1. PROPERTY
ACQUISITION – 110 IBER ROAD – HOOPP REALTY INC. Acquisition de propriété – 110, chemin iber – Hoopp
Realty Inc. |
Committee Recommendation
That
Council approve the fee simple
acquisition of 2.22 ha (5.47 acres) parcel of industrial land improved with a
60,000 ft2 industrial building owned by HOOPP Realty Inc.,
municipally known as 110 Iber Road and shown as Parcel 1 on the attached
Document “1”, for the consideration of $5,200,000 plus applicable HST and
subject to final survey and adjustments on closing.
Que le Conseil approuve l’acquisition en fief simple d’une parcelle de
2,22 ha (5,47 acres) d’un terrain industriel doté d’un édifice industriel de
60 000 pieds carrés appartenant à HOOPP Realty Inc., dont l’adresse
municipale est le 110, chemin Iber, et présenté comme la parcelle 1 sur le
document 1 ci-joint, pour un montant de 5 200 000 $, TVH en sus,
sous réserve de levé final et de rectifications à la signature.
Documentation
1. Transportation Committee report dated
26 January 2011 (ACS2011-CMR-REP-0011).
and Council / et au
Conseil
26 January 2011 / le 26 janvier 2011
Submitted by/Soumis par : Kent
Kirkpatrick, City Manager/directeur municipal
Contact Person/Personne-ressource: Robin Souchen, Manager, Realty
Services Branch,
Real Estate Partnerships and Development Office/gestionnaire, Direction
des services immobiliers, Bureau de partenaires immobiliers et du
Développement
613-580-2424, ext./poste 21549, Robin.Souchen@ottawa.ca
SUBJECT:
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OBJET :
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Acquisition de propriété – 110, chemin
iber – Hoopp Realty Inc. |
That the Transportation Committee recommend Council approve the fee
simple acquisition of 2.22 ha (5.47 acres) parcel of industrial land improved
with a 60,000 ft2 industrial building owned by HOOPP Realty Inc.,
municipally known as 110 Iber Road and shown as Parcel 1 on the attached
Document “1”, for the consideration of $5,200,000 plus applicable HST and
subject to final survey and adjustments on closing.
Que le Comité des
transports recommande au Conseil d’approuver l’acquisition en fief simple
d’une parcelle de 2,22 ha (5,47 acres) d’un terrain industriel doté d’un
édifice industriel de 60 000 pieds carrés appartenant à HOOPP Realty Inc.,
dont l’adresse municipale est le 110, chemin Iber, et présenté comme la
parcelle 1 sur le document 1 ci-joint, pour un montant de 5 200 000 $,
TVH en sus, sous réserve de levé final et de rectifications à la signature.
In June of 2006, the Public Works Department’s
(PWD) works yard at 1635 Maple Grove Road (former City of Kanata yard) was
destroyed by fire. The facility was
confirmed as a total loss and reconstruction was not identified as a viable
option.
PWD Surface Operations Branch and Fleet
Services Branch (Automotive and General Stores) reached consensus on the
interim joint use of the service bays at the adjacent 1655 Maple Grove works
yard site and some additional fit-up was required to meet the unplanned need
for temporary co-location and the compression of personnel and program onto the
remaining 1655 Maple Grove Road works yard site.
Further to issues associated with the imposed
co-location at 1655 Maple Grove, temporary lease solutions were identified,
approved and put in place at two
locations in Stittsville, specifically; 125 Walgreen Road and 5977 Hazeldean
Road. The intent was to eventually
redevelop portions of 1655 Maple Grove in order to expand the facilities, to
address the capacity lost in the 1635 Maple Grove fire and to provide
sufficient expansion capacity for a permanent campus solution at the Maple
Grove site.
On 20 November 2007, Council approved report
“ACS2007-BTS-RPM-0006 – Maple Grove Works Operation within Kanata West Concept
Plan”. Council approved the
consolidation of PWD operations onto a 6.43 ha (15.9 acres) portion of the site
at Maple Grove.
All future expansion capacity at 1655 Maple Grove Road, including the growth needs of Forestry Services, Fleet (Automotive and General Stores) and Surface Operations Branches was delayed in February 2008 as a result of modeling errors associated with the Carp River Environmental Assessment (EA) project. In May 2009, City Council approved the Third Party Review for Kanata West which allowed development applications outside of the floodplain and not impacted by the dispute environmental assessments to proceed based on stringent criteria specified in the Third Party Review. In November 2009 the City was notified by the Minister of Environment that the requirements of the 2008 Minister’s Order had been satisfied and the City and Kanata West Ownership Group (KWOG) could proceed to finalize and repost the disputed Environmental Assessments. Notice of completion of the EAs was filed in July 2010, and 88 new Part II Order requests were received. The City’s response to the Part II Order requests on the Kanata West EAs has been provided to the Ministry of the Environment and the City awaits a response from the Ministry.
Sanitary service for the Maple
Grove Facility requires construction of the ultimate Kanata West Pump Station
(2016) or on an interim basis, an upgrade to the Hazeldean Pump Station (timing
unknown) which is currently undergoing a separate Environmental Assessment process.
The permanent stormwater management pond that would serve the Maple Grove
facility is also delayed due to the Part II Order requests on the Carp River
project. A development restriction to those lands, identified in the Kanata
West Concept Plan, has resulted in a four to five year delay of development. As
a consequence, the consolidation of PWD operations on the Maple Grove site has
been delayed four to five years until services can be provided to the site. Due to the delays in the
implementation of the consolidation plan, other real estate solutions were
explored in consultation with PWD.
In December 2010, the opportunity to purchase an
industrial facility at 110 Iber Road was identified. The subject site is shown as Parcel 1 on the
attached Document “1”.
It contains an area of approximately 2.21 ha
(5.47 acres) with a frontage of 131.76 metres (432 ft) along Iber Road within
the Ottawa - Goulbourn Business Park. The
site is designated Employment Area in the City’s Official Plan and zoned (IL)
Light Industrial in the City’s Zoning By-Law.
The site is improved with a 5,574 m2
(60,000 ft2) one storey industrial building that was built in
1989. The building has a 27 foot ceiling
clearance, 10 access doors and 125 surface parking stalls. Interior improvements include approximately
650 m2 (7,000 ft2) of office space and two storage
mezzanines.
PWD developed an adaptive refit plan to provide
a long-term consolidation solution at this location. In addition, the timing of this plan coincides
with the lease termination dates of the Walgreen Road facility (February 2012)
and the Hazeldean Road facility (April 2012).
The acquisition will allow PWD to:
i.
collapse
the current leases at Hazeldean and Walgreen Road;
ii.
address
the near-term growth capacity identified by PWD for Forestry, Fleet and Parks,
Buildings, Grounds, Operations and Maintenance;
iii.
compress
the current Maple Grove site to a maximum (total) of 10 acres, retaining only
the roads operations at that site;
iv.
liberate
six (6) acres of the overall Maple Grove site for future development;
v.
reconfigure
the remaining Maple Grove site with a new salt dome and two general purpose
storage buildings to meet operational requirements.
The purchase of Iber Road will enable the consolidation of operations two to three years earlier than anticipated and will achieve capital financial savings to the City of Ottawa as outlined in the Discussion section of the report. The operating costs for the lease accommodation at the Hazeldean and Walgreen facilities will be applied to Iber Road. It is anticipated that there will be a minor annual operational savings once the consolidation is completed.
Critical to the rationale for this acquisition
is an estimated budget savings of $2.55M. This is accomplished through the reconfiguration
of 110 Iber Road to meet the functional requirements of PWD. In addition, six acres at a value of $1.5M can
be added to the City’s future development site in the Kanata West Concept
Plan. The chart below identifies the
cost and savings anticipated in a consolidation at the 110 Iber Road site
relative to the original Maple Grove solution.
ITEM |
AMOUNT |
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FUNDING ENVELOPE FOR MAPLE GROVE SOLUTION |
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MAPLE GROVE
REPLACEMENT CURRENT AUTHORITY |
$11,507,340.00 |
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MAPLE GROVE
2011 BUDGET ASK |
$1,760,000.00 |
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2011 BUDGET
ASK MAPLE GROVE GARAGE GROWTH |
$875,000.00 |
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2011 BUDGET
ASK WINTER MATERIAL STORAGE FACILITY GROWTH |
$250,000.00 |
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TOTAL BUDGET |
$14,392,340.00 |
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PROJECTED COST FOR IBER ROAD SOLUTION |
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PROPERTY
PURCHASE PRICE |
$5,200,000.00 |
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ESTIMATED
OPERATING COSTS FOR YEAR 1 |
$240,000.00 |
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DUE DILIGENCE
AND CLOSING COSTS |
$120,000.00 |
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ADAPTIVE
RETROFIT PLAN |
$5,200,000.00 |
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DESIGN FEES/NON
RECOVERABLE HST/CONTINGENCY |
$830,000.00 |
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LIFE CYCLE
RENEWAL |
$250,000.00 |
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TOTAL BUDGET
(DESIGN BUILD PROJECT DELIVERY) |
$11,840,000.00 |
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PROJECT COST COMPARISON |
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TOTAL BUDGET
MAPLE GROVE SOLUTION $14,392,340.00 TOTAL BUDGET
IBER ROAD SOLUTION (-) $11,840,000.00 PROJECT
BUDGET SAVINGS (2011) $ 2,552,340.00 |
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6 ACRES
DEVELOPMENT LAND AT MAPLE GROVE (+) $1,500,000.00 |
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TOTAL SAVINGS
/ POTENTIAL REVENUE
$4,052,340.00 |
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At the request of PWD,
negotiations with the property owner were undertaken to acquire the property.
Negotiations related to the purchase and sale of the subject property
were supported by an independent appraisal and an internal appraisal completed
for the City in order to provide an estimate of market value for the subject
property. The respective appraisals
concluded that the current industrial use is the highest and best use of the
property. In final reconciliation, negotiations have resulted in an agreement
being reached at the consideration of $5,200,000 for the fee simple interest in
this property.
The ensuing purchase and sale agreement is conditional on the City being satisfied with a building condition audit. In addition, the agreement is conditional on receiving approval of a zoning amendment that is required in order to add the “Storage Yard” use within the current zone. The Vendor has agreed to cooperate with the City to proceed with an application for this amendment. Should the proposed zoning amendment for 110 Iber Road not be secured, the City will explore other options to accommodate PWD within the requirements of the current budget envelope.
In addition to the benefits of this acquisition,
it should be noted that the future disposition of the surplus land at Maple
Grove site will require the relocation of the existing Snow Disposal Facility
(SDF) to an alternate location. Staff are in the process of securing
a site for the development of a new SDF, utilizing separate funding from the Maple Grove SDF Relocation Land &
Construction account. A report
to Committee and Council is anticipated in the 2nd quarter of 2011
detailing this acquisition.
The acquisition of the subject property is conditional on the City being satisfied, at its sole discretion, with the condition of the lands, as required.
RURAL IMPLICATIONS
N/A
As this is an internal departmental administrative matter no public consultation is required.
Ward 6 Councillor Shad Qadri has received a copy of this report and is in support of this recommendation.
There are no Legal/Risk Management impediments to the implementation of the recommendations of this report.
CITY STRATEGIC PLAN
N/A
TECHNICAL IMPLICATIONS
N/A
With
the approval of the recommendation in the report funds are available in capital
project Maple Grove Facility Replacement and Expansion for the acquisition of
110 Iber Road.
Included
in the Draft 2011 Capital Budget are authority requests for the Maple Grove Facility
Replacement & Expansion and Maple Grove Garage Growth. With approval of this
report the authority request for the Facility Replacement & Expansion can
be reduced by $1.675M to $85,000 and the authority for the Garage Growth of
$875,000 eliminated for a total reduction of $2.55M.
Sufficient
funds exist in the 2011 operating budget to accommodate the operating cost of
the new Iber Road facility.
Document 1 – Property Sketch – 110 Iber Road,
Stittsville
Following Council’s approval, Real Estate Partnerships and Development Office and Legal Services Branch will finalize this transaction.
Document “1”