3. SOUTH MERIVALE BUSINESS PARK
PARC D’AFFAIRES DE MERIVALE-SUD
That Council approve that $1,338,198 be allocated for the removal of soil from the lands owned by Mercury Centres G.P. Inc. at 3000 Merivale Road.
RECOMMANDATION DU COMITÉ
Que le Conseil approuve l’affectation de 1 338 198 $ à l’enlèvement de terre sur le terrain appartenant à Mercury Centres G.P. Inc. et situé au 3000, chemin Merivale.
1. City Clerk & Solicitor’s report dated 4 October 2011 (ACS2011-CMR-LEG-0018).
Finances et Développement Économique du Comité
Senior Legal Counsel/Conseiller juridique principal
Legal Services/Services juridiques
(613) 580-2424 x21444, firstname.lastname@example.org
Ref N°: ACS2011-CMR-LEG-0018
That the Finance and Economic Development Committee recommend that Council approve that $1,338,198 be allocated for the removal of soil from the lands owned by Mercury Centres G.P. Inc. at 3000 Merivale Road.
Que le Comité des finances et du développement économique recommande au Conseil d’approuver l’affectation de 1 338 198 $ à l’enlèvement de terre sur le terrain appartenant à Mercury Centres G.P. Inc. et situé au 3000, chemin Merivale.
Mercury Centres G.P. Inc. (a Minto company and hereinafter referred to as “Minto”) and Zena-Kinder Holdings Limited own land in the South Merivale Business Park in the general location of Merivale Road and Leikin Drive. A map showing the location of these lands is attached as Document 1. This report is with respect to the removal of soils that have been deposited on these sites and is further to a report approved by Council on 23 January 2008 (Corporate Services and Economic Development Committee Report 18A, Item 1)
The history of the development of the South Merivale Business Park and the facts related to the soil piles is summarized below:
February 1990: Approval of Expropriation of South Merivale Business Park.
1990-1996: Negotiation between Landowners and City of Nepean with respect to terms for the development of the South Merivale Business Park.
1991-1992 (estimated): Removal of topsoil at the South Merivale Business Park and creation of soil piles.
November 1994: Tender and execution of agreement by G.W. Drummond Limited to remove topsoil.
1995: Removal of and payment for 12,000-20,000 cubic metres of topsoil by G.W. Drummond Limited.
1996: Execution of South Merivale Businsess Park Agreement (which provides for the abandonment of expropriation).
January 1997: Revision to agreement with G.W. Drummond Limited to provide for extended timeframe for soil removal and payment.
October 1997: Agreement of Purchase of Sale for purchase of Nepean Lands by JDS Fitel 9 now JDS Uniphase).
1997-2000: Further payments by G.W. Drummond Limited for soil. No evidence soil was removed.
January 2000: Closing of Sale from Nepean to JDS Uniphase (location of majority of topsoil piles)
June 2005: Acquisition by Mercury Centres G.P. Inc. of the site.
Creation and Proposed Disposition of Soil Piles
As noted above, the development of the South Merivale Business Park started in the early 1990’s. At an early point in the process, a decision was made to remove the topsoil from the Business Park. A contractor was retained to scrape off the topsoil from the business park and place it into piles on the site. A primary factor for the creation of the piles was that chemical fertilizer had been applied to the land in the past and, in order to permit the chemicals to decompose, it was necessary for the soil to be left in piles for an extended period of time.
Ultimately, it was subsequently discovered that certain of the soil piles contain significant amounts of clay. It is believed this clay came from the excavation for stormwater ponds, part of the infrastructure required for the development of this area.
A contract was issued by former Nepean in 1994 for the removal of the 120,000 cubic metres of the estimated 160,000 cubic metres on site by 1997, ultimately being amended to provide for the removal of approximately 100,000 cubic metres at the annual rate of 10,000 per year. Ultimately, however, only 12,000 to 20,000 cubic metres of soil was removed.
Development and Sales Agreements for the South Merivale Business Park
Through the first half of the 1990’s, negotiations also took place between Nepean and the landowners within the South Merivale Business Park as to how the development of the Business Park would take place. This ultimately led in 1996 to the approval of a development agreement. The essence of that arrangement is that certain lands in the Business Park would be conveyed by the present owners to Nepean for one dollar. The Municipality would be responsible for providing the Business Park with roads and servicing. The cost of providing this infrastructure was to be offset by the sale of the land that had been conveyed to Nepean.
Ultimately, a large portion of the land that had been conveyed to Nepean to finance the South Merivale Business Park project was sold by Nepean to JDS Uniphase. The Agreement of Purchase and Sale provided that when the sale closed, the soil piles located on the lands being sold to JDS Uniphase would be removed by Nepean. The purchase closed in January 2000. However, as noted above, the soil piles had not been removed
Purchase by Minto and Subsequent Action
As Members of Council are aware, the high technology industry suffered a major contraction after 2000. JDS Uniphase sold their lands in the South Merivale Business Park to Minto. In turn, Minto renovated the facility for future use by the RCMP and constructed a new facility for JDS Uniphase. City staff were approached in 2006 to remove the soil piles where the development was to take place. Ultimately, a thorough research into the history of the development of the area was conducted by staff. This lead to the conclusion, submitted to Committee and Council in January 2008, that the City was responsible for the costs of removing the soils from the Minto lands. The City waived the tipping fees for Trail Road, reimbursed Minto for $500,000 in haulage costs and authorized a further $625,000 for future hauling costs.
To date, 98,055.74 cubic metres of soil has been removed from site at a total cost of $1,487,022.04 with an invoice outstanding in the amount of $37,977.96. A significant amount of soil remains on the Minto property. The Office of the City Surveyor has reviewed the piles, and allowing for a contingency of up to 0.5 metres of soil to be removed below grade, where topsoil had been removed in the past, the City Surveyors office estimates that there are 98,760 metres of soil in the piles on Minto’s land.
Removal of Soil
Minto has arranged for a contract for the removal of the soils during the winter months. The rationale for this is two-fold. First, because the construction industry is less busy during the winter months, a better price can be obtained. Secondly, the clay is easier to work with during the cooler months.
The price that Minto has obtained is $10.85 per cubic metre. A further $2.70 per cubic metre cost will be incurred for handling the soil at Trail Road.
Staff have reviewed the price obtained by Minto and have found it to be reasonable.
In contrast to the soil on the Minto lands which as discussed above contains significant amounts of clay, the soil that was deposited on the Zena-Kinder lands is mostly top soil. There are four possible sources of this top soil:
i) Topsoil removed from the construction of the stormwater pond;
ii) Topsoil removed from the locations where the clay was to be deposited. This would have been done to ensure that the topsoil would not be mixed with clay and therefore allow for the future use of the topsoil;
iii) Topsoil removed from locations where roads and other infrastructure were contructed; and
iv) Topsoil removed from the site in anticipation of development on private lands.
The amount of soil on the Zena-Kinder land, again allowing for a contigency for the need to remove soil up to 0.5 metres below grade, is estimated to be 55,660 cubic metres. Staff will continue discussions with the representatives of Zena-Kinder and submit a further report to Committee and Council.
Discussions have taken place between the City and representatives of Minto and Zena-Kinder with respect to the amount of the remaining soils and exploring if there were any possible for use for such soils other than haulage to the Trail Road facility.
COMMENTS BY THE WARD COUNCILLOR(S)
The Ward Councillor is aware of this report.
RISK MANAGEMENT IMPLICATIONS
There are no risk implications associated with this report.
The 1996 consolidated agreement recognized that certain “off site services” would be required for the property and full development of the business park. The former City of Nepean front-ended the cost of the Clark Bellinger Environmental Facility located within the South Merivale Business Park and fully funded the project using storm water development charges. Approximately 10.24 acres of land was allocated by the various owners in the park, at a cost of $614,400, for the pond. The City intends on using area-specific storm water development charges to fund the removal of topsoil in the park that originated from the construction of the pond. The facility is currently located within the Longfields and Davidson Heights drainage area (Area S-4). Future residential and non-residential development within this drainage area will contribute the growth-related revenue to offset the soil removal costs.
There are no technical implications to implementing the recommendations in this report.
CITY STRATEGIC PLAN
The payments for the haulage will be processed by the Finance Department.
The disposition of the soil at the Trail Road Landfill will be the responsibility of Environmental Services.