September 22, 1999

To: Administration Committee

From: Acting Commissioner of Corporate Services

Subject: Proposed Purchase of former Hydro Corridor Lands for Park

In the Terraview-Willowfield Community

South of Highway 401 West of Warden Avenue

(Ward 14 B Scarborough Wexford)

Purpose:

To authorize the purchase of that portion of the former Hydro Corridor shown as Block 37 on the attached sketch (Schedule AA@).

Funding Sources:

As per the Council directive of July 27, 28, 29 and 30, 1999 (Administration Committee Clause No. 2, Report No. 2) funds for this $1,000,000.00 acquisition are available in the former Scarborough Parkland Reserve Fund - $700,000.00 and in the Civic Centre Expansion Fund - $2,300,000.00.

Recommendations:

It is recommended that:

(1) the Acting Commissioner of Corporate Services or the Executive Director of Facilities and Real Estate be authorized to accept an Offer to Sell from 915343 Ontario Inc. (Norstar Group of Companies) for that part of Lot 33, Concession 2, City of Toronto (formerly City of Scarborough) being part of Part 2, Plan 64R-15854 and shown for ease of reference as Block 37 on the attached sketch (Schedule AA@) in a form satisfactory to the City Solicitor and at a price of $1,000,000.00;

(2) the City Solicitor be authorized to complete the transaction according to the terms and conditions of the Offer to Sell; and

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

Background:

Council at its meeting held on July 27, 28, 29 and 30, 1999, directed that $3,000,000.00 be set aside (Civic Centre Expansion Fund - $2,300,000.00 and from the Parkland Reserve Fund - $700,000.00), for the acquisition of parkland in the Hydro Corridor in the North Bridlewood, Wishing Well, and Terraview-Willowfield Communities, on the condition that approximately 12.5 acres of Priority 1 lands be acquired north of Highway 401 in the South Bridlewood Community for stormwater as previously approved by Council.

Attempts to acquire the Priority 1 lands within the corridor north of Highway 401 have been ongoing, however the owners, Graywood Developments, were initially reluctant to deal with the City because of the ongoing OMB hearing respecting their application to amend the Scarborough Official Plan and Zoning By-law as they pertained to the corridor lands. During or immediately following the OMB hearing and the City=s subsequent appeal of that decision, Graywood marketed residential building lots to a number of builders active in the G.T.A. The lots were purchased conditional on Graywood conveying fully serviced lots within a registered plan of subdivision.

Much of the Priority 1 land is now under contract to builders who have in turn initiated marketing plans in anticipation of the registration of the subdivision and pending conveyance from Graywood. Negotiations with the builders have been further complicated by the fact that we are asking that the approved draft subdivision plans be amended by shortening some of the streets and/or eliminating lots to accommodate the City=s requirements. This has led to further discussions with Graywood seeking their consent to amend the agreements they have with the builders to reflect the fewer number of lots and the savings from having to provide servicing to the entire development area as originally proposed.

While the negotiations continue for the lands north of Highway 401, staff also negotiated with Norstar through a numbered company, 915343 Ontario Inc., owners of the Corridor lands south of the highway and more particularly the lands in the Terraview-Willowfield Community. The Norstar lands have received draft approval and the owners are proceeding with the design of the required servicing and anticipate construction of those services later this year. In response to the Council directive to acquire additional parkland in the Terraview-Willowfield Community Norstar has offered to eliminate ten lots by creating a block compromising of approximately 1 acre in size, adjacent to the lands identified as park on the draft plan. The offered sale price of this block is $1,000,000.00. The vendors have agreed to provide a copy of a Phase I Environmental Site assessment prior to completion of this transaction. Completion is tentatively scheduled for November 25, 1999 subject to adjustment by the City Solicitor.

Comments:

The block of land Norstar is offering to sell has been approved for residential development. As such the value of real estate is predicated on the potential for ten residential lots. Assuming they were serviced and ready for building, the market value is estimated to be in the range of $1.2 to $1.5 million. In this instance the services are not being installed, however the owner has incurred costs for planning and engineering to get the subdivision to the stage of draft approval. The hard costs associated with the deletion of services for these ten lots will not substantially alter the costs of servicing the balance of the subdivision. Rather the costs associated with amending the engineering drawings and the plan may equal any cost savings from not extending the road and services.

Norstar has taken the raw land purchased from Ontario Hydro successfully amended the official plan and zoning by-law and now taken it through a lengthy process to the present at which time they have draft approval for residential lots. The City=s request to delete ten lots, create a block and truncate the road and services has a considerable impact on the anticipated revenue. The loss of anticipated revenue is reflected in the proposed sale price.

Council directed the purchase of these lands, subject to first acquiring the Priority 1 lands north of Highway 401. However the complications associated with the contractual obligations surrounding the sale of those lands to third parties have created a timing problem. In this instance Norstar have offered to sell the lands in the Terraview-Willowfield area now. They are not prepared to postpone the sale indefinitely pending the outcome of negotiations with the parties north of Highway 401.

Conclusion:

The acquisition of these lands from Norstar, while not synchronized with the Council directive of July 27, 28, 29 and 30, 1999, may represent the last opportunity to acquire additional parkland in this community at this price.

Contact Name:

Roland Mayr, Telephone B 392-1166, Fax - 392-1880, E-mail - @toronto.ca (AC99139).

Brenda Glover

Acting Commissioner, Corporate Services

RM:ps