10. March road: Sale of March House Property - AND RELATED ISSUES

Chemin march: VENTE DE LA maison MARCH ET QUESTIONS CONNEXES

Committee RecommendationS

That Council:

1. Declare a parcel of land shown hatched as Parcel C on Annex “A” attached, containing approximately 0.175ha, described as Part of Lot 11, Concession 4, geographic Township of March, now in the City of Ottawa, subject to final survey, as surplus to the City’s needs;

2. Waive City policy with respect to publicly marketing all viable parcels and approve the sale of the March House property shown hatched as Parcels A, B, and C, on the attached Annex “A”, containing an area of approximately 0.477ha, described as Part of Lot 11, Concession 4, geographic Township of March, now in the City of Ottawa, subject to final survey, and subject to any easements that may be required, to Riotrin Properties (March Road) Inc. for $200,000.00, pursuant to an Agreement of Purchase and Sale that has been received;

3. Approve the initiation of the expropriation process where necessary, for all property requirements associated with the construction of March Road from Morgan’s Grant Way to a point 500m north of Old Carp Road; and

4. Delegate to the City Manager the authority to adjust the purchase price if, during the due diligence period for the purchase, unexpected additional costs are identified for the preservation of March House.

RecommandationS du comité

Que le Conseil :

1. Déclare excédentaire aux besoins de la Ville une parcelle de terrain, illustrée par des hachures comme la parcelle C de l’Annexe « A » ci-jointe, d’une surface approximative de 0,175 hectare, décrite comme une partie du lot 11, concession 4, canton géographique de March, maintenant dans la Ville d’Ottawa, sous réserve de l’arpentage final;

2. Suspende l’application de la politique municipale en matière de mises en marché publiques des parcelles viables et d’approuver la vente de la Maison March, illustrée par des hachures comme les parcelles A, B, et C dans l’Annexe « A » ci-jointe, d’une surface approximative de 0,477 hectare, décrite comme une partie du lot 11, concession 4, canton géographique de March, maintenant dans la Ville d’Ottawa, sous réserve de l’arpentage final et de toute servitude qui pourrait être requise, à Riotrin Properties (March Road) Inc. pour la somme de 200 000 $, en vertu de la convention d’achat-vente reçue;

3. Approuve, si nécessaire, le commencement du processus d’expropriation afin de répondre aux exigences foncières connexes à la construction du chemin March, et ce, de la voie Morgan’s Grant à un point situé à 500 m au nord du chemin Old Carp; et

4. Délègue au directeur municipal l’autorité d’ajuster le prix d’achat si, au cours de la période de diligence requise pour l’achat, des coûts supplémentairs inattendus sont établis pour la préservation de la Maison March.

Documentation

1. Executive Director, Business Transformation Services’s report dated 25 July 2008 (ACS2008-BTS-RPM-0024).

Report to/Rapport au :

Corporate Services and Economic Development Committee

Comité des services organisationnels et du développement économique

and Council / et au Conseil

25 July 2008/ le 25 juillet 2008

Submitted by/Soumis par: 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 x21217, gordon.macnair@ottawa.ca

Kanata North (4)

Ref N°: ACS2008-BTS-RPM-0024

SUBJECT:	March road: Sale of March House Property - AND RELATED ISSUES

OBJET :	Chemin march: VENTE DE LA maison MARCH ET QUESTIONS CONNEXES

REPORT RECOMMENDATIONS

That the Corporate Services and Economic Development Committee recommend Council:

RECOMMANDATIONS DU RAPPORT

Que le Comité des services organisationnels et du développement économique recommande au Conseil :

1. De déclarer excédentaire aux besoins de la Ville une parcelle de terrain, illustrée par des hachures comme la parcelle C de l’Annexe « A » ci-jointe, d’une surface approximative de 0,175 hectare, décrite comme une partie du lot 11, concession 4, canton géographique de March, maintenant dans la Ville d’Ottawa, sous réserve de l’arpentage final;

2. De suspendre l’application de la politique municipale en matière de mises en marché publiques des parcelles viables et d’approuver la vente de la Maison March, illustrée par des hachures comme les parcelles A, B, et C dans l’Annexe « A » ci-jointe, d’une surface approximative de 0,477 hectare, décrite comme une partie du lot 11, concession 4, canton géographique de March, maintenant dans la Ville d’Ottawa, sous réserve de l’arpentage final et de toute servitude qui pourrait être requise, à Riotrin Properties (March Road) Inc. pour la somme de 200 000 $, en vertu de la convention d’achat-vente reçue;

3. D’approuver, si nécessaire, le commencement du processus d’expropriation afin de répondre aux exigences foncières connexes à la construction du chemin March, et ce, de la voie Morgan’s Grant à un point situé à 500 m au nord du chemin Old Carp; et

4. De déléguer au directeur municipal l’autorité d’ajuster le prix d’achat si, au cours de la période de diligence requise pour l’achat, des coûts supplémentairs inattendus sont établis pour la préservation de la Maison March.

BACKGROUND

The March Road project involves the reconstruction of March Road, from Morgan’s Grant Way to Old Carp Road, and involves the acquisition of properties to accommodate road widening requirements.

The subject property, referred to as the March House property, consists of three parcels of land that were acquired by the former Region of Ottawa-Carleton and the City, to accommodate widening and realignment of March Road and the March Road / Klondike Road intersection, in the former City of Kanata.

The parcel situated at the northeast corner of Klondike Road and March Road, shown as Parcel A on the sketch attached as Annex “A”, is municipally known as 806 March Road. It is improved with one-and-a-half storey stone structure that was built in the 1850’s. When the City purchased this property in 2002, the building was occupied by a restaurant operation known as the March House Restaurant. The building has remained vacant since that time.

On 25 August 2004, City Council designated the property at 806 March Road containing the existing March House building as a heritage property, under Part IV of the Heritage Act through By-law 2004-373. The relocation of the building to allow for the widening of March Road was anticipated at the time of the heritage designation.

Parcels B and C were purchased earlier in connection with the March Road widening project. At that time, it was anticipated that storm water requirements for both March Road and the March House property, would be handled by a storm water management pond (SWMP), to be constructed on Parcel C. It was also contemplated that the sale of the relocated March House would be greatly enhanced by combining Parcel B with Parcel A.

On 13 September 2006, City Council approved a report (ACS2006-CRS-RPM-0039):

· Declaring the March House property, which includes Parcels A and B shown on the sketch attached as Annex “A”, as surplus to the City’s needs;

· Approving the relocation of the heritage building known as March House, for an estimated cost of $250,000.00 plus GST; and

· Approving the “Request for Offers to Purchase” process for the sale of the surplus March House property;

In 2007, the March House building was relocated to a new position just outside of the future, widened limits of March Road. The building now sits on a new foundation, and is sited in compliance with direction provided by Planning, Transit and the Environment to preserve the historic relationship of March House to the new intersection configuration. Total relocation cost for the March House was $328,478.00; all of which will be recovered from development charge funding.

DISCUSSION

March House

In the course of preparing the Request for Offers to Purchase, a number of constraints to development became apparent that would seriously deter from any offer price.

As a result of the property’s location between the widened limits of March Road and the slope stability limits of Shirley’s Creek, which is situated immediately to the east of the property, there remains only 4,770 m² of the overall property that can be considered developable. This developable area is shown as Parcels A, B, and C on the attached Annex “A” sketch.

Another development consideration is the fact that municipal servicing is not readily available. Although a watermain will be constructed as part of the March Road reconstruction project and will be available to the property once the roadway has been built, it will be necessary for the purchaser of the March House to provide sanitary services to the property. A “Sanitary Sewer Serviceability Report” prepared by IBI Group, investigated several servicing options ranging in cost from $115,500.00 to $416,250.00. Based on that report, a cost of $150,000.00 to provide sanitary services to the property was judged to be appropriate.

In addition to the servicing costs, the property has been designated a heritage property and there are significant costs associated with the rehabilitation of the March House structure. Although the building has been stabilized and now sits on a new concrete foundation, there is an immediate need to protect the structure from water penetration. This will require repairs to the roof and masonry repointing where necessary. These immediate costs have been estimated to be in the order of $50,000.00.

An independent appraisal estimates the value of the March House property to be $390,000.00. This value estimate assumed the property to be fully serviced, and zoned to permit some form of commercial development. Furthermore, the appraisal did not take into consideration cost implications arising from the City’s requirement to have the purchaser of the property enter into a heritage easement agreement, establishing its obligation to preserve, repair and maintain the March House building in accordance with its heritage designation. Specifically, no consideration was afforded the cost to complete immediate repairs to protect the building from water penetration. After deducting the estimated cost of $150,000.00 to provide sanitary sewer services to the March House, and $50,000.00 for immediate repairs to the building, a net value of $190,000.00 is developed for the March House property.

Riotrin Properties (March Road) Inc.

Situated adjacent to the northerly boundary of the March House property, is a 4ha property owned by Riotrin Properties (March Road) Inc. (Riotrin). Riotrin is proposing a commercial development on its site and has submitted preliminary development proposals for discussion with relevant City departments.

As the Riotrin property is located within the catchment area for an approved SWMP, and the conceptual location for the SWMP from the Shirley’s Brook Environmental Management Plan impacts the Riotrin lands, staff through the Functional Design exercise, developed alternative locations. The alternatives took into consideration a number of factors and included options that contemplated a facility completely on the Riotrin lands, being shared on both lands, and a facility on the City lands. Through these discussions, Riotrin expressed an interest in purchasing the March House property, which would allow the SWMP to be built fully on the March House lands and permit more of the Riotrin lands to be developed without the need to retain space for the required SWMP. Riotrin subsequently submitted a proposal illustrating the March House property being integrated and incorporated into a single, overall development.

Further consideration of Riotrin’s proposal by Real Estate Services and Planning, and Infrastructure Services staff has resulted in support to have the March House and Riotrin properties combined as a development entity, and therefore it is recommended that the disposal of the March House property be sole-sourced to Riotrin. It is further recommended that Parcel C, which was previously retained by the City for future storm water management purposes, be declared surplus in order to incorporate it into the overall development proposal. It is felt that by integrating both the Riotrin lands and the March House parcels, it would be possible to eliminate the need for at least one access/egress off of March Road, which would otherwise be required to service the March House property. Furthermore, it would be possible to establish the remaining accesses further apart, creating a more optimal access/egress to the proposed development and a safer environment. The need for other services to the March House building such as sanitary and storm, can be more effectively accommodated through integration with the Riotrin site as compared to more costly alternatives. Finally, the existing March House would have a greater prominence as part of an integrated development, such that parking facilities could be linked and shared, providing a more efficient use of the available lands.

Road Widening Requirements

To accommodate the reconstruction of March Road, the City has a widening requirement along the entire March Road frontage of Riotrin’s property. This requirement comprises an area of approximately 3,362 m², and would typically be dedicated at no cost to the City as a condition of Riotrin’s site plan approval. However, there is no certainty at this point that site plan approval will precede the road construction project. In that case, it would be necessary for the City to purchase its widening requirements from Riotrin at an estimated cost of approximately $400,000.00.

Sale Agreement

An Agreement has been reached with Riotrin Properties (March Road) Inc. to purchase Parcels A, B, and C for $200,000.00. As part of the settlement, Riotrin has agreed to:

· Transfer at no cost to the City on the date of closing, all March Road widening requirements along the entire March Road frontage of its lands adjacent to the March House property;

· Enter into a Heritage Easement Agreement setting out its obligation to preserve, repair and maintain the March House. This Heritage Easement Agreement will be executed on the date of closing and will be registered on title;

· Engage a restoration architect, to prepare a short-term and longer-term restoration plan, and supervise that work;

· Complete immediate repairs to the March House building, to a maximum of $50,000.00, to ensure that there is no water penetrating the building which could further damage the building, prior to its rehabilitation pursuant to the Heritage Easement Agreement. These immediate repairs will involve restoration of the roof membrane and original roof sheathing, and repointing in accordance with historic masonry specifications of all exterior masonry. It is agreed that should this Agreement not be completed for any reason, the City will reimburse Riotrin for all costs incurred with respect to the immediate repairs;

· Provide a landscaped area on the perimeter of the building, accessible to the public, sufficient to install an exterior display describing the March House. The display will be written and designed by the City and produced, installed and maintained by Riotrin;

· “Front-end” all costs to construct the SWMP and not to request a development charge credit for any lands associated with the construction of the SWMP; and

· Provide municipal water, sanitary and storm sewer services to the March House building.

The widening of March Road requires a storm outlet as noted in this report. In 2006, Council approved $7,000,000.00 of funding for the Front Ending of March Road widening, from Morgan’s Grant Way to Old Carp Road by developers with payback to occur in 2008. After several attempts, Planning Branch and Legal Services staff were unable to secure the developer’s concurrence on the content of the city's standard Front Ending Agreement. As such, the developers will not be front-ending the construction of March Road as approved by Council. Given that the funding for the widening of March Road was introduced into the capital budget in 2008 in accordance with the 2006 Front Ending approval, it is now possible for the City to proceed with the final design and construction of the project. Public Works and Services Staff will be proceeding to finalize the design of the March Road widening project in 2008, with the construction to follow in 2009.

ENVIRONMENTAL IMPLICATIONS

Golder Associates Ltd. was retained to prepare a report entitled “Preliminary Slope Stability Evaluation and Foundation Guidelines March House Relocation, March Road, Ottawa.” This report was directed to both 806 and 812 March Road. The report defined the Limit of Hazard Lands, in terms of a stable slope allowance plus the erosion allowance, which was used to define the eastern property boundary.

The Kanata North Environmental Management Plan prepared by CH2M Hill Ltd., is a comprehensive study that, among other things, defined the storm water management requirements, the Flood Plain and the Meander Belt for Shirley’s Brook. In summary, the Flood Plain Line is located within the defined Meander Belt. Both of these zones are located within the Stable Slope Allowance and the Erosion Allowance described above. The ravine for Shirley’s Brook is vegetated with a variety of trees and shrubs and the significant portion of the treed lands are generally contained within the limit of hazard lands.

This property is designated General Urban in the City’s Official Plan. Shirley’s Brook, which is located to the east of the property, is shown as a Natural Lands linkage in the Greenspace Network, identified in the Greenspace Master Plan (Urban). The stream corridor and the vegetation along its banks will be protected by retaining them in City ownership (defined by the limit of hazard lands which accommodates the set-back from Shirley’s Brook) and implementing storm water management requirements through development review, will ensure that the intent of the Greenspace Master Plan is achieved and that any environmental impacts to Shirley’s Brook and the site vegetation are acceptable.

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. Since the property is to be developed for commercial purposes Housing was no longer interested in this site.

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, and supports staff’s recommendations.

FINANCIAL IMPLICATIONS

This transaction represents revenue of $200,000.00 to the Corporation, which will be credited to the City’s Sale of Surplus Land Account.

SUPPORTING DOCUMENTATION

Attached, as Annex "A" is a sketch showing the surplus property.

DISPOSITION

Following Council’s approval, Real Property Asset Management and Legal Services Branches will finalize the transaction.