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Canada Mortgage and Housing Corporation
and Victoria Wood (Main Square) Inc
The Administration Committee recommends the adoption of the following report (July 9, 1999) from the Acting Commissioner of Corporate Services:
Purpose:
To obtain approval to execute the various agreements required to proceed with the proposed new Community Centre at Main Square.
Funding Sources and Financial Implications:
Capital Costs
The capital costs for this project are being shared equally with Central Mortgage & Housing Corporation (CMHC) based on a total cost of $9,000,000, excluding the G.S.T. rebate of $350,000. The $4,500,000 being provided by the City has been approved in the years 1999 and 2000 Capital Works s Program of the Economic Development Culture and Tourism Department. Attached is
the breakdown of the budget for the Project (see Appendix 1). The net operating cost is estimated to be $435,140 per year once operational in 2001.
Recommendations:
It is recommended that:
(1) authority be granted to enter into a Lease Agreement as outlined herein with Victoria Wood (Main Square) Inc. as general partner of and on behalf of Victoria Wood (Main Square) Limited Partnership for the leased space described herein on the terms and conditions contained herein;
(2) authority be granted to enter into a Cost Sharing Agreement with CMHC for 50 percent of the Capital Funding required to facilitate the construction of the new Community Centre, on the terms and conditions contained herein;
(3) authority be granted to enter into a Construction Licence Agreement, which is a side agreement to the lease agreement to deal with specific issues related to the construction of the new Community Centre;
(4) authority be granted to enter into any other ancillary agreements required in connection with the foregoing documents;
(5) the above noted lease and agreements be in a form acceptable to the City Solicitor;
(6) the appropriate City officials be authorized and directed to take the necessary action to give effect thereto; and
(7) the Chief Financial Officer and Treasurer be requested to report directly to the July 27, 28 and 29, 1999 Council meeting on the award of the contract for the project.
Background:
At its meeting in April 1996, City Council adopted the Communication from the Commissioner of Parks and Recreation of the former City of Toronto and directed the City Solicitor and the Commissioner of Parks and Recreation to enter into negotiations with the owner of the Main Square Site and CMHC to finalize the various agreements for the Main Square Project.
CMHC originally subleased and operated the residential portion of Main Square, but subsequently surrendered its lease to new owners of the leasehold interest in the lands. CMHC’s surrender of its lease was subject to the new owners permitting the construction of the Community Centre which is now out for tender. Subject to Council approval of the project CMHC reaffirmed its commitment to the City to fund 50 percent of the Capital Costs of the Community Centre to an up-set amount of $4,500,000.
Committee of Adjustment approval of the minor variances required for the proposed design and Site Plan Approval have been received.
An environmental report prepared by Halsall Environmental Inc. (HEI) for Jade Sea Properties dated October 31, 1997 indicates that the site appears to meet the Ministry of Environment requirements for its proposed use. This report was based on HEI reviewing the site and other Environmental Reports previously prepared for the site. City staff have reviewed HEI’s environmental report and are satisfied with same.
The bid package (drawings and specifications) for the project has been sent out for tender and will close on July 21, 1999. In order to avoid costly overruns associated with winter construction it is critical that the construction contract be awarded by Council before the summer break.
This report has been prepared in consultation with staff of the Economic Development Culture and Tourism Department.
The Project:
The new Community Centre will be approximately 6000 +/- sq. metres of new construction located within and on top of the under utilized existing parking garage on the site. The project includes the construction of a 12 m x 25 m pool with 5 lanes, a gym approximately high school size of 30 m x 19.5 m and other ancillary uses.
The new Community Centre replaces an existing deteriorated Centre which does not meet the needs of the surrounding community and has been identified for replacement for more than 10 years. A Working Committee with Community representatives had been established to address the needs of the community and a space program was developed to address the needs of the community.
Comments:
Subject to the approval of City Council, the terms and conditions of the various agreements are both fair and reasonable. The base terms and conditions are as follows:
Lease Agreement:
(a) the parties – Victoria Wood (Main Square) Inc. as general partner of and on behalf of Victoria Wood (Main Square) Limited Partnership as landlord and the City as tenant;
(b) the premises – a portion of the Main Square Site – as outlined on the plans attached as Appendix 2, together with various easement rights for access, services, maintenance and repair etc.;
(c) the term of the lease is to commence on or before October 31, 1999 and will expire on December 30, 2023;
(d) the City will pay nominal ($1.00 annually) rent for the premises, but will be responsible for its own realty taxes, utility costs, maintenance and repair, and any increase in the landlord’s realty taxes (if any) that results from the construction of the community centre;
(e) the City will be required to pay a one time up front lump sum payment of $50,000 to the landlord for its consulting fees and the cost of locking down the existing community space which amount forms part of the construction budget;
(f) the existing community space – the existing space being used by the City will be returned to the landlord upon completion of the new facility;
(g) construction is to be completed within 30 months of the commencement of the term of the lease; and
(h) Main Square Residential Tenants will not be required to pay any fees to use the Community Centre’s facilities. The daycare located at Main Square will also be entitled to use the Community Centre free of charge. (i.e., no user or admission fees);
(i) the City will not be permitted to assign the lease without the landlord’s prior written consent; and
(j) the City will be required to use the community centre solely for the purpose of a community recreation centre – no daycare centre, third party food services on retail or wholesale sales will be permitted.
Construction Licence Agreement:
The landlord will grant the City a licence over part of the underground parking garage and over part of the site above grade to enable the City to construct the Community Centre, for a total licence fee of approximately $55,000.00, which amount forms part of the construction budget.
Cost Sharing Agreement:
City and CMHC to share equally the cost of the facility, with CMHC’s maximum contribution being $4.5m.
CMHC will front-end the first $4.5 million of construction costs, with the City paying for the remainder of the costs.
City will have responsibility for and control of construction of the facility.
Implication of Not Going Forward:
If the community centre is not built then the community as a whole will suffer, due to the lack of space currently available. The City will have some non-recoverable fees for consultants that have already been paid and could not be recovered.
Conclusions:
That staff be authorized to proceed with finalization and execution of all necessary agreements.
Contact Names:
Bob Ferguson – Manager (416) 392-0266
Wayne Moss – Project Manager (416) 392-7119
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Appendix 1
Budget and Cost Estimate
Main Square Community Centre
Project No. 910082BM
Budget
CMHC $4,500 000.00 (1)
City Funding $4,500 000.00 (2)
GST Rebate (3.846%) $ 350,000.00
Total $9,350, 000.00
Note: (1) – CMHC has already funded $ 260 000.
(2) – City Funding, although already approved is cash flowed over the years 1999 and 2000.
Cost Projections
Expenditure Associated with Original Design $ 480,000.00 (1)
Professional Fees $ 520,000.00
Construction $8,115,000.00 (2)
FF&E $ 100,000.00
Miscellaneous $ 135,000.00
Total $9,350,000.00
Note: (1) The original design, which was completed was based on a different location within the complex. Because of the physical constraints of this location and disruption to the existing facilities (residents and community tenants), the original design was abandoned. In addition, it could not have been built within the existing budget.
(2) Includes a 10 percent contingency and approximately $80,000.00 of allowances for the leasing of parking associated with construction and changes related to disruption/cleaning of other tenant facilities.
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