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Acquisition for a Multi-Service Community Facility -
495 Sherbourne Street (Ward 25 - Don River)
The Strategic Policies and Priorities Committee recommends the adoption of the recommendations of the Budget Committee embodied in the following transmittal letter (February 18, 1998) from the Budget Committee:
Recommendations:
The Budget Committee on February 17, 1998, recommended to the Strategic Policies and Priorities Committee, and Council, that:
(1) the report (January 29, 1998) from the Commissioner of Corporate Services be deferred and considered during the Capital Budget process;
(2) the Mayor be requested to write to the President of the Ontario Realty Corporation (ORC) advising that Council continues to be interested in the acquisition of the subject property, considers it a high priority, requests that it not be sold to anyone else until such time as it has made its final decision, (which is expected to take place shortly), and requests that the ORC respond immediately to the City's request;
(3) the Chief Administrator Officer and the Chief Financial Officer and Treasurer submit a comprehensive report on both the capital and operating costs of this proposal and how it can be dealt with within the context of the five-year budget plan; and
(4) the Commissioner of Corporate Services report on the:
(a) negotiations of the lane closings, east of Bay Street; and
(b) details of the appraised values of the property and the lanes.
Background:
The Budget Committee on February 17, 1998 had before it a letter of transmittal (February 16, 1998) from the Corporate Services Committee advising that the Committee on February 16, 1998 recommended to the Budget Committee, and Council, the adoption of the report (January 29, 1998) from the Commissioner of Corporate Services regarding the acquisition for a multi-service community facility at 495 Sherbourne Street.
The following persons appeared before the Budget Committee in connection with this matter:
- Councillor Pam McConnell, Don River;
- Councillor Ron Moeser, Scarborough Highland Creek;
- Councillor Doug Holyday, Markland-Centennial; and
- Councillor Jack Layton, Don River.
CCCC
(Transmittal letter dated February 16, 1998, addressed to the
Budget Committee from
the Corporate Services Committee)
Recommendation:
The Corporate Services Committee on February 16, 1998, recommended to the Budget Committee, and Council, the adoption of the report (January 29, 1998) from the Commissioner of Corporate Services.
Background:
The Corporate Services Committee on February 16, 1998, had before it a report (January 29, 1998) from the Commissioner of Corporate Services recommending that:
(1) the acquisition of 495 Sherbourne Street from Ontario Realty Corporation (ORC) in the amount of $2.5 million be approved, subject to the terms and conditions as set out in this report;
(2) the City Solicitor, in consultation with the Director, Property Services (Toronto Region), prepare and have executed an Agreement of Purchase and Sale with ORC, incorporating a closing date in the first quarter of 1999 and the terms and conditions elaborated in the body of this report, other terms and conditions deemed necessary by the Commissioner of Corporate Services and prepared in a form satisfactory to the City Solicitor;
(3) the City Solicitor complete this real estate transaction and pay to ORC or to whomever may be entitled to receive it, the sum of $2.5 million and pay any expenses incurred for the closing of the real property transaction, including the payment of Land Transfer Tax and General Service Tax (GST) in the estimated amount of $221,500.00;
(4) the appropriate Civic Official be instructed to furnish the necessary legal description and prepare a survey suitable for the closing;
(5) the Commissioner of Corporate Services be instructed to continue to pursue all opportunities for additional amounts owed by the Province to the City which could be utilized to be set-off against the purchase price of 495 Sherbourne Street and that these opportunities be presented to City Council for approval; and
(6) the lands being acquired be placed under the jurisdiction of the Director, Property Services (Toronto Region), on closing, for property management/maintenance purposes, until such time as the lands are to be developed as a multi-service community facility and that the lands be operated on an interim basis as a parking lot with the revenue being utilized to offset the cost of acquisition.
Councillor Pam McConnell, Don River, appeared before the Corporate Services Committee in connection with the foregoing matter.
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(Report dated January 29, 1998, addressed to the
Corporate Services Committee from the
Commissioner of Corporate Services)
Purpose:
To have City Council approve the acquisition of the property municipally known as 495 Sherbourne Street with the closing to be in the first quarter of 1999. This proposed acquisition was approved in principle by the former City of Toronto Council on December 8, 1997.
Financial Implications:
Acquisition price of $2.5 million plus Land Transfer Tax, GST and related closing costs in the estimated amount of $221,500.00. A set-off of approximately $1.15 million from the East of Bay lane closings is to be applied against the purchase price with other set-off opportunities to be pursued up to closing and failing other opportunities being identified, the balance of the funds being provided in the 1999 Capital Budget.
Recommendations:
It is recommended that:
(1) the acquisition of 495 Sherbourne Street from Ontario Realty Corporation (ORC) in the amount of $2.5 million be approved, subject to the terms and conditions as set out in this report;
(2) the City Solicitor, in consultation with the Director, Property Services (Toronto Region), prepare and have executed an Agreement of Purchase and Sale with ORC, incorporating a closing date in the first quarter of 1999 and the terms and conditions elaborated in the body of this report, other terms and conditions deemed necessary by the Commissioner of Corporate Services and prepared in a form satisfactory to the City Solicitor;
(3) the City Solicitor complete this real estate transaction and pay to ORC or to whomever may be entitled to receive it, the sum of $2.5 million and pay any expenses incurred for the closing of the real property transaction, including the payment of Land Transfer Tax and GST in the estimated amount of $221,500.00;
(4) the appropriate Civic Official be instructed to furnish the necessary legal description and prepare a survey suitable for the closing;
(5) the Commissioner of Corporate Services be instructed to continue to pursue all opportunities for additional amounts owed by the Province to the City which could be utilized to be set-off against the purchase price of 495 Sherbourne Street and that these opportunities be presented to City Council for approval; and
(6) the lands being acquired be placed under the jurisdiction of the Director, Property Services (Toronto Region), on closing for property management/maintenance purposes, until such time the lands are to be developed as a multi-service community facility and that the lands be operated on an interim basis as a parking lot with the revenue being utilized to offset the cost of acquisition.
Background:
The former Toronto City Council, at its meeting held on December 8, 1997, endorsed in principle the acquisition of 495 Sherbourne Street and instructed the Commissioner, Corporate Services, to report back to the new City Council as early as possible in January, 1998 for approval to acquire 495 Sherbourne Street and secondly, that staff explore all financing options to acquire the property, including a set-off with the Province of Ontario for monies owed to the Municipality.
St. James Town is a community that has experienced a 23 percent increase in population over the past ten years, even though no new housing has been built. This increase has exacerbated the pressure on community services and facilities for area residents. In reaffirming the need for additional and improved community services and facilities in St. James Town, the former City Council had adopted a number of reports. On April 1, 1996, it approved a motion to indicate Municipal interest in 495 Sherbourne Street for the provision of community facilities and open space and a process to coordinate the St. James Town community needs assessment and the acquisition of 495 Sherbourne Street. On July 2, 1996, (Clause No. 26 of Report No. 11 of The Neighbourhoods Committee) it adopted a report from the Commissioner of Planning and Development as the St. James Town Community Services Strategic Plan. One recommendation in this report was that immediate discussion commence with the Province around the acquisition of 495 Sherbourne Street for community services purposes. On September 22, 1997, it approved the ASt. James Town 2000: A Community Action Plan@ (Clause No. 49 of Report No. 21 of The Executive Committee). The report recommended that the Commissioner, Corporate Services, re-initiate negotiations with the Province for the acquisition of Parcel E municipally known as 495 Sherbourne Street, located at the northeast corner of Sherbourne Street and Wellesley Street East, for the purpose of a multi-service community facility for St. James Town.
One of the key initiatives approved by the former Council is the establishment of a multi-service community facility which would serve as a focal point for the community offering a full range of services. The community facility would have an approximate size of 65,810 square feet and contain three main components - a recreation centre (50,090 square feet), a neighbourhood library (10,000 square feet) and a 52-space daycare centre (5,720 square feet). Other initiatives proposed in the Community Action Plan include: a Parks and Open Space Improvement Strategy to provide for improved parkland and open spaces within St. James Town; a Community Planning Review to look at planning mechanisms to restrict future residential development in the St. James Town area until sufficient community services and facilities are in place; together with a Building Conservation Strategy to preserve the high-rise rental stock in the area.
In order to implement the various initiatives contained within the Community Action Plan, the former Council has approved a capital works program of $11.313 million to build the multi-service community facility, including the recreation centre and daycare centre components as part of the 5-year capital budget submission for Community Services. As well, $60,000.00 will be included in the City=s 1998 Capital Budget to begin the feasibility study and design work for the new community facility. The former Council also approved $3,376,800.00 as part of the Toronto Public Library Board=s 1999 capital works projections for the construction of the library component of the facility. None of the approved funding for capital costs was allocated for land acquisition costs.
Establishment of the key initiatives was largely a result of resident input received through the St. James Town Community Facilities Working Group process. This Community Working Group was created to formulate and guide a revitalization strategy for St. James Town. The group has met six times in 1997 and will be meeting again in February 1998 with additional community members. Since the adoption of the St. James Town Community Service Strategic Plan, community interest respecting the initiatives has increased significantly. It appears that residents are feeling optimistic that improvements will finally be made in their community. As such, some partnerships between the City, residents, service agencies as well as property owners are now emerging as implementation of the community action plan is underway.
Comments:
After reviewing the St. James Town catchment area, City staff and Community Working Committees decided that 495 Sherbourne Street was the most suitable and only practical site for the proposed multi-service facility.
The site characteristics are as follows:
Location: Northeast corner of Sherbourne Street and Wellesley Street East
Site Area: 1.756 acres (76,491 sq.ft.) approximately
Zoning: R3 Z2 (42,315 sq. ft.)
R3 Z1 (34,176 sq. ft.)
Official Plan: High Density Residential Area
Legal Description: Parts 1, 2, 3, 4 and 5, Reference Plan 64R-14978, subject to a right-of-way
The site, shown in heavy outline on Map 1, is owned by the Province of Ontario under the jurisdiction of the Ontario Realty Corporation. It is presently used as a paved public parking lot to service the immediate area including the Wellesley Central Hospital facilities located at the northwest corner of Sherbourne Street and Wellesley Street East. There is also an old two-storey boarded-up brick house on the site that was previously used by the Princess Margaret Hospital.
Due to the Provincial Government=s reorganization of the health facilities in Ontario, the Wellesley Central Hospital, located on the opposite side of Sherbourne Street to 495 Sherbourne Street, is affected by the decision of the Health Services Restructuring Commission=s (HSRC) recommendation to transfer Wellesley Central Hospital=s programs and services to St. Michael=s Hospital. The hospital site will alternatively be used for an ambulatory care centre for AIDS/HIV services among others.
The Wellesley Central Hospital appealed the recommendations of the HSRC, but the Ontario Court has ruled in favour of the Commission. As a result, the hospital will eventually close, reducing the requirement for parking at 495 Sherbourne Street. Therefore, due to the City=s interest in the site and ORC=s polling results that showed little interest in the site at this time, ORC agreed to re-initiate negotiations with City staff respecting the sale of the site to the City.
Both ORC and City staff decided that negotiations for the sale of 495 Sherbourne Street would be contingent on having appraisal reports prepared by outside qualified appraisers in order to establish the current market value of the site. Upon analysis of the site=s development potential, both ORC and City staff have, in consultation with their respective appraisers, agreed that the fair and reasonable value of the property is $2.5 million on a clean site basis.
Terms and Conditions of Purchase:
City and ORC staff have agreed that the transaction is subject to the following basic terms and conditions:
Acquisition Price: $2.5 million payable on closing subject to usual real estate adjustments plus Land Transfer Tax and GST.
Environmental Testing: Standard ORC policy is to sell its properties on a clean basis. ORC staff have advised that they will be pursuing the preparation of a Phase 1 Environmental Study and, should the results of this study indicate potential contamination, a detailed Phase 2 Audit will be conducted. ORC will share these studies with City staff in order to ensure that the environmental condition of the site is known prior to closing.
Completion Date: ORC staff have advised that they are prepared to close this transaction in late 1998 or early 1999.
Leaseback Option: The City and ORC have agreed that, if necessary, the site will be leased back to ORC at market rent so that ORC can maintain the surface parking lot until the parking lot is no longer required by Wellesley Hospital or until June 30, 1999, whichever is earlier.
Possession Date: The City will receive vacant possession of the site either on closing or upon termination of the leaseback which will be no later than June 30, 1999.
Financing Options:
When City Council endorsed this acquisition on December 8, 1997, it requested staff to explore all financing options to acquire this site as soon as possible, including a set-off with the Province of Ontario for monies owed to the Municipality. Staff have explored the opportunities available and there are currently two situations where the Province will owe monies to the City.
The first is a lane closing transaction to facilitate the East of Bay Development on the east side of Bay Street between Wellesley Street West and Breadalbane Avenue. It is anticipated that this transaction will be completed in approximately three to four months and ORC staff have agreed that the compensation for these lanes which is currently estimated to be in the amount of approximately $1.15 million, together with interest at the rate of prime plus 1 percent from the closing of the lane conveyance to the closing of 495 Sherbourne Street, can be set-off against the acquisition cost of 495 Sherbourne Street.
The second situation is an ongoing legal action respecting compensation due the City as a result of the Provincial cancellation of the social housing program. This action is currently ongoing and Provincial staff are reluctant to agree to any set-off pending the resolution of this matter. It may also be that the compensation will be allocated for housing purposes.
It is imperative to ensure City ownership of this site as soon as possible, but possession of the site is not required until 1999. There currently appears to be only one opportunity to set-off funds to be received from the Province against this acquisition. However, during the balance of 1998 other opportunities including the resolution of the social housing action may be presented. Accordingly, the most prudent action would be to close this transaction in the first quarter of 1999 on a date to be mutually agreed by ORC and the Commissioner of Corporate Services. The Agreement of Purchase and Sale would include provisions to set-off the funds, including interest, flowing from the East of Bay lane closings and a further provision that additional set-offs be considered up to closing of the transaction as opportunities are presented. These opportunities would, of course, be presented to City Council for approval. Should no further satisfactory set-off opportunities be identified the balance of the funds required to acquire this property would be included in the 1999 Capital Budget submission.
Conclusion:
The former City of Toronto Council endorsed the acquisition of 495 Sherbourne Street which showed its commitment to establish a multi-service community facility in St. James Town to serve the needs of the St. James Town community.
The purchase price of 495 Sherbourne Street as set out in this report is considered fair and reasonable on the assumption that the lands are not impacted from an environmental perspective. There is no other suitable development site for the St. James Town multi-service community facility. Failure to acquire 495 Sherbourne Street will result in the loss of the only opportunity to solve St. James Town=s long standing community needs. Agreement to purchase the property should be finalized now, with provision for funding to be resolved prior to the 1999 Capital Budget submission.
Contact Name:
Peter Aziz, Telephone No. 392-1856, Fax No. 392-1880, E-Mail - paziz@city.toronto.on.ca (cs98002.wpd)
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Councillor Pam McConnell, Don River, appeared before the Corporate Services Committee in connection with the foregoing matter.
(Map 1 referred to in the foregoing report was forwarded to all Members of Council with the agenda of the Strategic Policies and Priorities Committee for its meeting on February 24, 1998, and a copy thereof is on file in the office of the City Clerk.)
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