Report Template

10. REQUEST FOR OFFERS TO PURCHASE PROCESS - 150 ELGIN/31 GLOUCESTER

PROCESSUS DE DEMANDE DE PROPOSITION : 150, RUE ELGIN/31, RUE GLOUCESTER

COMMITTEE RECOMMENDATIONS

That Council approve:

The "Request for Offers To Purchase" process, as specifically set out in this report, for the sale of the land and building described as Part of Lot 52, Lots 53 to 57, Plan 4556, North Gloucester Street, municipally known as 150 Elgin/31 Gloucester Street ( "Friday's Roast Beef House" and adjacent City public parking lot property);

The "Mandatory Requirements", the "Development Criteria Subject To Point Rating", and the "Point Weightings" for evaluating submissions as specifically set out in this report; and

3. The composition of the "Evaluation Team" as specifically set out in this report.

RECOMMANDATIONS DU COMITÉ

Que le Conseil municipal approuve :

1. le processus de « Demande d’offres d’achat », comme le définit de façon spécifique le présent rapport, pour la vente du terrain et de l’édifice décrits comme faisant partie du lot 52 et des lots 53 à 57, plan 4556, rue Gloucester Nord, et situés à l’adresse municipale 150, rue Elgin/31, rue Gloucester (Friday’s Roast Beef House, à côté du terrain de stationnement municipal);

2. les « Exigences obligatoires », les « Critères d’aménagement assujettis à la cotation numérique » et les « Pondérations » aux fins d’évaluation des appels d’offre, comme le définit de façon spécifique le présent rapport.

3. la création de l’« Équipe de sélection », comme le définit de façon spécifique le présent rapport.

Documentation

1. Development Services Department General Manager’s report dated 5 November 2003 (ACS2003-CRS-RPR-0072).

2. An Extract of Draft Minutes, 13 November 2003, will be distributed prior to Council’s meeting of 19 November 2003.

Report to/Rapport au :

Planning and Development Committee/

Comité de l'urbanisme et de l'aménagement

and Council / et au Conseil

5 November 2003 / le 5 novembre 2003

Submitted by/Soumis par : Ned Lathrop, General Manager/Directeur général,

Development Services/Services d'aménagement

And / et

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

Corporate Services/Services généraux

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

Real Property Asset Management/Gestion des actifs et des biens immobiliers

(613) 580-2424 x22595, Douglas.McCaslin@ottawa.ca

Ref N°: ACS2003-CRS-RPR-0072

SUBJECT:	REQUEST FOR OFFERS TO PURCHASE PROCESS - 150 ELGIN/31 GLOUCESTER

OBJET :	PROCESSUS DE DEMANDE DE PROPOSITION : 150, RUE ELGIN/31, RUE GLOUCESTER

REPORT RECOMMENDATION

That the Planning and Development Committee recommend that Council approve:

The "Mandatory Requirements", the "Development Criteria Subject To Point Rating", and the "Point Weightings" for evaluating submissions as specifically set out in this report; and

3. The composition of the "Evaluation Team" as specifically set out in this report.

RECOMMENDATION DU RAPPORT

Que le Comité de l'urbanisme et de l'aménagement recommande au Conseil municipal d’approuver :

3. la création de l’« Équipe de sélection », comme le définit de façon spécifique le présent rapport.

BACKGROUND

At its meeting of 14 May 2003 (Report ACS-2003-CRS-RPR-0040), City Council approved the lease-option to purchase 100 Constellation Crescent and the disposal of four (4) properties to fund the fit-ups and move costs as part of the Corporate Accommodation Master Plan (CAMP) project. 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 150 Elgin/31 Gloucester Streets, known as The Grant House (Friday’s Roast Beef House) and adjacent municipal public parking lot was one of the four (4) properties declared surplus. The strategic location and importance of this property with respect to achieving the City’s Official Plan objectives for the Downtown have been recognized by City Council. As a result, the sale of this property is subject to a request for offers to purchase process based on specific Development Criteria approved by Council as set out in Annex “C” of Report ACS2003-CRS-RPR-0040.

The budgetary authority for the sale of 150 Elgin/31 Gloucester 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 Public Sector Comparator (PSC) financial model required a minimum of $29.1M from the sale of the surplus properties to fund part of the project costs.

To date Council has approved the sale of the properties at 495 Richmond Road and 580 Terry Fox Drive. The sale of 1595 Telesat Court is now being recommended (Report ACS2003-CRS-RPR-071) and, if approved by Council, will result in three (3) of the four (4) surplus properties being sold subject to actual completion of the transactions.

With the completion of necessary due diligence work by the City for the sale of 150 Elgin/31 Gloucester, a “Request For Offers To Purchase” (RFOTP) document has now been prepared, based on the Council approved Development Criteria, for the sale of this remaining surplus property associated with the CAMP project.

DISCUSSION

Request For Offers To Purchase (RFOTP) Process

The RFOTP document sets out a “Request For Offers To Purchase” process based on the following milestone events and dates for the sale of the City’s property at 150 Elgin/31 Gloucester Streets.

Milestone Event	Date
Request For Offers to Purchase Release Date	25 November 2003
Inquiries and questions due by	9 January 2004
Responses provided by addendum	16 January 2004
Offers to Purchase due date	2 February 2004
Selection of preferred Offer to Purchase	12 February 2004
Report to Committee	April 2004
Approval by Council	April 2004
Agreement of Purchase and Sale by	21 May 2004
Design Development/ Site Plan submission by	30 July 2004
Development review completed by City by	1 October 2004
Development Agreement executed by	5 November 2004
Completion of sales transaction by	3 December 2004
Development to commence no later than	31 May 2005
Development to be completed no later than	31 May 2007

Under this process Offers to Purchase will remain valid and open for acceptance by the City for a period of one hundred and twenty (120) calendar days, following the due date for receipt of Offers to Purchase.

In order to have a complete submission for evaluation, the RFOTP document requests development overview information from Respondents as follows:

Development Overview

· Description of the type and size of all uses proposed for the development and indicating how this mix of uses will meet the development objectives and criteria;

· Description of the benefits to the public that are consistent with the Ottawa 20/20 Growth Management Strategy for a vibrant downtown environment that is created through a mix of uses, including Arts, Cultural, and Heritage, and a development fabric that provide increased diversity and vitality;

· Preliminary concept/massing plan and a conceptual perspective sketch (looking northwest to the Gloucester/Elgin corner) together with a brief narrative that clearly outlines how the submission meets the development objectives and criteria and also demonstrates the physical relationship of the proposed uses within the development;

· Description of the type, location and size of open space and linkages to be incorporated into the development and indicating how these meet the development objectives and criteria; and

· Brief narrative description of the Urban Design aspects of the proposal and how these will be addressed by the Planning Report and Urban Design/Traffic Impact/Site Servicing/Sun Shadow/Wind Studies Planning as part of the later design development stage in order to demonstrate how the development objectives and criteria can be met.

The evaluation of Offers to Purchase will be undertaken by an Evaluation Team comprised of senior staff from the City and will be facilitated by the Supply Management Division. An independent Fairness Commissioner will oversee this selection process. The Evaluation Team will review all offers received and score the offers using a consensus approach, in relation to the criteria and point ratings approved by City Council. Based on this evaluation, a recommendation on the preferred offer and a execution of a resulting agreement of purchase and sale will be made to City Council.

A preferred offer will be determined as the one that:

(a) Meets all the Mandatory Requirements, and

(b) Achieves the highest point total out of the 100 points, which are available under the Development Criteria Subject to Point Rating set out in the RFOTP document.

Mandatory Requirements

The RFOTP document sets the following Mandatory Requirements (M) that must be met:

M1 Offer to Purchase Deposit

Offers to Purchase must be accompanied by a deposit of Fifty Thousand Dollars ($50,000.00) in the form of a certified cheque.

M2 Agreement of Purchase and Sale

Offers to Purchase must indicate that the Respondent will, by no later than 21 May 2003, execute, in a form satisfactory to the City, an Agreement of Purchase and Sale with the City based on their Offer to Purchase and must also indicate in their offer that the Agreement of Purchase and Sale shall include the following conditions:

1. The Purchase Price shall be Six Million Six Hundred Thousand Dollars ($6,600,000.00)

2. A further deposit shall be made by the preferred Respondent, in the amount of Six Hundred Thousand Dollars ($600,000.00) in the form of a certified cheque, within 5 calendar days following the approval of the Agreement of Purchase and Sale by City Council.

3. The Respondent shall accept the assignment by the City of its interests in the Lease Agreement with Ken Dolan Incorporated for the building at 150 Elgin Street.

4. The Respondent acknowledges that the building at 150 Elgin Street is designated under By-law 21-82 as being of historic and architectural value under Part IV of the Ontario Heritage Act and agrees to the City registering a heritage easement as provided for in Section 2.5.5 - Policy #16 of the City’s new Official Plan.

The Respondent shall carry out detailed design development, including completion of the Planning Report and Urban Design/Traffic Impact/Site Servicing/Sun Shadow/Wind Studies set out in Annex “C” and shall submit these, together with a Site Plan Control application, to the City by no later than 30 July 2004 to demonstrate that the conceptual design submitted with the Offer to Purchase can, in fact, be practically implemented.

The Respondent shall allow the City until 1 October 2004 to review the site plan and related studies/reports and to confirm that the City’s development criteria have been met with the intent of executing a development agreement with the City by no later than 5 November 2004.

The Completion Date for the transaction shall be no later than 3 December 2004 and the balance of the Purchase Price shall be paid by certified cheque on closing.

The Respondent shall undertake to obtain a building permit and commence construction of the development by no later than 31 May 2005 and complete construction no later than 31 May 2007 and failing this agrees that the City may, at its option, at any time after either of such dates, require the Respondent to retransfer the property to the City free from encumbrances at a price equal to eighty percent (80%) of the purchase price being paid by the Respondent.

Offers not fully complying with any of the mandatory requirements will be deemed non-responsive by the evaluation team and will be given no further consideration.

While most of the mandatory requirements are self-explanatory, the reasons for the fixed purchase price, and lease arrangements for the Grant House are indicated below.

In accordance with City policy, properties deemed surplus to City needs are sold based on current market value. In this case, two (2) independent fee appraisal firms appraised the property and the fixed purchase price of $6,600,000 set out under the mandatory requirements is based on the market values established by these appraisal reports. These reports take into account the requirements to have one third of the remaining building density for the site developed with a residential component and to maintain the short-term public parking spaces at City rates on site, or in the general vicinity of the site.

Since the appraisals were based on the assumption that no immediate repairs to The Grant House are required, the fixed price of $6,600,000 includes an adjustment for the estimated cost of repairs to that building as established from a Building Condition Report, dated June 2003, prepared for the City as part of the due diligence work in preparing the RFOTP document.

The establishment of a fixed price is to allow the City to select a preferred offer by rating submissions solely on the basis of the development criteria and associated point rating as set out in the RFOTP document.

With respect to the assignment of the lease for the Grant House as provided for in the mandatory requirements, this reflects the long-term lessor/lessee relationship between the City and Ken Dolan Incorporated (Friday’s Roast Beef House) which company has leased this building since 1971. The current lease term, as approved by the Council of the former City of Ottawa on 2 October 1996, expires as of 31 December 2003.

It is the intention to finalize a new lease document that will be submitted to City Council for approval at the same time that the results of the selection process from the “Request For Offers To Purchase” process are considered. Certain provisions of the proposed lease that are relevant to prospective are summarized in the RFOTP document to assist Respondents in preparing their offer.

Development Criteria Subject to Point Rating

The RFOTP document indicates that Offers to Purchase will be evaluated according to the evaluation/development criteria and the available points specified as summarized in the following table:

*Evaluation Criteria*	*Points*
Uses & Public Benefit	40
Built Form and Relationship of Uses	30
Open Space and Linkages	10
Urban Design	20
TOTAL	100

The evaluation criteria are based on the development criteria approved by City Council on 14 May 2003 and are as follows, with an additional criteria under Uses & Public Benefit relating to the public benefit derived from proposed uses related to Arts, Cultural, Heritage and associated uses as identified in the Ottawa 20/20 Growth Management Strategy:

Uses & Public Benefit (40 points)

Criteria:

Provision of a mix of uses - Uses may focus on employment type uses, however, other uses that generate evening and weekend activity are to be provided such as entertainment and cultural uses to maximize the attributes of the site’s situation.
There will be a requirement for residential development that at a minimum represents one third of the development.

· Short-term parking equal to the current supply provided by the site must be included as part of the mixed-use project.

Pedestrian oriented uses are to be provided at grade along pedestrian corridors including Elgin Street, and Laurier Avenue and along Gloucester Street. Pedestrian oriented uses can include street oriented retail where direct access to the use is provided from the street and where their visibility to pedestrians is maximized (preference will be for narrow store fronts), and public plazas/pocket parks.

Built Form (30 points)

Criteria:

· Building heights, including roof treatments and mechanical equipment must not exceed the height limits set out in the Zoning By-law;

· Retention of the Friday’s Roast Beef heritage building;

· Integration of the scale and mass of new development with the Friday’s Roast Beef heritage building and with the church through various techniques such as providing for a transition in building heights and through architectural detailing;

· Contribution to a sense of human scale for adjacent pedestrian areas including public sidewalks and open space areas through various techniques including setting back upper portions of buildings.

Open Space and Linkages (10 points)

Criteria:

· Provision of pocket parks, plazas, indoor public amenity areas that provide opportunities for programmed, active and/or passive activities.

· Provision of animated pedestrian linkages through the site that connects on-site features/focal areas (such as pocket parks and plazas) with the sidewalk environment and that maintains existing pedestrian movement patterns through the site.

Urban Design (20 points)

Criteria:

· High quality architectural design for new development with respect to massing, materials and the provision of interesting roof treatment that is within the height limits as set out by the Zoning By-law;

Reflect a human scale in building design adjacent to pedestrian corridors through various techniques that include setting back upper stories, architectural detailing and embellishment of lower floors, providing for transparency into buildings through extensive use of glazing, and the provision of at grade street retail and other interior spaces that relate to the street environment and are publicly accessible and useable and in the design of open spaces through the provision of landscaping, seating, public art, water features;
Design that compliments and enhances existing heritage buildings in terms of massing, scale, materials;
Provide for weather protection along key pedestrian corridors through various techniques such as awnings, canopies, tree planting corridors;
Enhance the urban forest through the provision of landscaping that includes street tree planting, tree planting within open spaces and in particular through the establishment of green pocket parks;
Recognize through the project design the role of the site in contributing to defining a key gateway into the downtown in a way that also recognizes that Elgin is a distinctive street requiring special consideration;
Minimize shadow impacts on public open spaces, maximize sun penetration into/along pedestrian corridors, and avoid undesirable wind conditions for pedestrian areas and open space areas, and provision of weather protection along key pedestrian corridors;
Provision of parking below grade and provision of access to parking and to loading where impacts on the pedestrian environment will be minimized;
Any lay-by provided must be contained within the site.

Evaluation Team

The evaluation of Offers to Purchase will be undertaken by an Evaluation team comprised of senior staff from the City with expertise and experience in real estate development, urban planning and design, architectural design, and community development. The Supply Management Division will facilitate the evaluation of offers and an independent Fairness Commissioner will oversee the evaluation process. It is recommended that the Evaluation Team include the Director of the Real Property Asset Management (RPAM)Branch and also have representation from the following Divisions within the City’s organization:

Real Estate Services (RPAM)
Design & Construction (RPAM)
Development Approvals - Central (Development & Infrastructure Approvals)
Community Design & Environment (Planning, Environment & Infrastructure Policy)
Community Funding & Development (IDP)
Strategic Delivery Unit (City Manager)

RECOMMANDATIONS DU COMITÉ

25 November 2003

Mandatory Requirements

Development Criteria Subject to Point Rating

Evaluation Team

DISPOSITION