with the listing broker; and

(4) the appropriate Civic officials be authorized to take the necessary action to give effect to the foregoing recommendations, including if appropriate introducing the necessary bill in Council.

Background:

In February, 1996, a 95 percent condominium interest in 180 Duncan Mill Road was offered for sale by public tender pursuant to the Municipal Tax Sales Act. The reserve bid, comprised of tax arrears, interest and penalty was $3,745,000.00. No bids were received and the ownership of the 95 percent condominium interest in 180 Duncan Mill Road, was vested to the City of North York on March 4, 1996, registered as Instrument No. D490872.

The entire property is legally described as, Lots 88 to 90, Registered Plan 7607. The 95 percent interest is described as being all units and common elements comprising the property included in Metropolitan Toronto Condominium Plan (MTCP) 988, being the common elements and General Index and property parcel registered for MTCP 988 save and except Units 10-17, Level 6 and Units 31, 32 and 33, Level A, MTCP 988 in the City of North York in the Municipality of Metropolitan Toronto. The other 5 percent condominium interest in the property is owned by The Ontario Association for Community Living and is described as YCP 988, Level 6, Units 10-17 and Units 31, 32 and 33, Level A.

The site area of the entire property is 2.339 acres with a frontage of 340.16 feet on the north side of Duncan Mill Road by irregular depth. It is zoned M2 (Industrial Inside Storage Zone) and is designated as O-1 Office Industrial in the Official Plan.

The property is improved with a 7-storey, 109 unit, office building, comprising a gross floor area of approximately 130,536 square feet. It is approximately 23 years old and was converted to condominium offices in 1991. There is an 18,256 square foot, 2-storey annex which is linked to the main building via the main lobby. There are two multi-level parking garages underneath the 7-storey building containing 153 spaces. To the east there is surface and underground parking consisting of 210 spaces. The previous assessment was $1,344,140.00 for the 7-storey portion and $77,360.00 for the annex portion.

The subject property has been held under interim management since acquired by the City. The buildings are vacant and deteriorating and constantly being repaired because of vandalism. Testing of the sprinkler system was delayed because of sub-level flooding which was pumped out by the North York Public Works Department. Currently, the various outstanding work orders are being attended to as requested by the Fire Department.

Comments:

The availability of this property for municipal purposes was circulated to the Interim Functional Leads for the New City of Toronto and no interest was expressed in retaining the property for municipal purposes. Accordingly, the City's 95 percent condominium interest in this property should be declared surplus and sold on the open market.

The provisions of the Planning and Municipal Statute Law Amendment Act, 1994 (Bill 163) respecting the sale of real property, by the City, its Agencies, Boards and Commissions, took effect January 1, 1995. In order to comply with this legislation, City Council:

(i) must declare the property to be surplus by by-law or resolution passed at a meeting open to the public;

(ii) notice to the public of the proposed sale; and

(iii) must obtain at least one appraisal of the market value of the property, unless exempted by regulations passed under the legislation.

In preparation for the marketing of this property a feasibility study was completed in November 1997, by Fish Marks which covers a number of items. The main points of the report are as follows:

(1) Immediately list the property for sale.

(2) If the property is not sold within a short time frame, i.e., one to two months from date of listing, arrange to have the buildings demolished. Preliminary demolition cost estimates range between $400,000.00 and $720,000.00.

(3) Once demolished, list the vacant land for sale.

(4) It is also recommended that a Phase I - Environmental Audit be conducted prior to advertising.

Also in preparation for the sale of the City's 95 percent condominium interest in this property discussions have been conducted with The Ontario Association for Community Living. The Association has tentatively agreed that its 5 percent condominium interest in this property could be marketed at the same time as the City's interest and the Association is prepared to accept 5 percent of the net sale proceeds for its interest. We are currently awaiting the final approval of the Association's Board of Directors to this joint marketing initiative. Given the nature of this property it is prudent to market both interests simultaneously.

Conclusion:

The City's 95 percent condominium interest in the property at 180 Duncan Mill Road should be declared surplus and sold as soon as possible, using the services of a broker to help expedite the sale.

Contact Name:

Stan Babiarz, Telephone (416)395-6849, Fax (416)395-6703, (cs98022.wpd)

(A copy of the location map attached to the foregoing report is on file in the office of the City Clerk.)