Report to/Rapport au :
Corporate Services and Economic
Development Committee
Comité des services organisationnels
et du développement économique
and Council/et au Conseil
4 July 2002/le 4 juillet 2002
Submitted by/Soumis par : Kent Kirkpatrick, General Manager/Directeur général,
Corporate Services
Department/Services généraux
Contact/Personne ressource : L.J.
Nalezinski, A/Manager, Real Estate Services
A/Gestionnaire, Services immobiliers
580-2424, ext. 21549,
Les.Nalezinski@ottawa.ca
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Ref N°:
ACS2002-CRS-RPR-0067 |
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SUBJECT: OBJET : |
LEASE OF LAND – CLENNING STREET – NEPEAN HOUSING
CORPORATION LOCATION DE TERRAIN – RUE CLENNING – NEPEAN HOUSING CORPORATION
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REPORT RECOMMENDATIONS
That the Corporate Services and Economic Development Committee recommend Council:
1. Declare a 1787 m2 parcel of vacant land located on Clenning Street, described as Part of Lot 18, Concession 2, (Rideau Front), geographic Township of Nepean, City of Ottawa, formerly City of Nepean, and shown on Annex “A”, as surplus to City requirements in accordance with Section 193 of the Municipal Act;
2. Approve a 30-year lease of the land, estimated to have a market value of $165,000.00 and referred to in Recommendation 1, to Nepean Housing Corporation, for the amount of $1.00 per year, subject to suitable terms and conditions being agreed upon by the City’s Housing Branch and Nepean Housing Corporation.
RECOMMANDATIONS DU
RAPPORT
Que le Comité des services organisationnels et
du développement économique recommande au Conseil :
1. de déclarer excédentaire par rapport aux
besoins de la Ville, conformément à l’article 193 de la Loi sur les municipalités, un terrain vacant d’une superficie de
1787 m2 situé sur la rue Clenning, décrit comme une partie du lot
18, concession 2 (façade Rideau), canton géographique de Nepean, ville
d’Ottawa, anciennement ville de Nepean, et illustré à l’annexe « A »;
2. d’approuver la location pour 30 ans du
terrain décrit à la recommandation 1, qui possède une valeur marchande
estimative de 165 000 $, à la Nepean Housing Corporation pour la
somme de 1 $ par année, à la condition que la Direction du logement de la
Ville et la Nepean Housing Corporation conviennent de modalités appropriées.
BACKGROUND
In October of 1999, the
Council of the former City of Nepean approved the transfer of five acres of
land to Nepean Housing for the purpose of constructing new affordable
housing. Four acres of the land were
used for the development and construction of 76 units of housing, and one acre
was reserved for future development.
The City of Ottawa and the former Region granted capital dollars
($760,000) to Nepean Housing to facilitate this housing development that is
built and almost fully occupied. Rents
for these units are a mixture of average market rent and rent geared to income
(RGI), with 10 of the units designated for victims of abuse and four designated
for a supported housing provider.
Due to favourable interest
rates, a grant from the former Nepean Reserve Fund and efficient use of
existing financing, Nepean Housing has been able to retain sufficient capital
to help finance the construction of an additional 32-34 units of affordable
housing (one and two bedrooms) adjacent to the most recently completed
project. Of the reserved acre in its
possession, 0.25 acres has been used for Nepean Housing’s new office location,
leaving 0.75 acres clear for additional development.
In order to build these
units, however, they require 1.15 acres of land that is 0.4 acres more than
they own. The City owns property
directly adjacent to the 0.75 acre Nepean Housing remnant, and by using a
0.4-acre parcel of this City land; Nepean Housing could undertake the
construction of 32-34 affordable housing units.
DISCUSSION
Given the critical need for affordable housing, the Housing Branch is working with housing providers to facilitate the development of new affordable housing units. To this end, Nepean Housing has approached the City regarding the subject land, and has requested the use of a 0.4-acre parcel to enable them to create 32-34 new units. The objective is to build affordable housing units, all of which will rent at Canada Mortgage and Housing Corporation (CMHC) average market rent or below, including a component with rents that are geared to lower income households.
Nepean Housing is bringing forward significant resources for project development, namely:
· A grant from the Nepean Reserve Fund, recently approved by Council;
· Residual financing, to be rolled over from the most recent project; and
· Retained land of 0.75 acres, rolled over from the most recent project
While these resources are of assistance, the project will only be viable with affordable rents if Nepean Housing is able to secure the 0.4-acre parcel of land at a nominal cost.
Staff have reviewed the request and have determined that using a lease option would be the most effective vehicle for enabling Nepean Housing to proceed with this development, while ensuring the longer term affordability goals of the City are met. CMHC will be insuring the mortgage financing, and requires a minimum lease term of 30 years. Since Section 193 of the Municipal Act deems any lease of property involving a term in excess of 21 years to be a disposal, it will be necessary for Council to declare the land surplus.
Earlier this year, Council adopted a Real Property Disposal By-law (2002-38) and related disposal policies that recognize affordable housing as a City-mandated program. These policies also afford the Housing Branch the opportunity to make surplus land available to non-profit and cooperative housing providers for this purpose. In this instance, the policies also give Council the opportunity to approve a grant to a housing provider to offset the acquisition costs or to opt for a long-term lease.
The Housing Branch
supports the use of this 0.4-acre parcel to facilitate the construction of much
needed affordable housing. By
contributing this small parcel of City land to the proposed project, Council
would be leveraging significant community resources to produce affordable
housing that will be available to moderate and low-income households for 30
years. Council will also be supporting
the mandate for the Nepean Reserve Fund, which included commitment of a portion
of the funds for new affordable housing development.
Based on an independent
external appraisal, the market value of the subject 0.4-acre parcel has been
estimated at $165,000. Staff is
recommending the lease to Nepean Housing at $1.00 per year, as the project will
only be viable if it is able to secure the subject at nominal cost.
PUBLIC NOTIFICATION / CONSULTATION
In accordance with policies approved by City Council on 14 November 2001, the availability of the property was circulated to all client City Departments, including the Housing Branch, to determine if it should be retained for a City mandated program. No City Department expressed interest in retaining the property for program purposes. Local governments and external agencies were also circulated, but none expressed interest in acquiring the property.
Upon a request initiated by Nepean Housing, consultation with the Housing Branch was held. It was concluded that the Housing Branch supported the approval of a long-term lease to Nepean Housing, as it would support the City’s goal of increasing affordable housing in the community. The anticipated use, multi-unit residential, would not conflict with the surrounding established uses, and conforms to current zoning.
The Ward Councillor has been made aware of the proposal, and has indicated approval of the lease to Nepean Housing Corporation.
FINANCIAL IMPLICATIONS
The lease of this property will result in revenue to the City in the amount of $1.00 per year. This revenue will be credited to Profit Centre 119909-407217.
ATTACHMENTS
Attached as Annex "A" is a sketch showing the land to be leased.
DISPOSITION
People Services Department - Housing Branch to negotiate the terms of lease.
Corporate Services Department - Real Estate Services Branch to execute Lease
Agreement.
- Legal Services Branch to finalize this transaction.
ANNEX A
