September 23, 1999

 To:Administration Committee

From:Acting Commissioner of Corporate Services

Subject:Sale of Surplus Vacant Lands on north side of Ellesmere Road, east of Kennedy Road

(Ward 15 - Scarborough City Centre)

Purpose:

To authorize the sale of the vacant parcel on the north side of Ellesmere Road east of Kennedy Road.

Financial Implications:

Estimated revenue of $715,494.00 less commission, closing costs and the usual adjustments on closing is anticipated.

Recommendations:

It is recommended that:

the Acting Commissioner of Corporate Services or the Executive Director of Facilities and Real Estate be authorized to accept the Offer to Purchase as submitted by Lambertus Dekkema Holdings Inc. in the amount of $801,000.00, subject to a price reduction, based on $275,826.44/acre, for the area of land affected by the former City of Scarborough Tree By-law (25150);

Council, pursuant to Clause No.14, Report No. 36 of the former Metropolitan Management Committee adopted on September 28, 1994, waive the minimum required deposit of 10 per cent of the purchase price;

authority be granted to direct a portion of the sale proceeds on closing to fund the outstanding balance of Costing Unit No. CP300J56258;

the City Solicitor be authorized and directed to take the appropriate action to complete this transaction, including adjusting the sale price, and be further authorized to amend the closing date to such earlier or later date as considered reasonable; and

the appropriate City Officials be authorized and directed to take the necessary action to give effect thereto.

Background:

By its adoption of Clause No. 7 of Report No. 1 of Corporate Administration Committee on January 7, 1997, the former Metropolitan Council declared the property surplus. Further, by its adoption of Clause No. 19 of Report No. 13 of the Corporate Services Committee on October 1 and 2, 1998, City Council released the surplus property from a list of properties considered for affordable housing and authorized its disposal subject to easement protection for utilities, by offering the property for sale at market value on the open market by direct sale or by use of the Multiple Listing Service of the Toronto Real Estate Board.

The subject lands, totalling 2.904 acres, located on the north side of Ellesmere Road, just east of Kennedy Road, were acquired for and in connection with the Ellesmere/CNR Grade Separation Project, from Sextet Investments Limited and Cheeseworth's Limited on October 17, 1978. The lands were listed for sale on October 8, 1998 with CB Richard Ellis on the Toronto Real Estate Board MLS without an asking price. In spite of numerous inquiries, only two offers were received, neither were indicative of our estimate of market value. After further consultation with the realtors involved, it was learned that many prospective purchasers were concerned about the effects of the former City of Scarborough Tree By-law (25150) and its impact on the site's development potential. The trees, identified as being a significant stand of oak trees, are clustered centrally near the north property limit. The property was remarketed in the spring of 1999 at an asking price of $290,000.00 per acre. Three offers were received on August 19, 1999.

Comments:

The following are the details of the offers received:

TotalPrice

PurchaserPurchase Priceper AcreDepositTerm

Lambertus Dekkema

Holdings Inc.$801,000.00$275,826.44$40,050.00-The purchase price is based on a

developable area of 2.904 acs., and is subject to adjustment at the rate of $275,826.44/acre, if the

developable area is reduced as a

result of the Tree By-law.

-The purchaser satisfying itself as

to the suitability of the intended use within 30 days of acceptance.

Richmond Property

Corporation$652,000.00$224,517.90$31,000.00-Conditional on soil testing and

Certified rezoning by vendor for residential

Chequerental apartments within 11 months of acceptance by vendor and receipt of site plan approval.

1077572 Ontario$300,000.00$103,305.78$50,000.00-Unconditional

Inc. and IDMDOR

Manufacturing Inc.$400,000.00$137,741.04$50,000.00-Conditional of City rezoning and

Certifiedexemption from Tree By-law.

Cheque

The highest and best offer received from Lambertus Dekkema Holdings Inc. is recommended for acceptance:

Subject Property:Part of Lot 14, Registrar's Complied Plan 9953, City of Toronto, (formerly City of Scarborough) designated as Parts 7, 8, 10, 11, 15, 16 and 17 on Reference Plan 64R-8378, subject to the following easements.

Easements:(1)An existing easement over Parts 8 and 17, Plan 64R-8378 in favour of the Canada Life Assurance Co. as set out in Instrument No. 504624;

An existing easement over Parts 15, 16 and 17 on Plan 64R-8378 in favour of Bell Canada as set out in Instrument No. TR-039426;

An easement to be reserved over Parts 1 and 2 on draft reference plan, a copy of which is attached for information in favour of I.D.M.D. Corporation for sewer purposes; and

An easement to be reserved over Parts 3, 4 and 5 on draft reference plan, a copy of which is attached for information in favour of the TTC for sewer purposes.

Location:North side of Ellesmere Road, east of Kennedy Road

Dimensions:200.56 metres (658.02 feet) of frontage on Ellesmere Road with an average depth of 53.34 metres (175 feet)

Site Area:11,750.08 square metres (126,481 square feet or 2.904 acres)

Developable

Site Area:Estimated 2.594 acres, subject to a survey confirming area affected by the Tree By-law

Property Type:Vacant Land

Zoning:M-Industrial

Official Plan:General Industrial uses with High Performance Standards

Recommended

Sale Price:$801,000.00 (based on site area of 2.904 acres), subject to a price reduction, based on $275,826.44/acre for the area of land which may be affected by the former City of Scarborough Tree By-law

Deposit:$40,050.00 (certified cheque) representing a 5 per cent deposit

Purchaser:Lambertus Dekkema Holdings Inc.

Closing Date:February 4, 2000

Terms:Cash on closing, plus GST, subject to the usual adjustments

Listing Broker:CB Richard Ellis

Selling Broker:CB Richard Ellis

Commission:Four (4) per cent, plus GST, payable on closing of the transaction

Costing Unit No. CP300J56258 has been put in place to charge costs directly related to the maintenance and sale of this City-owned property, and includes sale commissions, surveying and registration of the sale. A recommendation is included in this report to direct a portion of the sale proceeds to close out the account for this property.

Discussion:

A stand of oak trees located near the rear centre of the site, is considered of significance and is subject to the provisions of the former City of Scarborough Tree By-law (25150) which prohibits the removal of trees having a diameter of 30 centimetres or more. Forestry staff of Economic Development Culture and Tourism have identified the stand of trees as being of Carolinian forest origin, however, the stand is somewhat isolated, being located near the rear of the lot in a predominately industrial area, without a pedestrian or vehicle link to public space.

The purchase price of $801,000.00 as submitted by the highest offeror, is based on 2.904 acres suitable for development purposes over the entire site. As a condition of the Purchaser's offer, should the developable area of the site be reduced because of the provisions of the Tree By-law, the purchase price is to be reduced on the basis of $275,826.44/acre times the treed area as determined by Forestry staff and a survey. The City will be responsible for completing the survey plan identifying the area of land affected by the Tree By-law within 30 days of acceptance and prior to closing of the transaction.

Given that the purpose of the Tree By-law is to protect trees of a specific size, coupled with the fact that the trees are on publicly held property, it is considered prudent to adjust the sale price based on the developable area rather than circumventing the Tree By-law by granting an exemption. Such action will ensure that Council's discretion relative to the Tree By-law is unfettered. Should the Purchaser seek relief from the Tree By-law to accommodate a particular development proposal, that option stills exists through the Site Plan Control process.

It is estimated that an area of approximately 0.31 acres is affected by the Tree By-law. This translates to a price reduction of $85,506.00. The area and price reduction are subject to confirmation through the preparation of a survey plan. Reducing the sale price by approximately $85,506.00 reflects a sale price of $715,494.00 which is superior to any other offers received.

Conclusion:

The Offer to Purchase, based on $275,826.44/acre, as detailed herein, is considered fair and reasonable and reflective of current market value and should be accepted.

Contact Name:

Roland Mayr, Manager of Disposals 392-1166 and/or Melanie Hale-Carter, Valuator-Negotiator, Real Estate Services, 397-0585, Fax 392-1880, E-Mail Address: melanie_halecarter@metrodesk.metrotor.on.ca (ac99063.doc)

Brenda Glover

Acting Commissioner of Corporate Services