Report to/Rapport au :
Corporate Services and Economic Development
Committee
Comité des services organisationnels et du développement économique
and Council / et au Conseil
24 June 2008 / le 24 juin 2008
Submitted by/Soumis par : Stephen A. Finnamore, Executive Director, Business
Transformation Services / Directeur exécutif, Services de transformation des
activités
Contact Person/Personne ressource : Gordon MacNair, Manager, Real Estate
Services
Real
Property Asset Management/Gestion des actifs des biens immobiliers
(613)
580-2424 x 21217, Gordon.MacNair@Ottawa.ca
|
|
Ref
N°:
ACS2008-BTS-RPM-0028
|
SUBJECT:
|
Sale of Land – 324-328 Tulip
Crescent
|
|
|
|
OBJET :
|
VENTE DE TERRAIN - 324-328,
CROISSANT Tulip
|
REPORT RECOMMENDATIONS
That the Corporate Services
and Economic Development Committee recommend Council:
1.
Declare a parcel of vacant land situated at 324 to 328
Tulip Crescent, shown as Parcels A and B on the attached Annex “A”, containing
an area of approximately 2951 m2, and described as Block 12 on Plan
M-85, and Lots 97 and 98 on Plan M-15, City of Ottawa, as surplus to the City’s
needs;
2.
Waive City policy pertaining to the sale of property at
market value and approve the sale of the land, estimated to have a market value
of $340,000.00, and referred to in Recommendation 1, to Habitat for Humanity
National Capital Region, for the amount of $50,000.00, subject to any easements
that may be required, subject to the provision of the right to first refusal to
recover the property in the event of sale, and subject to the provisions of the
negotiated Municipal Housing Facilities Agreement, pursuant to the Municipal
Housing Facilities By-law (2006-1) and provisions of this report;
3.
Direct staff to negotiate a Municipal Housing Project
Facilities Agreement with Habitat for Humanity National Capital Region, to
allow for and secure the deferral of development charges in the amount
totalling $38,282.00, associated with the proposed construction of two single
detached homes and subject to the provisions of the Municipal Housing
Facilities By-law (2006-1); and
4.
Authorize the Manager of Corporate Development and
Environmental Law Division, upon successful negotiation of the Municipal
Housing Project Facilities Agreement with the proponent, to proceed directly to
Council to authorize the project specific Municipal Housing Project Facilities
by-law, by way of placing the by-law on the Order of the Day for enactment,
within the limits set by the negotiated agreement, the recommendations in this
report, and the Municipal Housing Project Facilities By-law (2006-1).
RECOMMANDATIONS DU
RAPPORT
Que le Comité des services organisationnels et du développement
économique recommande au Conseil :
1. de
déclarer qu’une parcelle de terrain vacant située du 324 au 328, croissant
Tulip, appelée parcelles A et B dans l’annexe A ci‑jointe,
d’une superficie approximative de 2 951 m2, et appelée
pâté 12 sur le plan M‑85, et lots 97 et 98 sur le plan M‑15,
de la Ville d’Ottawa, est excédentaire pour ce qui est des besoins de la Ville;
2.
de renoncer à appliquer la
politique relative à la vente des propriétés à la valeur marchande de la Ville
et d’approuver la vente du terrain dont il est question à la
recommandation 1, dont la valeur marchande est estimée à
340 000 $, à Habitat pour l'humanité-region de la Capitale Nationale,
contre 50 000 $, sous réserve des servitudes qui peuvent être
nécessaires, sous réserve de l’obtention du droit de premier refus pour
reprendre la propriété en cas de vente, et sous réserve des dispositions de l’entente
négociée à propos des logements municipaux, conformément au Règlement municipal
2006‑1 sur les ensembles de logements municipaux et aux dispositions du
présent rapport;
3.
de demander au personnel de
négocier avec Habitat à Habitat pour l'humanité-region de la Capitale Nationale
une entente sur un projet de logements municipaux afin de permettre le report
des redevances d’aménagement, au montant total de 38 282 $, associées
à la construction de deux maisons unifamiliales, sous réserve des dispositions
du Règlement municipal 2006‑1 sur les ensembles de logements municipaux;
et
4.
d’autoriser
le gestionnaire de la Division du droit environnemental, du développement et
des sociétés à s’adresser directement au Conseil, à la conclusion des
négociations sur l’entente relative au projet de logements municipaux avec le
promoteur, pour autoriser le règlement particulier au projet d’ensembles de
logements municipaux en inscrivant le règlement à l’ordre du jour en vue de son
adoption, dans les limites établies par l’entente négociée, les recommandations
du présent rapport et le Règlement municipal 2006‑1 sur les ensembles de
logements municipaux.
BACKGROUND
The Housing First policy, adopted
by Council in 2005, established that the City’s interest in increasing the availability
of affordable housing be in part supported by provisions for the disposal of
surplus City-owned land and the development of City-owned properties.
The Housing First Policy makes
suitable City-owned sites, as identified by the Housing Branch, available to
the community for the provision of long-term affordable housing. When suitable sites become available through
the land disposal process, the Housing Branch notifies developers interested in
building affordable housing for low-income households.
The land under consideration consists of two vacant
building lots, which were acquired by the former Township of Cumberland in the
1980’s in exchange for relieving Campeau Corporation of certain subdivision
agreement obligations. These lots are
situated on Tulip Crescent in the Chatelaine Village community of Orléans,
which is located in the northwest corner of Tenth Line Road and Highway 174, in
the former City of Cumberland. Municipally identified as 324-328 Tulip
Crescent, these lots contain a total area of 2951m2. They have access to full municipal services,
and are zoned to accommodate residential development (R1F-Residential Detached
Single Dwelling). As a result of these
factors, 324-328 Tulip Crescent has been identified as a site that is suitable
for affordable housing, under the Housing First Policy.
The availability of the Tulip properties was posted on
the Housing Branch website for 90 days in the spring of 2007. Two organizations indicated an interest in
acquiring and developing the land at 324-328 Tulip Crescent. Following preliminary discussions, the
Housing Branch provided applications, comparable to the Action Ottawa Request
for Proposals, to each of the organizations so that they could submit formal
proposals for review by staff. Review
includes assessment of the suitability of the proposed project under the
Housing First Policy, expected timeliness of development of the site, and
assessment of the public return on investment in terms of the affordability or
related public policy amenities achieved by the proposal. Habitat for Humanity National Capital
Region, the successful proponent, submitted a proposal to purchase each lot
from the City for $25,000.00 and to build a minimum of two and up to three
single detached homes, depending on the resolution of easements and planning
requirements for a pathway.
The Official Plan directs the
City to make land available for affordable housing and to give priority for the
sale or lease of surplus City-owned property for affordable housing. Policy 2.5.2.6 of the Official Plan, states
that “In accordance with the City’s surplus Real Property Disposal Policy, all
land that is surplus to the City’s needs and suitable for residential
development, be given priority for sale or lease for the development of
affordable housing.” The Housing Branch
also has access to certain lands via the Real Property Disposal process, and
provides those sites for low-income affordable rental housing under “Action
Ottawa” and the Canada-Ontario Affordable Housing Program. The Housing First Policy targets other
surplus lands that are outside of the limited resources of the Action Ottawa
program, and addresses how those lands can be positioned to help support the
City’s Official Plan targets for affordable housing.
Habitat for Humanity National
Capital Region is a non-profit organization, registered as a Charitable
Organization with Canada Revenue Agency that builds affordable housing and
promotes homeownership as a means to breaking the cycle of poverty. Habitat for Humanity National Capital Region
(hereinafter referred to as “Habitat for Humanity”) will sell the completed
houses at 324-328 Tulip Crescent to families who are at or below the Low Income
Cut-Off (LICO), as established by Statistics Canada.
The housing proposed on the Tulip
properties will meet the Official Plan definition of "affordable", in
that the household will not pay more than 30% of income on the mortgage
payment, and the household income will be at or below the 40th
income percentile. Attached in Document
1, are the most recently published LICO's from 2006, and the Housing Continuum
by Household Income Percentiles for 2007.
Habitat for Humanity holds a
first and second mortgage on the home and arranges an affordable payment
schedule with the buyer to ensure that the mortgage payment is no more than 30%
of household income. Habitat for
Humanity mortgage loans (i.e. both the first and second mortgages) are interest
free so the payment schedule is for repayment of the principal amount only for each
mortgage. The organization also retains the right of first refusal, if the home
is sold before the mortgages are paid off, to ensure that the home will remain
affordable to another qualifying household.
If the purchaser sells
or defaults on the property within twenty years of the date of the transfer of
the property, they will be required to repay all or some of the second mortgage
plus applicable taxes, to Habitat for Humanity. The obligation to repay the amount is secured by a second
mortgage on the property. After the
buyer’s twelfth year of occupation of the property, the principal amount of the
second mortgage will be reduced on an annual basis of 12.25% of the original
principal amount, and if the property is occupied as a principal residence for
twenty years, the principal amount of the second mortgage will be deemed to
have been paid in full.
Agreement of
Purchase and Sale
A recent appraisal
estimates the combined value of the subject lots to be $340,000.00. Although the City’s Surplus Real Property
Disposal By-law (2002-38) requires all property disposals to be on the basis of
market value, it also provides another means to address the need for affordable
housing, by recognizing housing as a City-mandated program and permitting the
Housing Branch to hold City-owned properties for affordable housing
purposes. The Housing Branch can then
make suitable properties available to the community, at below market or nominal
cost through a Request for Proposal (RFP) and consultation processes.
As indicated previously, Habitat
for Humanity was the successful RFP proponent by submitting an offer of
$25,000.00 per lot. Based on that
proposal and with a view to subsequent discussions between Habitat for Humanity
and Housing staff, the parties entered into an agreement of purchase and sale
to dispose of the two lots for $50,000.00.
The City of Ottawa Planning
Branch has indicated that a pedestrian walkway, which will link Tulip Crescent
and associated streets to Tenth Line Road, may be required when development
applications are submitted. Currently,
there is an informal pathway inside Lot 98, running alongside its Southside
line, near the boundary with Lot 97 (Document 2). As a condition of the Agreement of Purchase and Sale, Habitat for
Humanity has agreed to construct the pedestrian pathway to City specifications,
if required by Planning Branch. The
Agreement of Purchase and Sale shall stipulate that the City has the right to
purchase the land back for $1.00 in the event that Habitat for Humanity decides
to terminate the use of this land for the agreed purpose.
The Municipal Housing Project Facilities Agreement
Under the current Development Charge (DC) By-law (By-law
2004-298) as adopted by Council on July 14, 2004, the exemption for affordable
housing extends only to units that are owned by non-profit or charitable
housing organizations. It does not
extend to units that are developed by a non-profit and subsequently sold to
private individuals, because private individuals are not "non-profit"
or charitable entities. Since the option to exempt DC’s is not currently
available, the proposed alternative is to enter into a Municipal Housing
Project Facilities Agreement to defer the payment of development charges for a
minimum time period of 20 years, or until such time as the benefited home is
sold. If the home is sold before the
20-year period, and not maintained as affordable housing as defined in the
Official Plan, the value of the deferred development charges, plus interest,
would be repaid by the vendor to the City as part of the sale process. The value of the deferred fees will be
secured as a third mortgage from Habitat for Humanity as Charger/Mortgager, to
the City as Chargee/Mortgagee. Staff
proposal is that the interest rate for the deferred development charges be the
same as the rate of interest that is stipulated in the first mortgage from the
buyer to Habitat for Humanity that is registered on title to the property on
the closing date of the sale of the property from Habitat for Humanity to the
buyer. As Habitat for Humanity’s mortgages are always interest free, the City’s
third mortgage will also be interest free.
The City’s third mortgage shall be registered on title to
each housing unit while Habitat for Humanity is the registered owner of the
property so that the third mortgage will be from Habitat for Humanity as
Charger/Mortgager (i.e. borrower), to the City as Chargee/Mortgagee (i.e.
lender). The City will provide its
consent to the assignment of the said third mortgage to the buyer of the
housing unit.
Based on precedent agreements
with Habitat for Humanity, the term of the Municipal Housing Project Facilities
Agreement is 20 years and the amount of the first, second and third mortgages
will be as follows:
2nd mortgage: 20% of the appraised value less
the amount of the City’s 3rd mortgage (i.e., less development
charges of $38,282.00).
3rd mortgage (held by the City): Amount
of development charges; $38,282.00
The third mortgage will be paid
in full, in the event that the owner sells or transfers the property to another
property owner, prior to the end of the 20 year period, unless Habitat for
Humanity purchases the property back from the owner, in accordance with its
buy-back policy, in which case the third mortgage will remain on title.
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,
Public Works and Services and Planning and Growth Management, (now Planning,
Transit and the Environment), to determine if the parcel should be retained for
a City mandated program. The
Environmental Management Group of the Planning and Growth Management Services
Department was consulted with respect to the Greenspace Master Plan and their
comments are indicated under the Environmental Implications section of this
report. While the Housing Branch
expressed interest in developing the property with affordable housing, no other
City Department expressed interest in retaining the property.
The utility companies were also
circulated and no requirements were indicated.
The following Advisory Committees
have been circulated:
Local Architectural Conservation
Advisory Committee (LACAC)
Ottawa Forests and Greenspace
Advisory Committee (OFGAC)
Environmental Advisory Committee
(EAC)
Parks and Recreation Advisory
Committee (PRAC)
Roads and Cycling Advisory
Committee (RCAC)
Pedestrian and Transit
Rural Issues
The Ward Councillor has been made
aware of the intent to dispose of the subject property through the circulation
process.
HOUSING FIRST POLICY
The Official Plan policy directs
that the City make land available for affordable housing and give priority for
the sale or lease of surplus City-owned property for this purpose.
The
Housing First Policy, approved by Council on 13 July 2005, establishes priority
consideration to the Housing Branch, in the identification of potentially
surplus City-owned property, to be used in achieving the City’s affordable
housing program targets. The policy
also requires that the Official Plan target of 25% affordable housing, be met
on any City-owned property sold for residential development. Where viable, residential properties are
disposed of without a condition requiring an affordable housing component, 25%
of the proceeds from the sale are to be credited to a housing fund, to be used
for the development of affordable housing elsewhere in the City.
In this case, the subject
property will be developed with affordable housing, so no portion of the sale
proceeds will be directed to a housing fund.
ENVIRONMENTAL IMPLICATIONS
The subject properties contain a
small area of forest less than 0.1 ha along the rear portion of the property,
adjacent to the 174 On-ramp. The
properties and forest are not designated as significant natural environment
lands and were not identified in the Urban Natural Areas Environmental
Evaluation Study (March 2006). The
development of these properties will proceed according to the design with
nature principles outlined in the Official Plan and retain as much natural
vegetation as is feasible. No
implications to the natural environment have been identified for the proposed
sale of this property
The
City of Ottawa Planning Branch has indicated that a pedestrian walkway, which
will link Tulip Crescent and associated streets to Tenth Line Road, will be
required when development applications are submitted. Currently, there is an
informal pathway inside Lot 98, running alongside its Southside line, near the
boundary with Lot 97 (Document 2).
An
existing 20-foot wide Sewer Easement along the southern lot line of Lot 97,
between 322 and 324 Tulip Crescent, will remain in place. However, a drainage easement between Lots 97
and 98 could be relocated or removed, depending on the grading and drainage
plan prepared at the time of development.
Also,
Paragraph 59 of the
Subdivision Agreement registered on the properties, requires the developer to
grant an easement to the City for a berm, along the back of the property
abutting the boundary fence, to muffle the noise from Highway 17.
FINANCIAL IMPLICATIONS
This transaction represents
revenue of $50,000.00 to the Corporation, and will be credited to the City’s
Sale of Surplus Land Account.
The Municipal Housing Project
Facilities Agreement defers development charges in the amount of $38,282.00 and
ultimately forgives the development charges unless a housing unit is sold to a
person or organization, other than Habitat for Humanity, prior to the 20-year expiry
of the agreement.
SUPPORTING DOCUMENTATION
Document 1:
Low Income Cut-Offs 2006, Housing Continuum and Household Income Percentiles
2007
Document 2: Annex “A” sketch to illustrate the
subject property.
DISPOSITION
Legal Services Branch will bring project specific Municipal Housing
Facility by-laws before Council for approval.
Housing Branch and Legal Services Branch will execute the Municipal
Housing Facilities Agreements (MHFA) for the project.
Real Property Asset Management
and Legal Services Branches will finalize the sale transaction.
