To:Corporate Services Committee
From:City Clerk, Office Consolidation Sub-Committee
Subject:277 Victoria Street - Office Space Consolidation (Ward 24 - Downtown)
Recommendation:
The Office Consolidation Sub-Committee recommends the adoption of the report
(March 8, 1999) from the Executive Director of Facilities and Real Estate Division.
Background:
The Office Consolidation Sub-Committee on March 10, 1999, had before it a report
(March8,1999) from the Executive Director of Facilities and Real Estate Division respecting
"277 Victoria Street - Office Space Consolidation (Ward 24 - Downtown).
The Sub-Committee's recommendation is noted above.
Yours truly,
City Clerk,
Office Consolidation Sub-Committee
Gail Fowler
990310.17
(Report dated March 8, 1999, addressed to
the Sub-Committee- Relocation of All Members of Council to City Hall,
from the Executive Director of Facilities and Real Estate Division.)
Purpose:
To provide background information on City-owned office building at 277 Victoria Street to
the Sub-Committee - Relocation of all Members of Council to City Hall.
Funding of Sources, Financial Implications and Impact Statement:
Not applicable.
Recommendations:
It is recommended that the City-owned office building at 277 Victoria Street be treated as a
temporary part of the City's office portfolio, and provision be made in the Office
Consolidation Detail Plan for relocation of staff groups located at 277 Victoria once the
timing of its redevelopment is determined.
Council Reference/Background/History:
The Strategic Policies and Priorities Committee, at its meeting held on January 26, 1999
recommended the adoption of the January 25, 1999 report from the Commissioner of
Corporate Services and requested:
"the Commissioner of Corporate Services to clarify in a report to the next meeting of the
Sub-Committee - Relocation of All Members of Council to City Hall, that the building at 277
Victoria Street forms part of the Yonge-Dundas Redevelopment Project and has been declared
surplus, and as such, should be considered as a temporary location building."
Comments:
277 Victoria Street is located on the east side of Victoria Street, just north of Dundas Street
East and one block east of Yonge Street. The site has a frontage of 92.71 feet X 116.15 feet
for a total area of 10,800 square feet.
It is improved with an 11 storey office building containing a total leaseable floor area of
approximately 109,700 square feet inclusive of the basement and penthouse levels. Average
leaseable floor area for a typical floor is approximately 9,800 square feet. The building
originally was a 6 storey building constructed around 1920 with a 5 storey addition made
during 1989-1990.
Currently, City staff occupy the entire floors 3 to 11 of 277 Victoria Street. The first floor is
leased to a restaurant (Second Cup) until November 30, 1999, with City staff occupying the
balance of space not forming part of the ground floor lobby. A small portion of the basement
level is leased to Rogers Cable until October 31, 2005 and a copy shop (to September 14,
2000) with the balance of the basement space used by the City for storage purposes. Part of
the second floor is leased to Ryerson Polytechnical University on a month to month basis,
with a 90 day termination clause.
The City acquired 277 Victoria Street in April of 1996 to consolidate its downtown office
space requirements from leased to City-owned space. The purchase price was $3,700,000.00.
Yonge-Dundas Redevelopment Project:
In December of 1996, the former City of Toronto Council approved in principle the
Yonge-Dundas Redevelopment Project, a public-private initiative aimed at revitalizing Yonge
Street. At its meeting held on July 8, 9, and 10, 1998, the new City of Toronto Council gave
final approvals for this project, including the expropriation of properties along Yonge Street,
38 Dundas Street East, and 259 Victoria Street, all as shown on the attached Appendix A.
This project will contain a public square located above a City-owned underground parking
facility and surrounded by commercial uses. One of the development parcels around this
public square is known as Parcel B which includes 277 Victoria Street.
Parcel B is comprised of 277 Victoria Street and the adjoining property municipally known as
38 Dundas Street East, a triangular corner parcel which contains a retail building with a
parking area. Parcel B has been identified as a potential site for retail, hotel and residential
uses with possible interim use for retail space. The City's planning objective as confirmed by
the Ontario Municipal Board is to redevelop Parcel B as part of the Yonge-Dundas
Redevelopment Project and maximize value for the City owned land, effectively reducing the
net cost of the public square development.
Redevelopment of Parcel B:
The former City of Toronto Council authorized a Request for Qualifications ("RFQ") for the
development of Parcels A, B, and C. Staff issued the RFQ in Spring of 1997 and followed this
with a Request for Proposal ("RFP") for Parcels B and C in July, 1997. In light of the
unacceptable response received, the former City of Toronto Council , in October of 1997,
approved the reduction of Parcel B to its current configuration and authorized staff to
negotiate with the owner of 38 Dundas Street East in order to maintain a development option
for Parcel B.
While the ultimate development of Parcel B is to meet the planning objectives of the
Yonge-Dundas Redevelopment Project, market demand plays a pivotal role in its timing and
use. There is some flexibility and redevelopment may be in the form of an interim or a long
term development.
Interim Development:An interim development would likely involve a retail commercial
project comprising 38 Dundas Street East and the basement, first and second floors of 277
Victoria Street. This interim use would likely remain for up to 10 years. After this period, the
buildings on Parcel B would be demolished to make way for the long term development of
this site as contemplated under the Yonge-Dundas Redevelopment Project. Under the interim
scenario, only the basement and the first two floors would be affected with the earliest date for
vacant possession likely to be mid to late 2000. Vacant possession for the balance of office
space from floors 3 to 11 would be after 10 years.
Long Term Development:If there is current market interest, the City could proceed directly
with the long term development of Parcel B through a development call process. While the
planning and approval process would be slightly longer with this development scenario,
vacant possession of the entire 277 Victoria Street building is required. It is estimated the
earliest vacant possession date for the building to be about 18 months after this scenario is
selected.
There have been discussions with the owner of 38 Dundas Street East for a possible joint
venture with the City for the redevelopment of Parcel B on either an interim or long term
basis, but, to date, no definitive proposal has been determined.
In Summary, there is flexibility amongst City staff respecting either an interim or long term
development of this site. The market tends to be in a state of flux and accordingly, whether or
not an immediate long term development would be successful at this time or in the near future
is still being investigated. Accordingly, any position that the Sub-Committee- Relocation of
All Members of Council to City Hall has respecting the utilization of office space at 277
Victoria Street for City staff for a relatively short term, say up to 3 years, could be taken into
consideration as the future development options for Parcel B are developed.
Declaration of Surplus:
City Council has identified and approved 277 Victoria Street as being part of the
Yonge-Dundas Redevelopment Project, and the Ontario Municipal Board has confirmed the
planning objectives of the various development parcels within this project. While a RFQ and a
RFP have been previously issued inviting submissions for the development of Parcel B,
formal City Council authority to declare 277 Victoria Street surplus to municipal requirements
would be sought once the City has identified a potential purchaser or joint venture partner for
the development. To date, City Council has not formally declared 277 Victoria Street surplus
to municipal requirements.
Contact Name:
Doug Wong, Telephone: 392-1858, Fax: 392-1880, dwong@toronto.ca (99047.wpd)
Susanne Borup
Executive Director of Facilities and Real Estate Division
