April 29, 1999

To:Corporate Services Committee

From:Commissioner of Corporate Services

Subject:Sale of Surplus Spadina Project Property at

153 Everden Road (Ward 28 - York Eglinton)

Purpose:

To recommend a process for the sale of 153 Everden Road.

Funding Sources, Financial Implications and Impact Statement:

Revenue in the minimum amount of $200,000.00, less closing costs and the usual adjustments, subject to the revenue sharing agreement with the Province pursuant to Clause No. 1 of Report No. 25 of the former Metropolitan Corporate Administration Committee, 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 153 Everden Road submitted by Mr. Frank Dyer in the amount of $193,000.00, not be accepted;

(2)the Commissioner of Corporate Services or the Executive Director of Facilities and Real Estate be authorized to sign back and submit a counter-offer to Mr. Dyer at a purchase price of $200,000.00, which counter-offer shall be irrevocable by the City until June 21, 1999 but otherwise on the same terms and conditions as the offer made by Mr. Dyer including the 2 year option in favour of the City;

(3)if Mr. Dyer 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 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. OCA700CA2510;

(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. Dyer 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/History:

The Province of Ontario is the owner of 153 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 is required.

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" 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 May 20, 1997 appraisal estimating the fair market value of this property at $215,000.00, together with an agreement of purchase and sale.

Comments and/or Discussion and/or Justification:

The tenant, Mr. Frank Dyer, 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 of Report No. 9 of the 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 January 5, 1999 at which time both parties presented oral and written submissions in support of their respective estimates of market value. It is noted that the City's value was based upon the most recent appraisal in the amount of $215,000.00. In a written decision, the arbitrator, Ms. Patricia Dunn, concluded that $200,000.00 to $210,000.00 more accurately represents fair market value of the property as of May 20, 1997.

Subsequent to the arbitrator's decision, Mr. Dyer submitted an offer to purchase in the amount of $193,000.00. A summary of the property and the terms and conditions in Mr. Dyer's offer to purchase are as follows:

This offer does not conform with the Council directive of July 29, 30 and 31, 1998 to offer the property to the tenants on the basis of market value applicable at the date they expressed written interest in purchasing, in this instance, May 20, 1997. It is therefore recommended that Mr. Dyer's offer not be accepted and that the City submit a signed back counter-offer increasing the purchase price to $200,000.00, but otherwise on the same terms and conditions as the offer made by Mr. Dyer, which counter-offer shall be irrevocable until June 21, 1999. In the event that Mr. Dyer does not accept this counter-offer within the time frame specified, the property should then 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 May 20, 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 Agreement with the Province of Ontario authorized by Clause No. 1 of Report No. 25 of the former Metropolitan Corporate Administration Committee as adopted by Council on December 4, 1996 provides that the Provinces share of the sale proceeds is to be based upon current market value. An appraisal report with an effective date of October 7, 1998 estimates the value of the property at $245,000.00.

Conclusion:

The sale of this property at $200,000.00 is considered fair and reasonable, reflecting market value as at May 20, 1997 in accordance with Council directives.

Contact Name:

Michelle DeVey, Valuator-Negotiator, Real Estate Services, (416) 392-8160, Fax No. (416) 392-4828 E-Mail Address: michelle_devey@metrodesk.metrotor.on.ca (cs99064.wpd)

Margaret Rodrigues

Commissioner of Corporate Services

Mde/vp

Appendix "A"

153 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 1.5 or 2-storey dwellings located in the vicinity of the subject property.