December 2, 1998

BUDGET COMMITTEE:

I am enclosing for your information and any attention deemed necessary, Clause No.19 contained in Report No.17 of The Corporate Services Committee, headed "Renewal of Lease- Welfare Office, 1860 Wilson Avenue (Ward6- North York/Humber)", which was adopted, without amendment, by the Council of the City of Toronto at its meeting held on November25, 26and27, 1998.

for City Clerk

J. A. Abrams/csb

Encl.

Clause sent to:Commissioner of Corporate Services

Budget Committee

CITY CLERK

Clause embodied in Report No. 17 of the Corporate Services Committee, as adopted by the Council of the City of Toronto at its meeting held on November 25, 26 and 27, 1998.

19

Renewal of Lease - Welfare Office

1860 Wilson Avenue

(Ward 6 - North York/Humber)

(City Council on November 25, 26 and 27, 1998, adopted this Clause, without amendment.)

The Corporate Services Committee recommends the adoption of the following report (November4, 1998) from the Commissioner of Corporate Services:

Purpose:

To renew the lease with Banca Commerciale Italiana of Canada, the Mortgagee in Possession, at 1860 Wilson Avenue which contains 23,194 square feet of general office space and is occupied by Area Office "L" of the Welfare Division.

Financial Implications:

Funds to cover the expenditures identified in this report are part of the 1998 Social Services Operating Budget. The Chief Financial Officer and Treasurer, in accordance with Provincial regulations, has certified that financing for the expenditure in the amount of $1,360,000.00 is within the Updated Financial Debt and Obligation Limit. As a result of the renewal, the estimated reduction in annual basic net rent savings is approximately $231,940.00 per annum or a total of $1,159,700.00 over the five years of the renewal.

Recommendations:

It is recommended that:

(1)the City of Toronto enter into a five-year lease renewal with Banca Commerciale Italiana of Canada, The Mortgagee in Possession, on the terms and conditions outlined in this report and in a form acceptable to the City Solicitor;

(2)financing in the amount of $1,360,000.00 be approved;

(3)this report be referred to the Budget Committee for information; and

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

Background:

Metropolitan Council, by the adoption of Clause No. 15 of Report No. 17 of the Management Committee on May 8, 1991, authorized a lease agreement with Skyline Developments Inc. for approximately 23,194 square feet of space at a minimum rent of $16.00 per square foot plus a minimum of 80 parking spaces at 1860 Wilson Avenue for use as a welfare office for a term of five years commencing November 1, 1991, with an option to renew for one further period of five years. Prior to the end of the first five year term, the Community Services Department advised that it preferred short term renewals that resulted in two, one year agreements on the same terms and conditions as the original lease. During this period, control of the property was taken over by the Banca Commerciale Italiana of Canada, as Mortgagee in Possession.

Comments:

On February 6, 1998, Community Services asked for a further renewal and confirmed that for the foreseeable future this space will be needed to service the clients of this area. A Space Rationalization Team is currently dealing with various buildings brought into amalgamation and is in the process of identifying if there is any space available in these facilities that can accommodate various City of Toronto Departments that are currently occupying leased premises as tenants. As a result, a canvass has been conducted based on the criteria and catchment area established by the Community and Neighbourhood Services Department. The survey revealed no suitable City-owned space to accommodate this operation at this time. Consequently, negotiations were commenced with Mr.John Gatto of Darton Property Advisor's who represent the Banca Italiana and an agreement was reached on a five year renewal at a minimum rent of $6.00 per square foot net with a clause that allows Community Services to terminate the agreement by giving six months' notice after the end of the third year. Vincent Scott, Director, Operational Support of the Social Services Division, concurs with this renewal that is based on the following:

(1)Term:Five years commencing November 1, 1998 and expiring October 31, 2003

(2)Termination:The Tenant has the right to terminate the lease by giving the Landlord six months written notice after the end of the third year.

(3)Rent:$6.00 per square foot net and a proportionate share of realty taxes and operating expenses. Based on 1997 actual figures $171,195.74 per year or $7.38 per square foot, the operating cost and realty tax are $171,195.74 perannum or $7.38 per square foot.

Conclusion:

In my opinion, the above terms and conditions are fair and reasonable and I am advised that they are acceptable to the Community Services Department. Another search for city-owned properties will be conducted prior to the expiry of the renewal term or notice of termination.

Contact Name:

Mr. Tony Pittiglio, Manager of Property Services; Telephone No. (416)-392-8155; Fax No.:(416)392-4828; E-mail Address: anthony_pittiglio@metrodesk.metrotor.on.ca.

(A copy of the map, attached to the foregoing report, was forwarded to all Members of Council with the November 9, 1998, agenda of the Corporate Services Committee and a copy thereof is also on file in the office of the City Clerk.)