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5. LEASE EXTENSION – O-Train Maintenance Facility – 3130 Albion Road,
City of Ottawa – canadian pacific railway company Prolongation
du contrat de location – installations de maintenance de l’O-train – 3130,
chemin albion, Ville d’Ottawa – Chemin de fer canadien pacifique |
Committee Recommendation
That Council
approve a four (4) year lease extension, with a one (1) year option for the 8.5
acre O-Train Maintenance Facility at 3130 Albion Road, City of Ottawa, for the
consideration of $444,510 plus GST, for base rent including a three percent
annual increase and an estimated $194,000 plus GST for realty taxes, for an
estimated total consideration of $638,510 for the four (4) year term.
Recommandation du Comité
Que le Conseil approuve une prolongation du contrat de location de quatre ans, avec une année d’option, des installations de maintenance de l’O-Train de 8,5 acres situées au 3130, chemin Albion, à Ottawa, pour un montant de 444 510 $, TPS en sus, comme prix de location de base, comprenant une augmentation annuelle de trois pour cent et un montant approximatif de 194 000 $, TPS en sus, pour les impôts fonciers, ce qui donne un montant total de 638 510 $ pour la période de quatre ans.
Documentation
1. Executive Director of Business Transportation
Services’ report dated 12 May 2008 (ACS2008-BTS-RPM-0020).
Report
to/Rapport au :
Corporate Services and Economic Development Committee
Comité des services organisationnels
et du développement économique
and Council / et au Conseil
Submitted by/Soumis par : Stephen 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 / gestionnaire,
Services immobiliers, Gestion des biens immobiliers
(613) 580-2424, ext. / poste 21217,
gordon.macnair@ottawa.ca
REPORT RECOMMENDATION
That the Corporate Services and
Economic Development Committee recommend Council approve a four (4) year lease
extension, with a one (1) year option for the 8.5 acre O-Train Maintenance
Facility at 3130 Albion Road, City of Ottawa, for the consideration of $444,510
plus GST, for base rent including a three percent annual increase and an
estimated $194,000 plus GST for realty taxes, for an estimated total
consideration of $638,510 for the four (4) year term.
RECOMMANDATION DU
RAPPORT
Que le Comité des services organisationnels et du développement économique recommande au Conseil d’approuver une prolongation du contrat de location de quatre ans, avec une année d’option, des installations de maintenance de l’O-Train de 8,5 acres situées au 3130, chemin Albion, à Ottawa, pour un montant de 444 510 $, TPS en sus, comme prix de location de base, comprenant une augmentation annuelle de trois pour cent et un montant approximatif de 194 000 $, TPS en sus, pour les impôts fonciers, ce qui donne un montant total de 638 510 $ pour la période de quatre ans.
BACKGROUND
In August 1998, Council of the former Regional Municipality 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 Regional Municipality of Ottawa-Carleton approved the Light Rail Pilot Project (LRPP).
In December 1999, the Regional Municipality of Ottawa-Carleton negotiated a Master Agreement and subsequent Lease Agreement with the Canadian Pacific Railway Company (CP), to lease an eight mile long 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 (4) year term commencing 1 April 2001 and terminating 31 May 2005, with no right of renewal or extension.
On 7 December 2004, Council approved the acquisition of the 114.36 acres right of way and the Lease of the 8.5 acre maintenance yard (Walkley Yard). The new term became effective 1 June 2005, expiring 31 December 2006, with two (2) one-year renewal options for the 8.5 acre site. The City exercised both renewal options effective 15 September 2006 and 25 September 2007 under delegated authority. The Lease is set to expire 31 December 2008.
With the cancellation of the North-South LRT Project in December 2006,
there is currently a requirement to extend the Lease for the maintenance yard,
to support the existing O-Train transit program. Once the new transit plan is approved and the need for new
maintenance facilities is confirmed, Council has the flexibility to revisit
this lease agreement.
Based on the direction of the Planning, Transit and Environment Department, Real Property Asset Management (RPAM) has been asked to negotiate an extension to the current Lease at 3130 Albion Road.
DISCUSSION
The subject 8.5 acre site is municipally known as 3130 Albion Road, City of Ottawa and is part of a larger 60 acre site owned by CP. The site is improved with an approximately 20,000 square foot maintenance facility that is currently used as the main repair depot for the O-Train transit program.
Negotiations with CP have lead to a Letter of Intent being signed 14 April 2008. Terms include extending the term of the existing Lease for four (4) years effective 1 January 2009, with an additional (1) one-year option. Either party can terminate, upon providing the other party a (1) one-year notice. Base Rent has been negotiated at $125,000 per acre of land for the 8.5 acres, discounted at a rate of 10%, for a total annual base rent of $106,250 per annum plus GST. This value is deemed to be market value for similar large tract industrial lands in the vicinity. Base rent will increase at the higher rate of 3% or the annual stated CPI index. In addition, the terms include payment of realty taxes levied on this site, which are estimated at $45,000 per annum plus GST and increasing at an estimated 5% per annum. All remaining terms within the existing Lease remain the same.
The total Lease commitment over the four (4) year term is estimated at $638,510. This Lease is recommended for approval.
ENVIRONMENTAL IMPLICATIONS
There are no changes to the existing environmental clauses.
CONSULTATION
The Ward Councillor is aware of this project.
FINANCIAL IMPLICATIONS
The 2008 approved operating budget for Transit Facilities within the RPAM Branch has sufficient funds to cover the cost of this Lease extension.
SUPPORTING DOCUMENTATION
The attached Annex “A” identifies the location of the leased area.
DISPOSITION
Following Council’s approval, the Real Property Asset Management and
Legal Services Branches will finalize and execute the Lease extension
Agreement.
