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4. ACQUISITION STRATEGY FOR
BUY-BACK OF BUSINESS PARK PROPERTIES STRATÉGIE D’ACQUISITION EN VUE DU
RACHAT DE TERRAINS DE PARCS D’AFFAIRES |
COMMITTEE RECOMMENDATION
That Council approve the acquisition strategy for the buy-back of business park properties that have not been developed in accordance with the covenants of sale, as outlined in this report.
Recommandation du Comité
Que
le Conseil approuve la stratégie d’acquisition en vue du rachat de terrains de
parcs d’affaires qui n’ont pas été aménagés conformément aux conventions
d’achat, telle que présenté dans le rapport.
DOCUMENTATION
1. City
Manager’s report dated 29 September 2009 (ACS2009-CMR-REP-0028)
2.
Extract
of Draft Minutes from 6 October 2009 meeting of CSEDC.
Corporate Services and Economic Development
Committee
Comité des services organisationnels et du développement économique
and Council / et au Conseil
29 September 2009 / le 29 septembre
2009
Submitted by/Soumis par : Kent Kirkpatrick,
City Manager/Directeur des services municipaux
Contact Person/Personne ressource : Gordon MacNair, Director, Real Estate
Partnerships and Development Office/Directeur, Partenariats et Développement en
immobilier
(613)
580-2424 x 21217, Gordon.MacNair@Ottawa.ca
SUBJECT:
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ACQUISITION STRATEGY FOR
BUY-BACK OF BUSINESS PARK PROPERTIES |
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OBJET :
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STRATÉGIE D’ACQUISITION EN VUE DU RACHAT DE
TERRAINS DE PARCS D’AFFAIRES |
That the Corporate Services
and Economic Development Committee recommend Council approve the acquisition
strategy for the buy-back of business park properties that have not been
developed in accordance with the covenants of sale, as outlined in this report.
Que le
Comité des services organisationnels et du développement économique recommande
au Conseil d’approuver la stratégie d’acquisition en vue du rachat de terrains
de parcs d’affaires qui n’ont pas été aménagés conformément aux conventions
d’achat, telle que présenté dans le rapport.
Business parks were created in order to generate
development of employment-based industries.
All the lots in the Taylor Creek, Iber Road and Kanata South Business
Parks have been sold. The properties
were sold subject to covenants requiring that the sites be developed within a
prescribed period of time. Several
properties have not been developed in accordance with those covenants and the
City can exercise its option to re-purchase the properties.
Two properties in the Taylor Creek Business Park that
were sold prior to amalgamation by the former municipality require that the
properties be repurchased by the City at the original purchase price, less
specified costs. One property requires
that it be re-purchased at the original purchase price.
The covenants registered on title for those properties sold after amalgamation require that the purchaser commence and complete construction within specified periods of time failing which the City, at its option, may require the purchaser to convey the property back to the City free of encumbrances at a price equal to the purchase prices paid, less 20%. One property was recently re-purchased in the Taylor Creek Business Park for $135,036 and has now been sold for $300,000. This property remained vacant for three years after the City originally sold it. The re‑purchase and sale netted additional revenue to the City in the amount of $140,680. It is anticipated that construction will commence in 2010.
Exercising the option to repurchase business park
properties will provide the City with an opportunity to put these properties
back on the market to fulfill the original intent of generating
employment-based industries. The implementation of the strategy will not
result in any costs to the City as the majority of the properties can be
repurchased for less than the original sale price and the market value of
business park properties has increased since these sales were completed.
There
are 14 properties located in the Taylor Creek, Iber Road and Kanata South
Business Parks where the construction start dates set out in the original
covenants attached to those sales have not been complied with. These 14 properties were sold by the City
between 2003 and 2008.
In
order to establish a consistent and fair approach for this strategy, it is
recommended that notification be provided to all business park property owners
who have not complied with the covenants.
The notification will provide an extended period of six (6) months from
the date of notification to commence construction with construction completion
occurring within the prescribed period thereafter as set out in the original
covenant. Should this extended
construction start date not be complied with, the City may invoke its right to
buy-back the properties in order that they may be remarketed for disposal and
development.
Flexibility
in the construction start date will be considered where the owner can
demonstrate their intention to commence development within a reasonable period
of time. Should the City re-purchase
business park properties, individual reports will be prepared for the appropriate
approval. New similar covenants will be
re-registered on the title when the properties are re-sold in order that the
City will retain the option to re-purchase should the new purchasers not
proceed with development within the prescribed period of time.
There are no environment implications with the purchase of these properties.
Councillors Monette, Qadri and Feltmate are aware of staff’s recommendation. No public consultation was undertaken as this is an administrative matter.
There are no legal/risk management impediments to
implementing any of the Recommendations arising from this Report regarding the
acquisition/buy-back strategy. Any
legal issues arising during the buy-back process of each individual property
will be dealt with at that time.
The implementation of the strategy will not result in any costs to the City as the majority of the properties can be repurchased for less than the original sale price and the market value of business park properties has increased since these sales were completed.
Following approval, notification will be provided to each of the affected business park owners by Realty Services.
ACQUISITION STRATEGY FOR BUY-BACK OF BUSINESS PARK PROPERTIES
STRATÉGIE D’ACQUISITION EN VUE DU
RACHAT DE TERRAINS DE PARCS D’AFFAIRES
Councillor Desroches indicated he supported the direction proposed in the report but he asked whether this would be the City’s only strategy for business parks. He asked for confirmation that there would also be some focus on other business parks across, stating that he did not want to leave people with the impression that the business parks referenced in the current report were the only ones on which the City would be taking action. Mr. Gordon MacNair, Director of Real Estate Partnerships and Development Office, confirmed that staff in the Economic Development Branch were working on a report dealing with the employment land strategy, which looked all such lands across the City and where actions needed to be taken. He advised that a report would be coming forward in the coming months.
Following these exchanges, Committee approved the report recommendation.
That
the Corporate Services and Economic Development Committee recommend Council
approve the acquisition strategy for the buy-back of business park properties
that have not been developed in accordance with the covenants of sale, as
outlined in this report.
CARRIED