39 - 41 Fenmar Drive

Assessment Roll No. 19 08 01 3 310 00400

(Ward 6 - North York Humber)

The Administration Committee recommends the adoption of the following report (September 23, 1999) from the Chief Financial Officer and Treasurer:

Purpose:

To report on a request for an extension of an agreement entered into by the former City of North York with the owner of the above noted property, Carlow Investments Inc.

Funding:

None required.

Recommendations:

It is recommended that:

(1)the City of Toronto enter into an Agreement in a form acceptable to the City Solicitor, amending the agreement pertaining to 39 - 41 Fenmar Drive, dated August 25, 1997, between the former City of North York and Carlow Investments Inc. ("Carlow") which agreement shall extend the deadline to July 1, 2000, for the completion of construction bringing the gross floor area to a minimum of 85,000 square feet, and shall provide that upon completion of the structure by the deadline, the deposit of $62,400 be refunded to Carlow; and

(2)the appropriate officials of the City of Toronto be authorized and directed to take the necessary action to give effect thereto.

Background:

Council of the former City of North York entered into an agreement on August 25, 1997 with Carlow who is the current owner of 39 - 41 Fenmar Drive. Under this agreement, Carlow has the following obligations:

(1)to submit any environmental reports in its possession or control which identify the extent of the contamination and the expected cost to remediate (this was done September 1997);

(2)to make a deposit of $62,400, (this was done by cheque dated September 26, 1997);

(3)to remediate the property, at its expense, within 3 months of the agreement, to the satisfaction of the Ministry of Environment and Energy ("MOEE") and to obtain a discharge or certificate of compliance with respect to the Director's Orders (this was done on December 16, 1997) and;

(4)upon completion of the remediation, to submit a phase two environmental assessment to the Treasurer verifying the extent and completion of the environmental remediation to the satisfaction of the Treasurer and Medical Officer of Health (this was done on December 8, 1997).

Upon Carlow's compliance with its above mentioned obligations, the City was required under the agreement to provide a tax clearance certificate. This was done on December 19, 1997.

Pursuant to the agreement, Carlow was further required to obtain a building permit to erect a structure bringing the gross floor area at 39 - 41 Fenmar Drive to a minimum of 85,000 square feet thereby generating tax revenue of roughly $59,000 per year for the City. Carlow was also required to occupy the structure for its business purposes on or before June 30, 1998, failing which it would forfeit its deposit of $62,400. The building permit has now been requested but the structure is incomplete. The anticipated completion date is March, 2000. Pursuant to the terms of the agreement, the City has not refunded the deposit.

Discussion:

By letter dated February 20, 1998 to the Chief Financial Officer and Treasurer, Carlow Investments Inc. requested, an extension of the completion of the building to December 31, 1998. Subsequently, by letter dated June 3, 1998 to the Chief Financial Officer and Treasurer, Carlow requested that it be permitted to further extend the completion of the building to July 1, 1999. By verbal discussions with various members of staff, a further extension to July 1, 2000 has been requested by Carlow.

The City has two options with respect to extending the completion deadline of the 85,000 square foot structure:

(1)do not extend the deadline and do not refund the deposit of $62,400; in compliance with the current agreement; or

(2)extend the deadline by amendment of the agreement, refund the deposit when the structure has been completed prior to July 1, 2000, and collect approximately $59,000 per year in additional tax revenue resulting from the increased assessment of 39 - 41 Fenmar Drive.

It is recommended that option 2 as outlined above, extending the completion date of the structure to July 1, 2000 be adopted. The additional annual revenue would offset the deposit in year one alone, with additional annual tax revenues continuing each year thereafter.

Conclusion:

As Carlow has not brought the square footage of the building's floor space at 39-41 Fenmar Drive up to the minimum of 85,000 square feet as required under its Agreement with the former City of North York, Carlow is not currently entitled to a return of its deposit of $62,400 from the City. This report recommends that the City enter into an agreement amending the August 25, 1997 agreement between the former City of North York and Carlow, so as to extend the deadline for completion of such construction to July 1, 2000.

Contact Name:

Giuliana Carbone,

Director of Revenue Services

(416) 392-8065

Margo L. Brunning,

Manager, Collections/ Receivables,

Payments and Regional Customer Service

(416) 395-6789

Christina Hueniken,

Solicitor, Legal Division Services

(416) 392-8429