3. The assumption of License Agreements
between Canadian Pacific Railway Company and certain network cable companies
resulting in revenue to the City of approximately $27,000 per annum, adjusted
periodically per the terms of the Agreements.
4. The payment of $575,000 for deferred
costs associated with the design phase of the Light Rail Pilot Project.
5. The pre-commitment, in the amount of
$12,122,908 GST included, from the 2005 Capital Budget for the North/South
Light Rail Transit – Property Acquisition.
RECOMMANDATIONS DU
RAPPORT
Que le Comité des
services organisationnels et du développement économique recommande au
Conseil d’approuver :
1. l’acquisition de
l’emprise active du Canadien Pacifique connue comme étant les lignes louées 1 – partie du lotissement Ellwood,
entre le mille 0,00 et le mille 4,99 (de la rivière des Outaouais au chantier
Walkley), les lignes louées 2 – partie du lotissement Prescott, entre le mille
4,89 et le mille 8,17 (du chantier Walkley au chemin Leitrim) et le pont Prince
of Wales, pour la somme totale de 11 051 880 $, la TPS en sus,
sous réserve du levé final et des rajustements au moment de la clôture;
2. la
location sur deux années, avec deux options de renouvellement d’une année, de
la propriété de 8,5 acres constituant le dépôt d’entretien du chantier Walkley,
pour la somme totale de 153 000 $, la TPS en sus, les taxes foncières
étant estimées à 104 000 $, la TPS en sus, pour les deux ans;
3. la
prise en charge de contrats de licence entre la Compagnie de chemin de fer
Canadien Pacifique et certaines sociétés de câbles de réseau, générant pour la
Ville des recettes annuelles d’environ 27 000 $, rajustées
périodiquement selon les modalités des contrats;
4. le
paiement de 575 000 $ pour les frais reportés liés à la phase de
conception du projet pilote de train léger;
5. le
préengagement de la somme de 12 122 908 $ provenant du budget des
immobilisations de 2005 à l’égard du projet de transport par train léger
nord-sud et d’acquisition de propriétés.
BACKGROUND
In August 1998, Council of the former Region of Ottawa-Carleton directed staff to proceed with development and implementation of a pilot project for light rail transit service.
In September 1999, Council of the former Region of Ottawa-Carleton approved the Light Rail Pilot Project (LRPP).
In December 1999, the Region of Ottawa-Carleton negotiated a Master Agreement and subsequent Lease Agreement with CP Rail to lease an eight mile active railway right of way having a total area of 114.36 acres and an 8.5 acre maintenance yard to facilitate the LRPP. The lease was for a four year term commencing 1 April 2001 and terminating 31 May 2005 with no right of renewal or extension. At the end of the first two years the City had the option to continue to lease for the remaining two years, terminate the existing lease or to purchase the leased lands outright. This option to purchase remains open until 31 May 2005.
In early 2000, the Region of Ottawa-Carleton, as part of the LRPP, incorporated its Light Rail Transit (LRT) as a Federal Railway under the trademark “Capital Railway”. This effectively allowed the City to run the LRPP as a Federally Regulated Railway.
In November 2002, Council approved the extension of the LRPP to the end of the lease terminating on 31 May 2005, opting to continue to lease the right of way to the end of the term.
In February 2003, Council approved the Rapid Transit Expansion Study (RTES) as part of the rapid transit component of the Transportation Master Plan. It recommended electrified light rail to replace the LRPP (O-Train).
In July 2003, the City completed the Ottawa Rapid Transit Expansion Program (ORTEP) Report that identified an Implementation Strategy to expand the current rapid transit pilot project beyond 31 May 2005. The strategy recommended negotiations to complete the purchase of the CPR railway corridor for the north-south priority line and to identify and acquire the most appropriate maintenance and storage yard site along the priority line. Council received the ORTEP Implementation Strategy in September 2003.
In November 2003, the City forwarded to CP Rail its intent to exercise the option to purchase the railway right of way only, electing to lease the 8.5 acre maintenance yard beyond 31 May 2005, until a suitable long term maintenance yard can be identified. Negotiations on the terms of acquisition continued with CP Rail into November 2004.
DISCUSSION
At the request of the Planning and Growth Management Department negotiations with CP Rail for the fee simple acquisition of the 114.36 acre active railway right of way resulted in an agreement of purchase and sale under the following terms.
As part of the original lease approved by the former Region of Ottawa-Carleton in 1999 the cost of acquiring the right of way was set at a rate of $100,000/acre for the Leased Lines 1 section known as the Ellwood Subdivision which extends from the Ottawa River south to the Walkley Yard. The total area of Leased Lines 1 is 79.45 acres, which results in a value of $7,945,400.
Within the Leased Lines 1 are existing easements with the Federal Government for the railway tunnel across Dows Lake. The total area of these easements is 2.83 acres. The discounted rate established for these lands is 50% of the $100,000/acre or $50,000/acre, which results in a value of $141,800.
A rate of $80,000/acre was established for the Leased Lines 2 section known as the Prescott Subdivision, which extends from Walkley Yard to Leitrim Road. Total area of Leased Lines 2 is 32.07 acres, which result in a value of $2,565,680. The total cost for the City to acquire the fee simple and easement property rights for Leased Lines 1 & 2 from CP Rail is $10,652,880.
The Prince of Wales Bridge across the Ottawa River was not included in the original lease, however the sale of the corridor on the Quebec side of the Ottawa River to the Gatineau-Quebec Railway and the sale of the corridor on the Ottawa side of the Ottawa River to the City effectively leaves the bridge under CP Rail ownership with no anticipated future use.
CP
Rail indicated its interest in including the bridge as part of this transaction
and the City, following its assessment of the condition of the structure,
recommends that the bridge be included in the transaction for a consideration
of $399,000 related to the land value only of the bridge.
The assessment carried out by the City indicates that the steel structure of the bridge is in very good condition and that the piers supporting the structure are in fair to good condition. The piers located in the water are enclosed with crib walls that have deteriorated over time and will require attention within the next five years at a cost estimated at around $2.5M. It is anticipated that this work will be included in the major contract for the construction of the LRT and will provide long-term stability to the structure.
The acquisition of this bridge will provide a valuable option to provide interprovincial transit services in the future and forms part of the City’s long-term planning perspective.
The purchase option for the 8.5 acre Walkley Yard was not exercised by the City, however, staff is recommending to extend the lease of the yard to retain a maintenance facility site as an interim solution. This extension will allow staff time to locate a suitable long term maintenance yard. The lease will have a two-year term with two one-year renewal options. The rent is based on $90,000/acre at a discount rate of 10%; the total rental per annum is $76,500 plus GST. In addition, the City will be responsible for realty taxes estimated at $52,000 per annum plus GST.
The fee simple interest in the railway corridor is subject to certain permitted encumbrances. CP Rail will maintain three existing fibre optic network agreements. The agreements are national in scope and provide the users a seamless connectivity for their network system. The City will honour these agreements but will retain all revenues associated with these rights within the right of way owned by the City. Currently, these revenues amount to $27,000 per annum. Further, CP will retain the right to add to the network, subject to the City’s review, which our approval will not be unreasonably withheld. However, the City will retain any income resulting from these future occupations of the right of way.
Numerous crossing agreements will be assigned to the City as part of the purchase, most of these agreements are for infrastructure owned by the City. However, there are three poster panel agreements that generate revenues of $22,000 per annum to be retained by the City.
In the planning phase of the LRPP, CP Rail spent considerable time and effort working with the City to develop preliminary designs for the system. In the agreement with CP Rail, approved in September 1999, it was agreed to defer payment of the costs associated with the services provided to the end of the lease and that these costs would be payable by the City only if the City exercised its option to purchase. The total amount payable by the City for these design costs is $575,000, excluding GST.
The total cost of the Leased Lines including the
Prince of Wales Bridge is $11,051,880 plus GST, subject to final survey and
adjustments on closing. The agreement with CP Rail requires the City to pay a
deposit of 5% ($552,594) of the purchase price upon Council approval. The
remaining balance will require pre-commitment of the 2005 Capital Budget.
The
purchase of the corridor at this time ensures that the City continues its
operations of the O-Train beyond 31 May 2005 and supports the negotiations of
the contribution agreement with the two senior levels of governments for the
construction of the North-South LRT System.
In
addition, the acquisition of the right of way will benefit various capital
projects the City is currently planning which require property rights on the
subject lands. At this time, the Infrastructure Services Branch of Public Works
Services Department requires an easement across the right of way to supply a
new watermain to Lebreton Flats. As part of another capital project, Traffic
and Parking Operations Branch of Public Works Services Department is planning a
multi-use pathway connecting the Bayview O-Train Station with the NCC’s Ottawa
River Parkway. Both of these projects will be able to move forward in a timely
fashion and at an overall cost savings to the City.
ENVIRONMENTAL IMPLICATIONS
The agreement is conditional upon the Purchaser
undertaking satisfactory completion of environment and soil investigations. The
agreement includes provisions for the mandated remediation of any pre-existing
conditions, by the Vendor, to the extent necessary to bring any relevant
portion of the lands in compliance with minimal applicable federal or
provincial environmental standards.
CONSULTATION
There has been extensive public consultation
throughout the process of the Light Rail Pilot Process Environmental
Assessment, the Rapid Transit Expansion Study. The Ward Councillors have been
notified of this acquisition.
FINANCIAL IMPLICATIONS
As part of the Development Charge Bylaw and
Long Range Financial Plan, a number of capital projects have been identified
for the implementation of a new Light Rail Transit System. Various projects will be included in the
2005 draft capital estimates supporting both North/South and East/West Light
Rail Transit. The total cost of this property acquisition from CP Rail is $12,675,502,
GST included. Subject to Council approval, a deposit in the amount of $552,594
is available in Account No. 900040, Future Transit Corridor – Property and the
remaining $12,122,908
represents a pre-commitment of the 2005 Authority for
the Rapid Transit Corridor – Property Acquisitions.
SUPPORTING DOCUMENTATION
Attached, as Annex “A” is a sketch showing the lands being acquired.
DISPOSITION
Corporate Services Department: Legal Services to finalize this property transaction
ANNEX A
