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5. LEASE - 1221
CYRVILLE ROAD - ELECTIONS OFFICE BAIL – 1221, CHEMIN CYRVILLE – BUREAU DES ÉLECTIONS |
Corporate Services and Economic Development
Committee
Comité des services organisationnels et du développement économique
and Council / et au Conseil
30 March 2009 / le 30 mars 2009
Submitted by/Soumis par : Kent Kirkpatrick,
City Manager/Directeur des services municipaux
Contact
Person/Personne ressource : M. Rick O’Connor, City Clerk & Solicitor/
Greffier et Chef du contentieux (613) 580-2424 x 21215, Rick.OConnor@ottawa.ca
Contact Person/Personne ressource : Gordon MacNair, Manager, Real Estate
Services, Corporate Project Office/gestionnaire, services immobiliers, bureau
des projets municipaux
(613)
580-2424 x 21217, Gordon.MacNair@ottawa.ca
SUBJECT:
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OBJET :
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That the Corporate Services and Economic Development Committee recommend Council approve the Lease between the City (Tenant) and Sedco Limited (Landlord) for approximately 23,795 square feet of warehouse and office space for an Elections Office located at 1221 Cyrville Road in the City of Ottawa for a term of six (6) years commencing 1 October 2009 and ending on 30 September 2015, for an estimated annual rent of $358,115 with annual escalation.
Que le Comité des
services organisationnels et du développement économique recommande au Conseil
d’approuver le bail entre la Ville (locataire) et Sedco Limited (propriétaire)
concernant un entrepôt et des espaces de bureaux d’une surface approximative de
23 795 pieds carrés aux fins d’un bureau des élections situé au 1221, chemin
Cyrville, dans la ville d’Ottawa, pour une période de six (6) ans débutant le 1er
octobre 2009 et se terminant le 30 septembre 2015 et un loyer annuel estimé à
358 115 $ avec indexation annuelle.
The Municipal Elections Act (MEA), 1996, requires the City Clerk to conduct a regular election every four (4) years to elect members to the offices on City Council and local School Boards. The City Clerk is also required to conduct any by-election(s) that may be necessary within that four (4) year term.
Since
amalgamation, the City has operated its Elections Office in accordance with the
model established by the Transition Board, meaning
that the City of Ottawa does not have a permanent,
event-ready Elections Office. Instead,
there is a small staff complement
to do the work required
between election events and
the office is only fully staffed during the period of the election event. The
Elections Office hires the number of
staff required and it
leases short-term space (eighteen months) for each regular election event. Eighteen
months provides for minimal time for the Elections Office
to be set up, the election process administered and all election records
maintained in a secure environment until their destruction is legislatively
permitted.
During
the period between election events, the Elections Office continues to require
both office and warehouse space (for storage of shelving, automated vote
counting machines, and supplies). Currently, the office space is within a private
landlord facility and the storage space is located within City facilities.
During
an election period, the Elections Office requires ground floor office and
commercial/industrial space with sufficient room
for machine testing, staff and volunteer training and office space. It
must have loading docks and be located within the Greenbelt,
providing a more central location to candidates and citizens. It
must have good access to
major roads and must be near a bus route.
Since
amalgamation, the City Clerk has conducted two regular elections and one
by-election. The regular elections were
held in 2003 and 2006 with the by-election in 2005/06. In
order to find suitable space to administer each election, a considerable amount
of corporate resources have been
required to locate and retrofit these leased facilities.
Since amalgamation, the City Clerk has conducted
two regular elections and one by-election.
The regular elections were held in 2003 and 2006 with the by-election in
2005/06. Due to the lack of a city
owned facility available to conduct election events, buildings were leased on a
short-term basis of eighteen months for each of the regular elections. During the period between election events, the
Elections Office continues to require office space and warehouse space. Currently, the office space is
leased at 180 Elgin Street and the warehouse space, for storage of shelving and
voting machines, is provided within City-owned facilities. In
order to find suitable space to administer each election, a considerable amount
of corporate resources were required to locate and retrofit these leased
facilities.
In
preparation for the 2010 election, Real Estate Services Division commenced a
comprehensive review of Ottawa’s current rental market for short term leasing
opportunities in April of 2008. The low
vacancy rate for this type of leased space within the Greenbelt, combined with
little interest in the market for lease terms under five (5) years, has resulted
in no suitable location being found for a short-term lease. The current leasing market has very limited
opportunities available to meet the Election Office requirements. The industrial vacancy rate within the
Greenbelt was reported as a mere 2.6%
at the end of 2008.
Following
a review of the market, staff is
recommending
adopting an alternative longer-term lease scenario that
addresses the office and warehouse requirements for both the 2010 and 2014
elections with no additional requirement for rental of office or relocation of
election materials between election events.
They have identified
a suitable site that will meet all of the requirements and save nearly
$200,000 over a short-term solution over the
life of the lease.
The
2005/06 by-election for Ward 1 - Orléans was held in the same building as the
2006 regular election. Fortunately, the
Elections Office had already begun its preparations for the upcoming election
in November 2006, thereby allowing for the administration of the by-election to
be conducted within the same facility.
The
Elections Office requires ground floor office and commercial/industrial space
with sufficient loading docks, located within the Greenbelt providing a more
central location to candidates and citizens, good major road access and must be
near a bus route.
Currently, the City leases short term space
(eighteen months) for each regular election event. This provides for minimal time for the Elections Office to be set
up, the election process administered and all election records maintained in a
secure environment until their destruction is legislatively permitted.
During
the period between election events, the Elections Office continues to require
both office and warehouse space (for storage of shelving, automated vote
counting machines, and supplies). Currently, the office space is within a
private landlord facility with storage space located within city facilities.DISCUSSION
The
As outlined above, the City currently does
not have a longer-term facility available
to conduct the administration of elections or by-elections,
and the current
practice is to find short-term space
to accommodate the needs of the election event.
. The integrity of an election and a by-election would
be put at risk from lack of an appropriate available property. If
current practices continue the City may not be able to find suitable
accommodation that is fiscally viable.
In
April of 2008, In
preparation for the 2010 election, Real Estate Services Division commenced began
a comprehensive review of Ottawa’s current rental market for short term
leasing opportunities in preparation for the 2010 election in April of 2008. The low vacancy rate for this type of leased
space within the Greenbelt, combined with little interest in the market for
lease terms under five (5) years, has resulted in no suitable location being
found for a short-term lease.
Further,
the industrial vacancy rate within the Greenbelt was
estimated to be a mere 2.6%
at the end of 2008. Again,
as indicated in the previous section, TReal
Estate Services he
has determined
following the comprehensive review,
that the current leasing market has very
limited opportunitiesvery
little available to meet the Election Office requirements. The Federal Government is actively seeking
the same type of space as the City requires for the Elections Office and this
has created significant competition for quality
accommodations in Ottawa’s Industrial Market that has also allowed Landlords to
require longer term lease commitments.
. The industrial vacancy rate within the Greenbelt is
reported as a mere 3.2%.
The
key to a successful core election office is having adequate warehouse and
training space, as these two components require the most space. The square footage requirement for Elections
Office space has increased with each election because
of the increased administration, training and storage
space required to accommodate
the additional voting locations necessary to meet population growth
demands. On average, the number of
voting locations increases by twenty-five in every election.
As
preparations for the 2010 election are currently underway, suitable space must
be found. The
integrity of an election would be put at risk from lack of an appropriate
available property.
Given
that Real Estate Services has identified that there is no suitable location for
a short-term lease, it is not possible
to move forward on the basis of past practice, where Both
of the past two municipal elections have seen the set-up of a
facility leased for each election event in
addition toand the renting
rental of office space and relocating relocation
of election equipment and material to other storage locations between
elections. Instead,
staff looked at the benefits of undertaking a longer-term lease. . The
purpose of this report is to recommend an alternative longer-term lease
scenario that addresses the office and warehouse requirements for both the 2010
and 2014 elections with no additional requirement for rental of office or
relocation of election materials between election events.
Using
this new approach,
Real Estate Services has negotiated a lease, subject to Council approval,
with Sedco Limited at 1221 Cyrville Road.
. The lease proposal contains the
following:
- Rentable area to consist of 23,795 square feet of office and warehouse space
- Base Rent is $7.75 per square foot ($184,411 per annum)
- Operating costs for the first year will be $1.58 per square foot ($37,596 per annum subject to annual escalations). There will be additional operating costs, not paid to the Landlord, which will include approximately $2.80 per square foot for janitorial, cleaning and utilities ($66,626 per annum subject to annual escalations). The total estimated annual operating costs for the first year are $104,222
- Taxes for the first year will be $2.92 per square foot and subject to increase on an annual basis
- The Term will commence 1 October 2009 and end on 30 September 2015 (covers two regular election events)
- The City will have one option to renew the Lease for four years
The Cyrville Road site is ideal as it requires minimal fit-up to ensure accessibility and corporate standards are met. There is an estimated one time fit-up cost of $223,000.
The
key to a successful core election office is having adequate warehouse and
training space, as these two components require the most space. The square footage requirement for Elections
Office space has increased with each election owing to the increased
administration, training and storage space, required accommodating the
additional voting locations necessary to meet population growth demands. On average, the number of voting locations
increases by twenty-five in every election.
This lease accommodates the estimated 25,000 square foot
requirement for both the 2010 and 2014 elections. Commitment to a lease term beyond six years is not considered
prudent at this time, due
to any potentialgiven
that there is always the potential that future legislative requirements that could significantly impact the
space requirements for the Elections Office.
However, as noted above, the City will have a renewal option should it
decide to extend the lease beyond 2015.
A business case was prepared to
compare the proposed 6-year lease to a short-term lease scenario. This business case illustrates that the
longer-term solution would cost $253,024199,781
less than two short-term leases. As
discussed below, there are several additional advantages to securing these
leased premises for the longer term.
This lease arrangement would
permit the next two elections to be administered from the same facility with no
requirement for relocation to or leasing of office or warehouse space to meet
the non-election period requirements.
As discussed previously, the Elections Office, during this non-election
period, is accommodated by way of leased office space at 180 Elgin Street and a
storage requirement for election equipment and materials that is accommodated
in City's facilities at 655 Shefford Road and 2799 Swansea Crescent. Should
these Although these facilities would
not be utilized
needed by the Elections Office, there is an
ongoing corporate requirement that would
necessitate a demand for this space. means
the spaces will be used by other City services.
If
In the unlikely event that Real Estate
Services was was
able to find a property owner willing to entertain a short-term lease
proposal for a property that meets the needs of the Elections Office, there
would be an additional requirement for Real Estate Services to find
office/storage space during the non-election event cycle,
as the current lease for 180 Elgin Street ends in April 2011.
The proposed facility meets
critical criteria for the Elections Office space, including location within the
Greenbelt, sufficient parking for staff and visiting members of the public to
accommodate the election night influx of volunteers, access to public transit,
at grade and truck level loading. In
addition, this centrally- located
accommodation will provide a training area that will permit larger class sizes
resulting in a reduction in training sessions from 58 to approximately 35 for
the 3,000 workers and other volunteers with an estimated savings of $22K per
election event. The longer-term lease
also ensures that should a by-election be called during the 6-year period,
there is secured space to meet the requirement in this low- vacancy market. In the absence of a secured space for the
Elections Office, it is very costly to administer a by-election with the need
to lease and fit-up appropriate space on a short-term basis. Finally,
in between election events, a portion of the space could be used by the City
for swing space, thereby potentially
reducing some
future costs
associated by other moves.
Research of other major Canadian cities, including Vancouver, Edmonton, Calgary, Toronto, Hamilton and London, has demonstrated that permanent or semi-permanent facilities have been established to administer their municipal elections. These cities were increasingly finding themselves in similar situations as Ottawa, where no adequate facilities were available. In order to mitigate this problem, these cities either purchased a facility or entered into a long-term lease arrangement.
For
the reasons as noted above staffStaff
is therefore are
recommending that the City enter into a six- year lease for the Elections Office
requirement, for a savings of nearly $200k over the term of
the lease. .
No public consultation was
required as this is an internal administrative matter. The Ward Councillor is aware of this
project. Make sure that the local ward councillor is briefed
– Cathy will speak to Leslie about this and will advise.
There
are no legal/risk management impediments to implementing any of the
recommendations in this Report.
Funds are available in the Election Reserve.
Real Estate Services and Legal Services will finalize the necessary Lease documentation.