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.

 

 

Recommandation du comité

 

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).

 


Report to/Rapport au :

 

Transportation Committee

Comité des transports

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

Stittsville (6)

Ref N°: ACS2011-CMR-REP-0011

 

 

SUBJECT:

PROPERTY ACQUISITION – 110 IBER ROAD – HOOPP REALTY INC.

 

 

OBJET :

Acquisition de propriété – 110, chemin iber – Hoopp Realty Inc.

 

REPORT RECOMMENDATION

 

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.

 

RECOMMANDATION DU RAPPORT

 

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.

 

BACKGROUND

 

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.

 

DISCUSSION

 

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

FUNDING ENVELOPE FOR MAPLE GROVE SOLUTION

MAPLE GROVE REPLACEMENT CURRENT AUTHORITY

$11,507,340.00

MAPLE GROVE 2011 BUDGET ASK

$1,760,000.00

2011 BUDGET ASK MAPLE GROVE GARAGE GROWTH

$875,000.00

2011 BUDGET ASK WINTER MATERIAL STORAGE FACILITY GROWTH

$250,000.00

TOTAL BUDGET

$14,392,340.00

 

PROJECTED COST FOR IBER ROAD SOLUTION

PROPERTY PURCHASE PRICE

$5,200,000.00

ESTIMATED OPERATING COSTS FOR YEAR 1

$240,000.00

DUE DILIGENCE AND CLOSING COSTS

$120,000.00

ADAPTIVE RETROFIT PLAN

$5,200,000.00

DESIGN FEES/NON RECOVERABLE HST/CONTINGENCY

$830,000.00

LIFE CYCLE RENEWAL

$250,000.00

TOTAL BUDGET (DESIGN BUILD PROJECT DELIVERY)

$11,840,000.00


PROJECT COST COMPARISON

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

 

 

 

6 ACRES DEVELOPMENT LAND AT MAPLE GROVE                  (+) $1,500,000.00

 

TOTAL SAVINGS / POTENTIAL REVENUE                                         $4,052,340.00

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.

 

ENVIRONMENTAL IMPLICATIONS

 

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

 

CONSULTATION

 

As this is an internal departmental administrative matter no public consultation is required.

 

COMMENTS BY THE WARD COUNCILLOR(S)

 

Ward 6 Councillor Shad Qadri has received a copy of this report and is in support of this recommendation.

 

LEGAL/RISK MANAGEMENT IMPLICATIONS

 

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

 

FINANCIAL IMPLICATIONS

 

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.

 

 

SUPPORTING DOCUMENTATION

 

Document 1 – Property Sketch – 110 Iber Road, Stittsville

 

DISPOSITION

 

Following Council’s approval, Real Estate Partnerships and Development Office and Legal Services Branch will finalize this transaction.


Document “1”