January 22, 1999

To:Corporate Services Committee

From:Commissioner of Corporate Services

Subject:Sale of Surplus Spadina Project Property at 149 Everden Road

Ward 28 - York-Eglinton

Purpose:

To report on an offer received for the sale of 149 Everden Road and to secure authority for a process for the disposal of 149 Everden Road.

Financial Implications:

Revenue in the minimum amount of $195,000.00, less closing costs and the usual adjustments, subject to the revenue sharing agreement with the Province pursuant to the former Metropolitan Corporate Administration Committee Report No.25, Clause No.1, approved on December 4, 1996 will be realized from the sale of this property if the recommendations in this report are approved.

Recommendations:

It is recommended that:

(1)the offer to purchase the property at 149 Everden Road in the amount of $180,187.50 made by Mr. Zamonsky not be accepted;

(2)the Commissioner of Corporate Services on the City's behalf, be authorized to sign back and submit a counter-offer to Mr. Zamonsky with a purchase price of $195,000.00, which counter-offer shall be irrevocable by the City until March 12, 1999, but otherwise on the same terms and conditions as the offer made by Mr. Zamonsky including the 2 year option in favour of the City;

(3) if Mr. Zamonsky accepts the City's counter-offer, then it is further recommended that:

(a)the requirement embodied in Clause No. 14, of Report No. 27 of the former Metropolitan Management Committee adopted on September 28, 1994 regarding the the minimum required deposit of 10 per cent of the purchase price be waived;

(b)authority be granted to direct a portion of the sale proceeds on closing to fund the outstanding balance of Costing Unit No. CP300J56163; and

(c)the City Solicitor be authorized and directed to take the appropriate action, in conjunction with Province of Ontario Officials and/or agents, to complete the transaction and he be further authorized to amend the closing date to such earlier or later date as he considers reasonable;

(4)in the event Mr. Zamonsky does not accept the City's counter-offer the property be listed for sale through the T.R.E.B. Multiple Listing Service subject to the existing tenancy; and

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

Council Reference/Background:

The Province of Ontario is the owner of 149 Everden Road, subject to a ninety-nine year lease in favour of the City of Toronto. By its adoption of Clause No. 1 of Report No. 3 of The Corporate Administration Committee on February 12 and 13, 1997, Metropolitan Council declared the property surplus pursuant to By-Law No. 56-95 and authorized its disposal. The procedures with respect to By-Law No. 56-95 have been complied with, a utility canvass has been completed and no easement requirement has been identified.

By its adoption of Clause No. 4 of Report No. 9 of The Corporate Services Committee on July 8, 9, and 10, 1998, Toronto Council authorized that properties listed in Schedule "A", including the subject, be sold to sitting tenants at market value determined as at the date of expression of their interest and further that such sale be subject to an option to repurchase at that purchase price (unadjusted) for a period of two years. Accordingly, the tenant was provided with our March 6, 1997 appraisal estimating the fair market value of this property at $195,000.00 together with an agreement of purchase and sale.

Comments:

The tenant, Mr. Gilbert Zamonsky, rejected the City's appraised value, and requested the matter of market value be referred to arbitration in conformance with Council's directive to have a third party arbitrator attempt to bring the parties together. (Clause No. 4, Report No. 9, Corporate Services Committee adopted as amended by Council at the meeting held on July 8, 9, and 10, 1998). An arbitration hearing was held on November 24, 1998 at which time both parties presented oral and written submissions in support of their respective estimates of market value. In a written decision, the arbitrator, Ms. Patricia Dunn stated that the City's market value estimate at $195,000.00 represented fair market value as at March 6, 1997.

Subsequent to the Arbitrator's decision, Mr. Zamonsky submitted an offer to purchase, in the amount of $180,187.50. This offer does not conform with the Council directive of July 29, 30, and 31, 1998 to offer the property to the tenants at fair market value as at the date they originally expressed interest in purchasing, in this instance March 6, 1997.

A summary of the property and the terms and conditions in Mr. Zamonsky's offer to purchase are as follows:

Property Address:149 Everden Road

Legal Description:Part of Lot 68, Registered Plan 1103, City of Toronto (formerly City of York).

Lot Size:7.62 metres (25 feet) fronting onto Everden Road

40.2 metres (132 feet) depth

Location:East side of Everden Road, south of Eglinton Avenue

Improvements:Detached, brick bungalow

Right-of-Way:Subject to a mutual right-of-way.

Occupancy Status:Tenanted

Date Interest Expressed:March 6, 1997

Amount of Offer:$180,187.50

Deposit:$9,750.00

Purchaser:Gilbert Zamonsky

Closing Date:April 15, 1999

Terms:Cash on closing, subject to the usual adjustments and registration of an option to purchase.

The third party arbitrator having received written and oral submissions relative to the value of the property has rendered a written decision in which she expresses that fair market value is $195,000.00. It is therefore recommended that Mr. Zamonsky's offer not be accepted and that the City submit a signed back counter-offer increasing the purchase price to $195,000.00, which counter-offer shall be irrevocable until March 12, 1999. In the event that Mr. Zamonsky does not accept this counter-offer within the time frame specified, it is recommended that the property be listed for sale subject to the existing tenancy.

This is a proposed sale to an existing tenant and is based on market value as at March 6, 1997. Council directed that comparable sales data be provided for property sales in the Spadina corridor. Appendix "A" identifies three comparable sales located in the vicinity of the subject.

The revenue sharing agreement with the Province as regards the Spadina corridor properties (former Metropolitan Corporate Administration Committee, Report 25, Clause No. 1, approved December4, 1996) stipulates that the properties are to be sold at current market value and the revenues are to be shared on that basis. An appraisal report with an effective date of September 15, 1998 estimates the value of the property at $220,000.00 which is the basis upon which the revenues would be shared with the Province. The provincial share of the net proceeds would be approximately $73,333.33, less administrative costs and normal adjustments.

Conclusion:

The sale of this property at $195,000.00 is considered fair and reasonable, reflecting market value as at March 7, 1997 in accordance with Council directives and, accordingly, Mr. Zamonsky's offer of $180,187.50 should not be accepted and he should be provided with a counter-offer of $195,000.00 irrevocable to March 12, 1999. Should Mr. Zamonsky choose not to accept the City's counter-offer, the property should be listed on the open market subject to the existing tenancy.

Contact Name:

S. Badin, Valuator-Negotiator, Real Estate Services, (416) 392-8142, Fax No. (416) 392-4828 E-Mail Address: sheryl_badin@metrodesk.metrotor.on.ca (cs99024.wpd)

Margaret Rodrigues

Commissioner of Corporate Services

SAB/vp

Appendix "A"

149 Everden Road - Comparable Sales

The following three addresses represent recent comparable sales of properties that are similar to the residence which forms the subject matter of this report. These three properties consist of brick bungalows located in the vicinity of the subject property.

Approximate

AddressLot SizeSale PriceDate of Sale

64 Gloucester Grove25 x 132$200,000.00December 9, 1996

479 Winnett Avenue25 x 133$193,000.00January 29, 1997

489 Winnett Avenue25 x 133$186,500.00November 4, 1996