Report to/Rapport au :
Corporate
Services and Economic Development Committee
Comité des services organisationnels et du
développement économique
and Council/et au Conseil
5 August 2003/le 5 aout 2003
Submitted by/Soumis par : Steve Kanellakos, A/City Manager/
Directeur des services municipaux intérimaire
City Manager’s Office, Bureau du directeur des
services municipaux
And
Jocelyne St. Jean, General Manager, People
Services Department /
Directrice générale, Services au citoyens
Contact/Personnes-ressource : Réjean Chartrand, Director, Strategic
Delivery Unit/Directeur, Unité d’exécution stratégique
580-2424,
Ext./poste 21696, Rejean.Chartrand@ottawa.ca
and
Colleen Hendrick, Director, Innovation, Development and Partnerships/
Directrice de l’Innovation, development et
partenariat,
724-4122,
Ext./poste 24366, Colleen.Hendrick@ottawa.ca
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Ref N°:
ACS2003-CMR-OCM-0009 |
SUBJECT: PUBLIC-PRIVATE PARTNERSHIP
(P3) PROJECT –
GARRY J. ARMSTRONG LONG-TERM CARE CENTRE
OBJET: PROJET DE PARTENARIAT PUBLIC-PRIVÉ (P3) –
CENTRE DE SOINS DE LONGUE DURÉE GARRY-J.-ARMSTRONG
REPORT RECOMMENDATIONS
That the Corporate Services and Economic Development Committee recommend Council:
1. Authorize staff to enter into negotiations with PCL Constructors Canada Inc., Central Park Lodges Ltd. and Retirement Residences Real Estate Investment Trust (REIT) for the construction of the new Garry J. Armstrong Long-Term Care Centre and the redevelopment of the existing Allan House on Porter Island; and
2. Direct staff to report to Council on the outcome of the negotiations in September 2003.
Que le Comité des services organisationnels et du développement économique
recommande au Conseil municipal :
1. d’autoriser le
personnel à entreprendre les négociations avec PCL Constructors Canada Inc.,
Central Park Lodges Ltd. et Retirement Residences Real Estate Investment Trust
(REIT) pour la construction du nouveau Centre de soins de longue durée
Garry-J.-Armstrong et le réaménagement de la Maison Allan située sur l’île
Porter;
2. de demander au
personnel de fournir au Conseil municipal un compte rendu des résultats des
négociations en septembre 2003.
The project to build a new Garry J. Armstrong Long-Term Care Centre and redevelop Allan House on Porter Island was one of four projects approved by Council in October 2002 for priority implementation under a public-private partnership. This construction is the second and final phase of a multi-year replacement plan for the 36-year old structures (Bradford House and Allan House), which comprised Island Lodge. This major capital development provides a modern environment in which to deliver quality care and services to people who can no longer live independently.
In phase one, residents were relocated to the newly built Peter D. Clark Long-Term Care Centre and existing Allan House. The second and final phase is the construction of a new 180-bed Garry J. Armstrong Long-Term Care Centre on the location previously occupied by the now demolished Bradford House. The 165 residents currently living in Allan House will move to the new facility. This move will render Allan House surplus to City needs providing an opportunity for redevelopment by the private sector.
A Request for Qualifications (RFQ) was issued on 3 February 2003 by the Supply Management Division, advertised on Merx and at the Ottawa Construction Association. The RFQ closed on 6 March 2003 and qualification submissions were received from the following companies, which are listed in alphabetical order:
All firms qualified to be short-listed and were approved by City Council in April 2003 to proceed to the Request for Proposal (RFP) stage of the process.
The RFP was issued by the Supply Management Division and distributed via e-mail to these firms on 8 May 2003. Three firms submitted proposals by the closing date of 3 July 2003. Prior to that date, Doran Contractors Ltd. advised the City that due to their receipt of another significant contract, they would not be able to assign the necessary resources to make this project successful and therefore would not be submitting a proposal.
This report recommends advancing to the next step in the P3 process, the commencement of negotiations with a preferred respondent.
DISCUSSION
Detailed proposals were received from the three firms. The following is a brief overview of each proposal.
This group proposed to retrofit Allan House into a 111-unit retirement residence with a combination of studio and one-bedroom suites. This combination would allow them to offer accommodation and services to the widest variety of potential residents. Within a framework of “Aging in Place”, they would offer a bundle of services with the option to purchase additional services as needed. The bundle of services incorporated within the monthly rate would include: residential care, flexible meal plans, housekeeping and laundry services, maintenance services and recreational programming including a private bus service for organized outings. Amenities would include a lounge, library, chapel, exercise room, beauty parlor and tuck shop.
The assessment of these proponents was that renovating the existing structure would not allow them to develop the size of units necessary for a successful business plan and therefore they propose to demolish the existing Allan House and construct a new facility. The new building would be of a similar scale to the existing building and would meet all zoning requirements.
The proposed concept would offer approximately 150 seniors residences. These accommodations will be designed for seniors who can live independently but may need to avail themselves of services such as laundry, meals, cleaning, daily assistance and nursing supervision. The units would be one bedroom, two bedroom and studio suites, each with their own three-piece washroom and kitchenette. A variety of recreational and social spaces would be provided including a swimming pool, theatre and exercise area.
3. The Windmill Development Group Ltd. (with Diversicare Canada Management Services Co., Inc.)
This group proposed the retrofit of Allan House as an excellent opportunity to renew and reuse an existing structure. The revitalized 7-story structure with 116 units of private retirement residence would offer the independent senior a supportive environment. The proposal would convert the existing seventh floor into living space by moving the mechanical and laundry areas to the main floor and basement. A number of recreation and health support services would be offered to residents.
The retrofit of Allan House was seen as an opportunity to turn the building into a model green development, lowering the impact on the environment. This retrofit would achieve a minimum of a LEED (Leadership in Energy and Environmental Design) Silver rating.
In the RFP stage, firms had to meet the mandatory requirements and were then evaluated on both their financial proposal and redevelopment concept for Allan House. The process was led by Supply Management Division. The RFP contained the evaluation criteria so that the firms were aware of the approach being taken. A Fairness Commissioner was retained to oversee the entire process including the opening of the financial proposals. The evaluation team included representatives from the People Services Department, RPAM, the Strategic Delivery Unit and an external representative.
The evaluation team reviewed all proposals received and scored the proposals in relation to the criteria, selecting the preferred respondent based on the best value to the City. Best value was determined by the respondent having met all the mandatory criteria and achieving the highest point total out of the available 100 points.
Selection of a preferred partner does not automatically imply that negotiations will be successful; there are elements that must be addressed with the respondent. The City needs to conduct a due diligence process and verify the information and assumptions made by the respondent.
Topics for discussion include value-engineering opportunities for the new construction and with respect to the redevelopment of Allan House, specific details of the concept, details of the land lease and potential for exchange or purchase of services. Negotiations will focus on achieving the best value for the City within an acceptable risk structure and a win-win partnership.
The evaluation team recommends that PCL and its partners be selected as the preferred respondent and that staff be authorized to initiate negotiations to develop a partnership agreement related to the construction of the Garry J. Armstrong Long-Term Care Centre and the development of a new seniors residence on the site of the current Allan House.
All work to be completed will meet current environmental regulations and Rideau Valley Conservation Authority recommendations.
Open houses presenting the new design for the Garry J. Armstrong Long-Term Care Centre were held in the Spring of 2003. As directed by Council, a public meeting will be held during the negotiations process with the private sector partner and prior to the execution of a P3 partnership agreement.
FINANCIAL IMPLICATIONS
There is
approximately $8.6M in unspent authority in the Capital Program Order No.
900129, with a request for an additional $13M in debt authority identified for
2004 in the five-year capital budget presented this year. A successful execution of a partnership
agreement may require a pre-commitment of the 2004 debt authority for this
project. If necessary, this will be included as a recommendation in a future
report to Council.
None.
The Strategic Delivery Unit and People Services Department will implement the recommendation as directed by Council.