March 29, 1999

To:Corporate Services Committee

From:Commissioner of Community & Neighbourhood Services

Subject:Surplus City Property: (1) two sites on Grand Avenue (Ward 2); and

(2) Lawrence/Allen Road (Ward 8)

Purpose:

To respond to the request contained in the report adopted by the Community & Neighbourhood Services Committee that the Commissioner report back by April, 1999, "on the results of a proposal call for affordable rental and ownership housing" on the Grand Avenue and Lawrence/Allen Road sites, withheld from sale for this purpose.

Funding Sources, Financial Implications and Impact Statement:

There are no funding implications associated with the Grand Avenue sites. For the Lawrence /Allen site, a business case and detailed development proposal will be brought forward for Council approval within six months.

Recommendations:

It is recommended that:

(1) the Grand Avenue sites no longer be withheld from sale in anticipation of an affordable housing development, given the significant costs of soil remediation; and

(2) with the successful completion of an Affordable Housing Demonstration Project proposal call for transitional (affordable rental) housing, the Lawrence /Allen Road site continue to be held from sale pending the submission of a business case for Council approval.

Background:

At its meeting of November 16, 1998, the Council Strategy Committee for People Without Homes adopted my report which recommended, amongst other things, that the City-owned sites on Grand Avenue and Lawrence /Allen continue to be held from sale. I was requested to report back by April 1999, on the results of the proposal calls for affordable rental and ownership housing.

For the Grand Avenue sites, your Committee further recommended that the Commissioner of Corporate Services expedite the soil remediation study, and that I report with the Commissioner of Urban Planning and Development Services on the feasibility of a community design concept for the northerly block, the need for open space on the southerly block, an underpass from Legion Road to the south, etc.

Council adopted this joint report at its December 16, 1998, meeting.

Comments:

(1) Grand Avenue blocks

The Real Estate Division has provided my staff with a consultant's report which reviewed the findings of previous soil analyses, added the results of recently conducted soil sampling, and estimated the cost of clean-up of the two Grand Avenue blocks at $2.8 million to bring them to residential standards.

While only the northerly block was considered for affordable housing use, it is the more contaminated of the two based on its previous use as an incinerator site, and later as a waste transfer station. The estimate is qualified in a number of ways - it does not include the break-up and removal of surface asphalt and concrete; much contaminated material is several feet below the surface so that clean material must be removed and stock-piled to access it; and some excavation is required below the water table. The consultant points out that further delineation testing is required to refine the estimate. A site-specific risk assessment should be considered prior to embarking on an excavation and removal process.

The qualified estimate of clean-up cost is equivalent to $8200/unit based on an assumed 340 unit development. Given current housing economics, it would not be feasible to cover this additional cost and produce housing at prices or rents affordable to a lower income target market. Therefore a proposal call has not been undertaken.

In the face of the likely clean-up costs, I believe it is no longer appropriate to hold on the Grand Avenue site for affordable housing. If the clean-up costs can be covered by other means (i.e. not borne by the development), then I would like the opportunity to revisit the possibility of an affordable housing component at that time.

(2) Lawrence/Allen Road

A two-stage proposal call for the Affordable Housing Demonstration Project closed in the second week of December. The intention was to select a community-based not-for-profit organization to meet the needs of groups who are currently under serviced, provide affordable housing, demonstrate a range of housing models, and make effective use of any resources the City may provide. The target group for the majority of the units is single parents with children, either in emergency accommodation or in danger of ending up in the hostel system.

Target rent for a three-person household would be $554 per month, the current welfare shelter allowance. Appropriate training and support services also will be provided with no City operating subsidy. In addition, the group selected to develop the housing will have to contribute equity to the construction costs.

The small (half-acre) Lawrence/Allen site has already been through the planning approval process for a 24 unit, three-storey building. When the Province cancelled the social housing program in 1995, the final development agreement was not signed and the recommended zoning by-law was not enacted.

In response to the proposal call nine groups expressed an interest and outlined their program model. Three groups were selected to proceed to stage two. They demonstrated an appropriate operational model and sufficient expertise and resources to construct and operate the building for the long-term.

For the second stage of the selection process the three selected groups were asked to prepare a detailed capital and operating budget and detail what City capital resources would be required to facilitate construction.

The second stage proposals were examined by staff and reviewed by the advisory Reference Group chaired by Councillor Feldman. Based upon the advice of this Reference Group, the joint proposal from Out of the Cold and Congregation Darchei Noam is being advanced as the working framework for the preparation of a final business case for the development of the Lawrence /Allen site. The business case would also be used to help secure private mortgage funding for the majority of the construction cost.

Once an acceptable business case has been prepared, the Reference Group would then recommend it to Council for a decision.

Contact Name:

Joanne Campbell

Tel: (416) 392-7885

Fax: (416) 392-0548

Commission of Community and Neighbourhood Services