Report to/Rapport au:

Corporate Services and Economic Development Committee/

Comité des services organisationnels et du développement économique

and Council/et au Conseil

10 October 2003/le 10 octobre 2003

Submitted by/Soumis par: Kent Kirkpatrick, General Manager/Directeur général,

Corporate Services Department/Services généraux

Contact/Personne ressource: D. H. McCaslin, Manager, Real Estate Services/

Gestionnaire, Services immobiliers

580-2424, ext. 22595, Douglas.McCaslin@ottawa.ca

Ref N°: ACS2003-CRS-RPR-0071

SUBJECT: OBJET:

SALE OF PROPERTY - FORMER GLOUCESTER CITY HALL - 1595 TELESAT COURT VENTE DE PROPRIÉTÉ - VENTE DE BIEN-FONDS – ANCIEN HÔTEL DE VILLE DE GLOUCESTER – 1595, COUR TELESAT

REPORT RECOMMENDATION

That the Corporate Services and Economic Development Committee recommend that, in accordance with the budgetary approval given by Council on 14 May 2003, Council approve the sale of the land and building described as being part of Lot 21, Concession 2, Ottawa Front, geographic Township of Gloucester, now City of Ottawa, known as the former Gloucester City Hall at 1595 Telesat Court, to MBNA Canada Properties Co., for the amount of $13,000,000 plus GST, subject to any easements that may be required and pursuant to an Agreement of Purchase and Sale that has been received.

RECOMMANDATION DU RAPPORT

Que, conformément à l’approbation de budget, le 14 mai 2003, accordée pour la vente par le Conseil municipal, le Comité des services organisationnels et du développement économique recommande au Conseil d’approuver la vente du terrain et de l’immeuble décrits comme étant une partie du lot 21, concession 2, orientés vers la rivière des Outaouais, canton géographique de Gloucester, maintenant la Ville d’Ottawa, connu comme étant l’ancien hôtel de ville de Gloucester, 1595, cour Telesat, à MBNA Canada Properties Co., pour la somme de 13 000 000 $, la TPS en sus, sous réserve de toute servitude pouvant être exigée et conformément à une convention d’achat et de vente qui a été reçue.

BACKGROUND

At its meeting of 14 May 2003 (Report ACS-2003-CRS-RPR-0040), Council approved the lease-option to purchase 100 Constellation Avenue and the disposal of four (4) properties to fund the fit ups and move costs as part of CAMP. Council further declared the four properties as surplus to City needs and authorized staff to market and sell these properties immediately following approval of the report by Council.

The land and building at 1595 Telesat Court, known as the former Gloucester City Hall was one of the four (4) properties.

The budgetary authority for the sale of 1595 Telesat Court is considered to be the authority provided by Council on 12 February 2003, (Report ACS-2003-CRS-RPR-0015, In-Camera) in approving the financial details of the project. The Report indicated that the PSC financial model required a minimum of $29.1M from the sale of the surplus properties to fund part of the project costs. The PSC analysis set out the value for 1595 Telesat Court at $12.5M.

In connection with sales of adjacent properties the former City of Gloucester gave MBNA Canada Properties Co. a first right of refusal to purchase the land and building at 1595 Telesat Court as well as other adjacent lands. Included in the transaction was the obligation that MBNA Canada Properties Co. would build a roadway in front of the Telesat building as part of the overall development of site. The acceptance of the offer herein, would facilitate the road construction adjacent to the building. Although MBNA has the right to match any acceptable offer within thirty (30) days of written notice, no other offer has been received and MBNA contacted the City to initiate negotiations.

With the approval of the herein recommendation, the City will have sold three (3) of the four (4) surplus properties.

DISCUSSION

The subject property consists of an 118,845 square foot Class "A" eight (8) storey office building located on a 5.61 acre parcel of land. The building provides a net rentable area of 110,636 square feet. The facility has approximately 35 indoor and 374 outdoor parking spots. The zoning of the property is CO (1.5) – Commercial General. The conveyance will be subject to any easements that may be required.

There are presently five (5) tenants leasing space in the building. The Provincial Offences Act (POA) courts also occupy the building. All tenants will be required to vacate and the POA courts will be relocated to new accommodations on or before 31 July 2004, which is the scheduled closing of this transaction.

All City employees presently occupying the facility will be relocated to either 100 Constellation Drive or other City facilities as contemplated by the CAMP report. The sale is on the basis of turning over a vacant building to the new owners on closing.

A For Sale sign was placed on the property on 15 May 2003, the day after Council approval. Fact sheets were distributed to any interested parties. The fact sheets included an asking price of $13,000,000. Several showings of the building were undertaken and expressions of interest were discussed with no offers being received.

MBNA wishes to proceed with its development of its “campus” and contacted the City to initiate negotiations rather than waiting to match offers based on its first right of refusal. MBNA's sole conditions were to be able to complete the transaction in a timely fashion and to have a vacant building on closing.

Negotiations ensued which resulted in an offer being received from MBNA Canada Properties Co. in the amount of $13,000,000.

Two (2) independent fee appraisal firms appraised the property and the offer is in accordance with the market values established by the reports.

The recommended offer is not conditional upon a rezoning of the property.

The offer has been reviewed and it is hereby recommended that Committee and Council approve the sale to MBNA Canada Properties Co. for the amount of $13,000,000.

ENVIRONMENTAL IMPLICATIONS

The Agreement of Purchase and Sale is conditional upon the parties undertaking satisfactory completion of environment and soil investigations.

FINANCIAL STATEMENT

This transaction represents revenue of $13,000,000 to the Corporation and will be credited to Internal Order 902625-509752 (CAMP fit-up and moves).

SUPPORTING DOCUMENTATION

A sketch showing the subject lands is shown attached as Annex "A".

DISPOSITION

Corporate Services Department

- Real Estate Services Division to finalize an Agreement of Purchase and Sale - Legal Services Branch to finalize this transaction.