June 22, 1999

To:Administration Committee

From:CAO & Acting Commissioner

Corporate Services

Subject:Proposed Land Exchange

South-West Corner of Eglinton Avenue West and Black Creek Drive

(Ward 27 - York Humber)

Purpose:

To authorize the exchange of portions of former public highways for privately held lands near the south-west corner of Eglinton Avenue West and Black Creek Drive.

Financial Implications:

The exchange of lands will be on an equal value basis with each party being responsible for its own legal and closing costs.

Recommendations:

It is recommended that:

(1)whereas the portions of Keelesdale Road and Photography Drive forming part of the proposed land exchange have been declared surplus to municipal requirements, staff proceed with the exchange of lands with Rutledge Development Corporation (the developer), or its permitted assigns, at the south-west quadrant of the intersection of Eglinton Avenue West and Black Creek Drive, based on the following terms and conditions, together with any others deemed appropriate by the City's solicitors to protect the City's interests:

a) the land exchange proceed for a nominal sum of $1.00;

b) the acquisition by the City of Areas 4, 5, 6 and 7 on Plan SYE2917 subject to an access easement for the developer;

c) the conveyance by the City of Areas 1, 2, and 3 on Plan SYE2917 subject to the reservation of necessary easements for municipal services and public utilities, and the grant of an access easement to the developer across parts of Area 8 on Plan SYE2917;

d) permission to enter and occupy the future transitway facility lands be granted to the developer during the construction phase of the project together with permission for the developer to proceed with any environmental testing and remediation work on lands owned or to be owned by the City, and for purposes of constructing the access road, provided the developer indemnifies and holds the City harmless from any losses, damages, claims or suits;

e) both parties to be responsible for their own closing and legal costs;

f) the developer to provide a survey of the lands being conveyed to and by the City;

g) the developer to be responsible for any required cleanup of the lands and the developer to provide the City with evidence from its environmental consultants satisfactory to the Executive Director of Facilities & Real Estate that the lands being conveyed to the City meet the Ministry of Environment and Energy guidelines for commercial/industrial use, and in the event the lands are not cleaned up prior to the land exchange, the developer shall enter into a financially secured agreement with the City to ensure the clean up of the lands;

h) a "release" of the 1992 Memorandum of Understanding between the City, Dumez Real Estate North America Inc. and the Ministry of Transportation of Ontario be executed.

(2)the C.A.O & Acting Commissioner Corporate Services or the Executive Director of Facilities & Real Estate be authorized to execute any necessary agreements, and/or amendments or extensions related thereto;

(3)the appropriate City officials be authorized and directed to take the necessary action to give effect thereto.

Background:

At its meeting on March 2, 3, and 4, 1999, City Council adopted Clause No. 13 contained in Report No. 2 of The Corporate Services Committee which recommended that:

"(1) Staff proceed in consultation with Ward Councillors, with negotiations involving the Ministry of Transportation of Ontario and Rutledge Development Corporation with a view to formalizing terms and conditions for the exchange of lands in the York City Centre area, and report back in due course;

(2) notice of intent to declare surplus be issued, and staff initiate the process to stop-up, close, and convey those portions of the public highways known as Keelesdale Road and Photography Drive, intended to be included in the proposed land exchange, in the south-west quadrant of Eglinton Avenue west and Black Creek Drive;

(3) as part of the process, the Rutledge Development Corporation together with appropriate staff and Ward councillors, be requested to consult with the York City Centre Citizens Committee, the Mount Dennis Ratepayers, the Mount Dennis BIA, the Eglinton and Keele BIA, Roseland Ratepayers and a representative of Brownville Avenue; and

(4) the appropriate City officials be authorized and directed to take the necessary action to give effect thereto."

In April of 1992, the former City of York (York) entered into a Memorandum of Understanding (MOU) with the Province of Ontario represented by the Ministry of Transportation of Ontario (MTO) and the Minister Responsible for Greater Toronto (both hereinafter referred to as the Province), and Dumez Real Estate North America Inc. (DRENA).

York's desire was to encourage the development of the lands at the intersection of Black Creek Drive and Eglinton Avenue West for the purposes of a city centre.

DRENA, the Province, and York as owners of lands in the south-west quadrant of Black Creek Drive and Eglinton Avenue West were desirous of participating in the development of such lands as the first phase of the York City Centre.

The purpose of the MOU was to set forth the land transactions necessary to facilitate the development of the first phase of the York City Centre and to ensure that such development proceeds as a mixed-use development and in a manner consistent with York's objectives of ensuring the creation of the York City Centre and implementing the provisions of Official Plan Amendment 98.

Pursuant to an Agreement of Purchase and Sale, Mr. H. Scott Rutledge, principal of Rutledge Development Corporation (RUDEVCO), now has control of the DRENA holdings that were subject to the MOU.

Whereas a number of conditions of the MOU were not satisfied, legal advice from City Legal staff dated September 21, 1998, stated the following:

"If DRENA has contracted for the sale of their holdings to a purchaser who is interested in a development in the south-west quadrant, it would be best if the purchaser had discussions with the City and the Province with a view to arriving at a renewed MOU or land exchange agreement."

It is noted that York Community Council held a statutory public meeting on June 22, 1999, and reports for the information of Council having:

"(i)held a statutory public meeting on June 22, 1999, in accordance with Section 34 of the Planning Act, and that appropriate notice of this meeting was given in accordance with the Planning Act and regulations thereunder;

(ii)referred the request of the Rutledge Development Corporation that any surplus from the exchange of lands with the City, be applied as a credit towards the 2% cash-in-lieu of parkland calculation and/or other municipal charges to ensure an equal value exchange, to the Administration Committee for consideration on July 13, 1999; and

(iii)requested the Director, Community Planning, West District, to consult with the Police at the Site Plan process stage, with a view to the Police undertaking a safety audit."

Comments:

(1)Site Ownership

The York City Centre - Phase One site is located on a 4.74 hectare (11.7 acre) triangular parcel of the land bounded to the east by Black Creek Drive, to the north by Eglinton Avenue West, and to the south-west by the CNR/CPR railway corridor. A location map is attached.

GM Gest, a Lyonnaise des Eaux-Dumez subsidiary, owned the central part of the triangle since the early 1950's. The remaining lands are owned by the Province of Ontario, Ministry of Transportation and the local roads by the City of York. Prior to GM Gest's ownership, the site was used by the municipality as a granular borrow source and subsequently as a landfill site.

Downtown York Development, a holding company owned through Dumez Immobilier and managed by DRENA, purchased the GM Gest lands in December 1989 in order to develop the York City Centre - Phase One.

In April 1992, DRENA executed a land exchange agreement (Memorandum of Understanding - MOU) with the Ministry of Transportation for Ontario and the City of York. This agreement provides for a reconfiguration of the land holdings to allow for the development of a gateway transit station, one million square feet of commercial premises, and 850 residential condominiums. The agreement also provides for the joint servicing of the site and removal of landfill by DRENA and the Ministry of Transportation.

(2)Landfill History

The Landfill History is paraphrased from the Environmental and Geotechnical Assessment by Bruce A. Brown Associates Limited dated April 1990.

"From the available information, it appears this site was originally used as a granular borrow source. There is no record of the duration of borrow activities, however, historic air photos dating from 1947 onward suggest that no significant volumes of landfill were placed prior to 1947. The Granular "C" sand was not completely exhausted, however, borrow limits may have been confined by the adjacent Canadian Pacific Railway line. Landfilling operations extended from 1949 to 1950 to late 1953, or early 1954. The photographs indicate landfilling by 1950 and certain completion of filling by 1954.

Conversations with Gest personnel also confirms that landfill activities were terminated by about 1954, at which time the fill was enclosed with a granular cover. Further discussions with Gest personnel indicate that Gest covered the site with an additional lift of granular fill and extended southward the use of the site as a contractor's yard. Some of the array of small buildings on the north part of the site pre-date the 1947 earliest available air photograph and the balance was constructed in 1948 and 1949. The most northern was demolished in 1966 for the Eglinton Avenue grade separations. The first evidence of occupation of more intensive land use in the contractor's yard was found on the 1956 aerial photographs which includes the largest of the Gest buildings. The site continued to be used by Gest who installed underground fuel tanks and constructed the buildings which have since been demolished."

(3)RUDEVCO Proposal

RUDEVCO are proposing to acquire certain lands from MTO and from the City in order to end up with a developable site. The various parcels, subject to the present fractured ownership, have limited development potential. The assembly proposed by RUDEVCO would result in a realignment of ownership intended to create development opportunities of a mixed-use nature. RUDEVCO would be responsible for any land clean-up required because of the former landfill use to the extent required to meet applicable guidelines.

The land exchange proposal submitted by RUDEVCO, as shown on the attached Plan SYE2917, provides that RUDEVCO would acquire Areas 5 and 6 on attached Appendix "A" from MTO, and together with Areas 4 and 7, deed those lands to the City in return for the lands within the boundaries of the former Keelesdale Road right-of-way shown as Area 1 and Areas 2 and 3 being part of the Photography Drive right-of-way.

It is also noted that RUDEVCO may be interested in acquiring a small parcel of City-owned land near the south-west corner of Black Creek drive and Photography Drive which abuts a parcel it is acquiring from MTO. As this land has limited utility and is a maintenance liability this interest of RUDEVCO will be pursued and reported in due course should RUDEVCO's interest be maintained.

The revised RUDEVCO development proposal now contains only two components; commercial/retail, and a future transportation facility. The commercial component will comprise a retail project consisting of a supermarket and a future one-storey commercial building generating a total area of 9,300 square metres (100,000 sq. ft.). A residential component that would have comprised approximately 150 units has now been deleted.

A possible future transportation facility will be located on the block intended to be under City ownership to be created by virtue of the proposed land exchange. As mentioned earlier, RUDEVCO would be responsible for any required environmental clean-up of the land included in the exchange to meet applicable MOEE guidelines for the intended use. A copy of the revised site plan is attached.

RUDEVCO has submitted an application to rezone the land. Future development of the lands will be subject to a site plan control application.

This report is not intended to comment on planning issues in any great detail. However, for purposes of information, the Official Plan calls for mixed-use development. The zoning for the property is regulated under Section 336 of Zoning By-law 1-83 of the former City of York. The Official Plan and Zoning By-law amendments being proposed, O.P. Sections 21.8J(1b(i)) and 21.8M(2) and Zoning By-law 1-83 Section 16(336), are of a site-specific nature pertaining to, among other things; reconfiguration of the Blocks, changes in phasing, changes in vehicular access, and so on.

According to the Planning Report dated June 3, 1999, the proposal will result in the following Blocks:

BuildingLot

Block Use Area Area

ARetail9,300 sq. m.3.0 ha (7.5 acres)

(100,000 sq.ft.)

BTransitway Facility0.9 ha (2.1 acres)

CSurplus MTO land0.166 ha (0.41 ac.)

The Blocks are shown on the attached plan. Block C located at the southwest corner of Photography Drive and Black Creek Drive is surplus to MTO.

RUDEVCO's revised concept was presented to members of the York Community Council, as well as to the local BIA and ratepayers at a public meeting held on June 22, 1999, at the York Civic Centre. There has been ample opportunity for public input into the land use issues related to the proposal. No objections to the proposal were received.

The requirements for the proposed transit facility were confirmed in consultation with staff of Urban Planning and Development Services and Works and Emergency Services, TTC, and GO Transit.

The public notice required to proceed with the stopping-up, closing, and sale of the roads, and notice of intent to sell, were published pursuant to Municipal Act requirements and no objections were received.

It is noted that, relative to York Community Council item (ii) set out in the background portion of this report, staff have maintained the position that the exchange of lands as set out in this report is on an equal value basis. RUDEVCO has now decided to withdraw its request that any surplus for the exchange of lands with the City, be applied as a credit towards the 2% cash-in-lieu of parkland calculation and/or other municipal charges.

Conclusion:

Extensive consultation was conducted with all interested parties and there is a consensus of support for the proposal.

The land exchange will allow for a rationalization of property holdings creating a viable retail development site and providing for a future transit facility while allowing for potential future intensification of development if market conditions permit.

Corporate Services staff should be authorized to proceed with the land exchange based on the terms and conditions outlined in this report together with any other terms and conditions deemed appropriate by the City's solicitors to protect the City's interests.

Contact Name:

Francois (Frank) G. Bedard, Manager, Realty Services, Etobicoke-York Districts

Telephone: (416) 392-1256; Fax No.: (416) 392-1880 (ac99107wpd)

CAO & Acting Commissioner

Corporate Services

Attachs.