3.             CENTRAL CANADA EXHIBITION association - Forgiveness of 2009 and 2010 License fee for lansdowne park

 

                ASSOCIATION DE LÕEXPOSITION DU CANADA CENTRAL Š REMISE DES DROITS DE PERMIS 2009 ET 2010 POUR LE PARC LANSDOWNE

 

 

            COMMITTEE RECOMMENDATIONS AS AMENDED

 

That Council approve the following:

 

1.                  That the 2009 License fee of $280,000 to be paid by the Central Canada Exhibition Association to the city of Ottawa be set aside, when received, in a dedicated reserve fund to be used to help the Association offset the costs of relocation to a new site on the condition that the CCEA allow the City to place a lien (mortgage) on the CCEAÕs Rideau/Albion property to cover the costs of the 2009 License Fee and the costs to the City of providing water and sewer servicing to the site in the event that the CCEA ceases to operate; and

 

2.                  That the Treasurer be directed to forgive 2009 License Fee owed to the City of Ottawa by the Central Canada Exhibition Association (CCEA) as a general revenue when the conditions in Recommendations 1 have been met; and

 

3.                  That the release of funds from the dedicated reserve to the CCEA be conditional upon the City receiving a viable business plan as determined by the City Manager; and

 

4.                  That any funds or other support provided to the CCEA approved by Committee and Council as a result of this report be the last financial support provided to the CCEA by the City;

 

5.                  That the elimination of the 2010 licensing fee payment of $310,000 by the CCEA to the City's Lansdowne Park operating budget be funded from the One-time and Unforeseen account. 

 

 

RecommandationS MODIFIƒES DU ComitŽ

 

Que le Conseil approuve :

 

1.                  Que, ds leur rŽception, les droits de permis 2009 de 280 000 $ que doit payer lÕAssociation de lÕExposition du Canada central (AECC) ˆ la Ville dÕOttawa soit mis de c™tŽ, dans un fonds de rŽserve spŽcial qui sera utilisŽ pour aider lÕAssociation ˆ compenser les cožts liŽs ˆ son installation dans un autre emplacement ˆ condition que lÕAECC permette ˆ la Ville de frapper dÕun privilge (une hypothque) la propriŽtŽ de lÕAECC situŽe ˆ lÕintersection des chemins Rideau et Albion afin de couvrir les cožts liŽs aux droits de permis 2009 et ceux que la Ville devra assumer pour la prestation de services dÕeau et dՎgout sur le lieu advenant lÕarrt des activitŽs de lÕAECC;  

 

2.                  Que le trŽsorier soit enjoint ˆ renoncer ˆ considŽrer les droits de permis 2009 dus par lÕAECC ˆ la Ville dÕOttawa comme une recette gŽnŽrale une fois que les conditions ŽnoncŽes dans la Recommandation 1 auront ŽtŽ satisfaites;

 

3.                  Que le dŽblocage des fonds venant de la rŽserve spŽciale pour lÕAECC soit conditionnel ˆ ce que la Ville reoive un plan dÕactivitŽs que le directeur municipal jugera rŽalisable;  

 

4.                  Que tout fonds ou tout autre soutien accordŽ ˆ lÕAECC et approuvŽ par le ComitŽ et le Conseil municipal ˆ la suite du prŽsent rapport soit le dernier soutien financier accordŽ ˆ lÕAECC par la Ville;

 

5.         Que lՎlimination du paiement des droits de permis de 2010, dÕun montant de 310 000 $, par lÕAECC au budget de fonctionnement du parc Lansdowne soit financŽe ˆ partir du compte des ŽvŽnements ponctuels imprŽvus.

 

 

DOCUMENTATION

 

1.         City ManagerÕs report dated 25 February 2010 (ACS2010-CMR-REP-0011).

 

2.         Extract of Draft Minute, 6 April 2010 to be distributed prior to Council.

 

 

 


 

Report to/Rapport au :

 

Corporate Services and Economic Development Committee

ComitŽ des services organisationnels et du dŽveloppement Žconomique

 

25 February 2010 /  le 25 fŽvrier 2010

 

Submitted by/Soumis par : Kent Kirkpatrick, City Manager/Directeur des services municipaux

 

and Council / et au Conseil

 

Contact Person/Personne ressource : Gordon MacNair, Director

Real Estate Partnerships and Development Office/ directeur, partenariats et dŽveloppement en immobilier

(613) 580-2424 x 21217, Gordon.MacNair@ottawa.ca

 

Osgoode  (20)

Ref N: ACS2010-CMR-REP-0011

 

 

SUBJECT:

CENTRAL CANADA EXHIBITION association - Forgiveness of 2009 and 2010 License fee for lansdowne park

 

 

OBJET :

ASSOCIATION DE LÕEXPOSITION DU CANADA CENTRAL Š REMISE DES DROITS DE PERMIS 2009 ET 2010 POUR LE PARC LANSDOWNE

 

REPORT RECOMMENDATIONS

 

That the Corporate Services and Economic Development Committee recommend Council approve:

 

1.                  That the 2009 Central Canada Exhibition Association (CCEA) License fee of $280,000 to occupy Lansdowne Park, be forgiven under the condition that the funds are to be used to offset the cost to relocate the CCEA to an alternate site; 

 

2.                  That the elimination of the 2010 licensing fee payment of $310,000 by the CCEA to the City's Lansdowne Park operating budget be funded from the One-time and Unforeseen account. 

 

RECOMMANDATIONS DU RAPPORT

 

Que le ComitŽ des services organisationnels et du dŽveloppement Žconomique recommande au Conseil dÕapprouver :

 

1.         quÕil soit fait remise des droits de permis 2009, dÕun montant de 280 000 $, de lÕAssociation de lÕexposition du Canada central en vue de lÕoccupation du parc Lansdowne ˆ la condition que les fonds soient utilisŽs pour compenser les cožts de dŽmŽnagement de lÕAECC ˆ un autre emplacement.

2.         que lՎlimination du paiement des droits de permis de 2010, dÕun montant de 310 000 $, par lÕAECC au budget de fonctionnement du parc Lansdowne soit financŽe ˆ partir du compte des ŽvŽnements ponctuels imprŽvus.

 

BACKGROUND

 

In 2002, the CCEA acquired property on Albion Road shown as parts 1 & 2 on Document 1 for the purpose of moving the fair out of Lansdowne Park.  In anticipation of the relocation, Council subsequently approved a License Agreement for the use of Lansdowne Park for 2003 and 2004, followed by a number of extensions.  The License Agreement was subsequently renewed for 2008 and 2009 with options for three (3) one-year extensions. The City has the right to terminate the License providing notice before May 1st of any given year with vacant possession the following February 1st.  

 

In support of the CCEAÕs relocation to the Rideau Road site, Council directed staff (ACS2002-CRS-RPR-0066) on 28 August 2002 to negotiate terms and conditions related to the CityÕs adjacent site, 23.82 ha shown as part 3 on Document 1 with the CCEA subject to a number of principles, including:

 

- providing the use of Lansdowne Park for its final year of operation at no cost to the    CCEA;

- declaring the adjacent City-owned land surplus for sale to the CCEA;

- providing a grant for the market value of the property to be paid to the CCEA over a five (5) year period;

- providing a $600,000 contribution toward the provision of sanitary and water services;

- the provision of off-setting grants for planning applications, engineering, development  charges and building permits;

- the City to deal with any environmental issues;

- and the provision of transit services to the site during the operation of the fair.

 

Since the Albion and Rideau property is located outside of the urban boundary, it was necessary to amend the Official Plan to allow the extension of a watermain to the site.  As a condition of approving the Official Plan Amendment on 18 December 2002, Council directed that, subject to the CCEA relocating to Albion Road that laterals from the CCEAÕs watermain be extended to the lot line of twelve specified properties on Albion and Rideau Roads at no cost to the property owners.  An account in the amount of $200,000 has been set aside for this work.

 

Until 2002, a portion of the Albion and Rideau property was used for landfill purposes.  The Environmental Protection Act requires that approval is required from the Minister of the Environment to use landfill property within a 25 year period after the landfill is closed.  An application is pending with the Minister of the Environment to use the former landfill footprint area for parking for the proposed CCEA use.

 

In order to service its site, the Rideau Carleton Raceway entered into an agreement to have Urbandale Corporation construct a private sanitary sewer from the RacewayÕs property on Albion Road, then westerly along High Road and Earl Armstrong Road where it outlets into the Riverside South public sewer system.  The design of this trunk sewer was oversized to provide capacity for the CCEA site.  The City has released $600,000 towards part of the CCEAÕs proportionate share of the sewer construction costs. 

 

The Agreement of Purchase and Sale for the surplus 23.6 hectare parcel of City land adjacent to the CCEAÕs property was presented to the CCEA on 4 September 2009. It is currently being negotiated with the CCEA to clarify the terms of the agreement and will be submitted to Council for approval prior to its execution. 

 

DISCUSSION

 

The Lansdowne Partnership Plan (LPP) requires the CCEA to examine its relocation plan and timetable. Council approved, on 16 November 2009 (AC2009-CMR-OCM-0009), the LPP Implementation Plan which requires the CCEA to relocate by 2011. Within the implementation plan is a budget to cover the due diligence to complete Phase I of the LPP Agreement. A budget allowance of $25,000 for professional fees was identified to assist towards the relocation of the CCEA.

 

Given the proposed LPP development schedule, City staff met between the period of November 2009 to January 2010 with CCEA Board members, staff and their consultant to discuss the relocation to the Albion and Rideau Road site, or to any other site that could accommodate the CCEA requirements. To help facilitate the relocation in a timely manner, internal engineering, architectural, planning and real estate expertise was made available to the CCEA.  City staff drafted an outline of requirements for site plan application and the development approval process to help guide the CCEA. This included the engagement of an outside engineering firm to explore servicing costs for the CCEA site. The outcome of the meetings, and follow-up telephone discussions and correspondence, revealed that to complete the necessary studies and plans for a site plan submission the CCEA would have to invest several hundred thousand dollars in professional consulting services.

 

The CCEA is a non-profit organization and, apart from its land holding of approximately 56 hectares, has no substantial assets. The cash reserves on hand essentially cover the outstanding 2009 License fee owed to the City, and approximately $200,000 to support the 2010 fair operating obligations. The CCEA does not have on hand the seed funds to invest in the planning for the relocation process.

 

Subsequent to a meeting with staff on 15 January 2010, the CCEA wrote to the Director of Real Estate Partnerships and Development Office requesting four items. The first was to forgive the 2009 License fee with the understanding that the funds were to be spent solely on relocation expenses. The second request dealt with clarifying the process on how the $25,000 allotted for relocation under the LPP can be accessed. The third request is administrative and dealt with concerns of the CCEA with clauses in the land sale agreement. The fourth item deals with waiving of the 2010 rent and the CCEA recognizes that 2010 is the final year at Lansdowne Park for the Fair and is seeking confirmation of the last day of occupancy.    

 

The authority to forgive the outstanding License fee for 2009 rests with Council. The current tenancy arrangement with the CCEA is under a License Agreement entered in 2008 for two years with three (3) one-year extensions. The agreement provides for a total License fee of $375,000 annually, starting with a baseline contribution of $250,000 paid by the CCEA in 2008 accompanied by a contribution from City Wide Reserves of $125,000.  Thereafter, the contribution from reserves was to decline annually and would be offset by a corresponding increase to the payment made directly by the CCEA. The 2009 payment schedule (inclusive of GST) is a baseline contribution of $280,000 and a contribution from City Wide Reserves of $95,000.

 

Therefore, the total amount of direct financial relief being sought by the CCEA is $280,000. This is over and above the financial assistance the City has already agreed to provide.  As well, in accordance with Council direction of 28 August 2002, the final year of operation of the Exhibition at Lansdowne Park, will be at no cost to the CCEA.   The official Notice of Termination will be given before 1 May 2010 with the CCEA vacating the property in early 2011. The final year of operation for the CCEA SuperEx at Lansdowne Park will be 2010 and will be rent free resulting in a budget pressure of $310,000 to Lansdowne ParkÕs operating accounts.    

 

ENVIRONMENTAL IMPLICATIONS

 

There are no environmental implications related to the recommendation.

 

CONSULTATION

 

This is an administrative matter and therefore, no public consultation was undertaken.

 

COMMENT BY WARD COUNCILLOR

 

Councillor Thompson fully supports the waiver of the rent by the City to the CCEA for 2009.

 

LEGAL/RISK MANAGEMENT IMPLICATIONS

 

There are no significant legal or risk management implications associated with this report.

 

FINANCIAL IMPLICATIONS

 

Since Council approval of the Licensing Agreement with the Central Canada Exhibition Association (CCEA) in 2002, the City has provided financial support in the form of grants and sponsorship totalling $1.035 million which covers the period from 2003 to 2010.

 

In addition, Council has provided a $600,000 capital contribution towards the provision of sanitary and water services to the new Albion Road location.

 

The CCEA has requested that the City forgive the 2009 Licensing Fee of $280,000.  This amount has already been billed and included in the City's 2009 year-end financials. Therefore, should Committee and Council approve this request; it would be recommended that this amount be written off against the City's Allowance for Doubtful Accounts.  This account has an annual allocation of $500,000.

 

The 2002 Agreement with the CCEA also contains a provision that the final year of operation of the Exhibition at Lansdowne Park, would be at no cost to the CCEA.  The staff report states that the City will be notifying the CCEA by 1 May 2010 that this will be the last year of operation for the Exhibition at the Lansdowne site.  The license fee for CCEA in 2010 is $375,000 but the City is in the 6th year of a 7 year grant program that reduced the cost to CCEA for the license fee.  The 2010 grant is $65,000 and funding for this was included in a report to the Audit Budget and Finance Committee on 16 February 2010.  The City's 2010 budget has been developed under the assumption that the CCEA would be making the residual Licensing Fee payment to the City of $310,000.  The elimination of the 2010 fee would result in a funding shortfall within the Lansdowne Park operating budget.  It is recommended that this shortfall be funded from the City's One-time and Unforeseen account.  This account has approximately $1.6 million remaining in it at the time of this report.

 

Should Committee and Council approve the request to forgive the 2009 Licensing Fee, the total financial support to the CCEA including the elimination of the 2010 fee and the capital contribution would be approximately $2.225 million.

 

In addition, the agreement with the CCEA also includes a provision that will require the City to provide off-setting grants for future planning applications, engineering, development charges and building permits, along with the provision of transit services to the site during the operation of the fair.  The specific amounts will be identified in future reports to Committee and Council.

 

SUPPORTING DOCUMENTATION

 

Document 1 Š Sketch outlining CCEA and City property

 

DISPOSITION

 

Following CouncilÕs approval the Real Estate Partnerships and Development Office (REPDO) will confirm in writing to the CCEA the status of the 2009 License Fee payment.

 

REPDO will provide official notice to the CCEA confirming that 2010 will be the last year for the Fair at Lansdowne Park.

 

 


 

DOCUMENT 1