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8. OTTAWA STADIUM (300 COVENTRY ROAD) – REQUEST FOR OFFERS TO LEASE PROCESS
STADE D’OTTAWA (300, CHEMIN COVENTRY) – DEMANDE D’OFFRES POUR LE PROCESSUS DE LOCATION
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That Council:
1. Direct staff to solicit “best offers to lease” to utilize the Ottawa Stadium facility in the long-term, based on the minimum conditions and guidelines described in this report; and
2. Approve the delegated authority to the Director, Real Estate Partnerships and Development (REPDO) to negotiate and enter into an amended agreement with Ottawa Sports Group for the use of the Ottawa Stadium facility in 2012.
RECOMMANDATIONS DU COMITÉ
Que le Conseil :
1. demande au personnel de solliciter les « meilleures offres de bail » visant l’utilisation à long terme des installations du stade d’Ottawa, en fonction des conditions et directives minimales décrites dans le présent rapport; et
2. approuve que le pouvoir de négocier et de signer une entente modifiée avec l’Ottawa Sports Group en vue de l’utilisation des installations du stade d’Ottawa en 2012 soit octroyé au directeur du Bureau des partenariats et du développement en immobilier (BPDI).
DOCUMENTATION
1. City Manager’s report dated 31 October 2011 (ACS2011-CMR-REP-0035).
2. Extract of Finance and Economic Development Committee Minutes of 1 November 2011.
Report to/Rapport au:
Finance and Economic Development Committee
Comité des finances et du développement économique
and Council / et au Council
31 October 2011 / le 31 octobre 2011
Submitted by/Soumis par: Kent Kirkpatrick, City Manager / directeur municipal
Contact Person/Personne ressource : Peter Radke, Manager, Realty Initiatives and Development Branch, Real Estate Partnerships and Development Office/gestionnaire, Initiatives stratégiques en immobilier, Bureau des partenaires immobiliers et du développement
(613) 580-2424 x 12551, Peter.Radke@ottawa.ca
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13 – Rideau-Rockcliffe |
Ref N°:ACS2011-CMR-REP-0035 |
SUBJECT: OTTAWA STADIUM (300 COVENTRY ROAD) – REQUEST FOR OFFERS TO LEASE PROCESS
OBJET : STADE D’OTTAWA (300, CHEMIN COVENTRY) – DEMANDE D’OFFRES POUR LE PROCESSUS DE LOCATION
REPORT RECOMMENDATION(S)
That the Finance and Economic Development Committee recommend that Council:
1. Direct staff to solicit “best offers to lease” to utilize the Ottawa Stadium facility in the long-term, based on the minimum conditions and guidelines described in this report; and
2. Approve the delegated authority to the Director, Real Estate Partnerships and Development (REPDO) to negotiate and enter into an amended agreement with Ottawa Sports Group for the use of the Ottawa Stadium facility in 2012.
RECOMMANDATION(S) DU RAPPORT
Que le Comité des finances et du développement économique recommande au Conseil :
1. de demander au personnel de solliciter les « meilleures offres de bail » visant l’utilisation à long terme des installations du stade d’Ottawa, en fonction des conditions et directives minimales décrites dans le présent rapport; et
2. d’approuver que le pouvoir de négocier et de signer une entente modifiée avec l’Ottawa Sports Group en vue de l’utilisation des installations du stade d’Ottawa en 2012 soit octroyé au directeur du Bureau des partenariats et du développement en immobilier (BPDI).
EXECUTIVE SUMMARY
In 2009, City Council approved a long-term strategy for the overall Ottawa Stadium site as well as a short-term strategy for the existing stadium facility. As part of that approval, staff needs to report back to Council on an implementation plan for that long term strategy. The short-term strategy has been implemented through a lease agreement with the Ottawa Stadium Group Ltd. (OSG). This current agreement with OSG is scheduled to end in 2012.
Recently, City staff has been contacted about the use of the Ottawa Stadium for baseball beyond 2012. Given this recent interest in the long-term use of the stadium facility, an overall assessment study has been completed that identifies various improvements that may be required to secure a long-term tenant for the baseball stadium. As a result of the recent interest in the stadium, staff is proposing that the City move forward with a “best offers to lease” process for the long-term use of the Ottawa Stadium based upon the primary use of the facility being professional or semi-professional baseball.
Securing a long-term professional or semi-professional baseball team for the stadium should not impact the long-term strategy for the overall stadium site. The two (2) key City initiatives that are driving the long-term strategy for overall site are the Light Rail Transit (LRT) project and the Multi-Use Pathway project (connecting Train Station to Coventry Road). Both projects will have an impact on the value and the potential future uses for the stadium site.
The current lifecycle program for the facility identifies a need for approximately $3,900,000 worth of renewals over the next ten years. Prior to a long-term baseball beginning operations at the facility in 2013, a minimum of $700,000 worth of life-cycle renewals would need to be funded and completed by the City. The long-term lease agreement needs to ensure that the City’s contribution to life-cycle is recovered over the period of the lease and that any other facility enhancements will be at the cost of the tenant.
An assessment of the facility for professional baseball operations recommends a number of tasks to be completed at the stadium facility. These tasks address Minor League Baseball (MiLB) requirements, various repairs to stadium components, life-cycle renewals and improvements to enhance the operations and the fan experience at the stadium.
This report sets out guidelines and minimum conditions that should be used for a “best offers to lease” process. Factors including the existing lease conditions, current trends in minor league baseball, minimum requirements of minor league baseball, and existing budgetary conditions within the City were considered in determining the appropriate guidelines and minimum conditions to be required for any offers submitted.
Based on the process and timeline presented in this report, staff anticipates reporting to Council in January 2012 on the results of the “best offers to lease” process and any anticipated costs that the City and the successful tenant/operators will need to incur to be ready for the 2013 baseball season.
RÉSUMÉ
En 2009, le Conseil municipal a approuvé une stratégie à long terme pour l’ensemble des installations existantes du stade d’Ottawa. Cette approbation demandait notamment que le personnel de la Ville prépare un plan d’implantation pour cette stratégie à long terme. La stratégie à court terme a été mise en œuvre grâce à une entente de bail avec l’Ottawa Stadium Group Ltd (OSG). Cette entente doit arriver à échéance à la fin de 2012.
Récemment, on a communiqué avec le personnel de la Ville concernant une éventuelle utilisation du stade d’Ottawa après 2012. Compte tenu de cet intérêt récent pour une utilisation à long terme, une étude d’évaluation globale a été réalisée afin de préciser les diverses améliorations qui pourraient être rendues nécessaires pour qu’un locataire à long terme utilise le stade de base-ball. En raison de l’intérêt récent pour ce stade, le personnel propose que la Ville amorce un processus en vue de l’obtention des « meilleures offres de bail » pour l’utilisation à long terme du stade d’Ottawa, laquelle visera principalement à accueillir des matchs de base-ball professionnel et semi-professionnel.
Pouvoir compter sur une équipe de base-ball professionnel ou semi-professionnel n’aura aucun effet sur la stratégie à long terme prévue pour le site du stade. Les deux principales initiatives de la Ville qui guident la stratégie à long terme pour l’ensemble du site sont le projet de train léger sur rails (TLR) et celui du sentier multifonctionnel (qui reliera la gare ferroviaire au chemin Coventry). Les deux projets auront un effet sur la valeur et sur les utilisations futures possibles pour le site du stade.
Le programme actuel sur la durée de vie des installations précise qu’il faudrait des renouvellements d’une valeur d’environ 3 900 000 $ au cours de la prochaine décennie. Avant le début de la présentation de parties de base-ball pour une longue période, en 2013, un montant d’au moins 700 000 $ pour le renouvellement de la durée utile du stade devra être versé par la Ville, qui devra effectuer les travaux. Le bail à long terme doit assurer le recouvrement de la contribution de la Ville au renouvellement de la vie utile pendant la période de location et faire en sorte que toute autre amélioration aux installations soit à la charge du locataire.
Une évaluation des installations en vue d’une éventuelle exploitation pour la présentation de base-ball professionnel recommande que certaines tâches soient accomplies au stade. Ces travaux permettraient de satisfaire les normes de la Minor League Baseball (MiLB), consisteraient à effectuer des réparations mineures aux composantes du stade, viseraient le renouvellement de la durée utile des lieux, des activités et de l’expérience des amateurs.
Ce rapport livre les lignes directrices et les conditions minimales pour la réussite du processus d’obtention des « meilleures offres de bail ». Des facteurs tels que les conditions du bail existant, les tendances actuelles en base-ball mineur et les conditions budgétaires présentes à la Ville ont été pris en compte au moment d’établir les lignes directrices appropriées et les conditions minimales des offres qui seront soumises.
En fonction du processus et des échéanciers présentés dans ce rapport. Le personnel prévoit faire rapport au Conseil en janvier 2012 sur les résultats de la sollicitation des « meilleures offres de bail » et sur les coûts anticipés que la Ville et le locataire ou exploitant qui l’aura emporté devront assumer pour être prêts à entreprendre la saison de base-ball 2013.
BACKGROUND
On 9 December 2009, Council considered a staff report (ACS2009-CMR-REP-0050) regarding both a long-term and short-term strategy for the Ottawa Stadium property at 300 Coventry Road. Based on that report, Council approved a methodology to produce a long-term strategy for Ottawa Stadium. In addition, a short-term strategy for the interim use of the Ottawa Stadium was approved by Council at that meeting.
The methodology approved by Council for a long-term development strategy included considering a range of options with different development scenarios for the Ottawa Stadium property. These options ranged from maintaining the status quo at the site to re-purposing the stadium facility and developing other sections of the overall site.
The short-term strategy directed staff to proceed with an open and transparent process to receive “best offers to lease” for the Ottawa Stadium facility based on meeting specific minimum conditions set by the City. From that process, the Ottawa Stadium Group Ltd. (OSG) was presented to Council on 24 February 2010 as the lone respondent to lease the stadium facility and Council directed staff to negotiate and execute a lease agreement with OSG. A one-year (1) lease agreement was executed and OSG operated the stadium for the 2010 season primarily for the purposes of its Fat Cats baseball team, which played in the semi-professional Inter-County Baseball League.
On 10 March 2011, Council considered a staff report (ACS2011-CMR-REP-0015) to approve a lease renewal with OSG to operate the Ottawa Stadium facility for 2011. Council approved that renewal and OSG’s Fat Cats baseball team played its 2011 season at the Ottawa Stadium. While the existing lease agreement is set to expire in March 2012, the City has the option to extend the lease to October 2012 to permit OSG’s Fat Cats team to play its 2012 season at the Ottawa Stadium. On 26 October 2011, OSG submitted its request to the City for an extension of the current lease agreement. This extension request, which is currently being reviewed by staff, would extend the end of current agreement from 14 March 2012 to 31 October 2012.
At the same Council meeting on 10 March 2011, Council approved the Environmental Study Report for the multi-use pathway connection between Coventry Road and the Train Station (ACS2011-ICS-PGM-0070). Currently, the pathway design is being undertaken with an estimated completion date of December 2012. Construction of the pathway bridge is anticipated to begin in 2015 or 2016; however, this project will be dependent on construction activities associated with the widening of Highway 417.
In August 2011, the City was contacted by Beacon Sports Capital Partners (Beacon Sports) regarding the possibility of securing the Ottawa Stadium for use by a minor league team affiliated with professional baseball. Staff has formally met with Beacon Sports representatives on two (2) occasions to discuss the process for securing a long-term tenant for the Ottawa Stadium. To ensure an open and transparent process, staff did secure the services of a Fairness Commissioner to be in attendance at the second meeting with Beacon Sports. Based on this recent interest in the facility and to assess the facility’s readiness for affiliated minor league operations, the City engaged International Facilities Group (IFG) to conduct an assessment study of the Ottawa Stadium. That study, which is summarized in the discussion section of this report (and on file in the Real Estate Partnerships & Development Office), includes a detailed visual examination of the existing facility with an assumption that the facility was in compliance with current building and operation codes at the time of opening.
DISCUSSION
As a result of the recent interest in the stadium and the findings of the assessment study, staff is proposing that the City move forward with a “best offers to lease” process for the long-term use of Ottawa Stadium based upon the primary use of the facility being professional or semi-professional baseball. In addition to the recent interest from Beacon Sports staff anticipates that the City will receive interest from the current tenant and potentially other interested parties. While the long-term strategy for the Ottawa Stadium remains unchanged from the direction presented and approved by Council in December 2009, the purpose of the discussion below is to provide Council with a preliminary review regarding a process to potentially secure a long-term tenant for the existing stadium facility.
Long-Term Strategy
Securing a long-term tenant for the baseball field will provide additional direction for the long-term strategy for the overall site at 300 Coventry Road. A long-term tenant for the field and facility will enable the long-term strategy to be focused on possible development options for the parking lot area of the site.
Both the Light Rail Transit (LRT) project and the multi-use pathway project (connecting Train Station to Coventry Road) must be considered in the long-term strategy for 300 Coventry Road. Both projects will have an impact on the value and the potential future uses for the stadium site.
The Business Development Strategy (BDS), with respect to connection and development opportunities at stations along the LRT project corridor, commenced in September 2010 with six (6) public information sessions followed by numerous commercially confidential meetings with individual property owner and developer interests. Through the BDS process, it is known that a number of developers are looking for land and/or development opportunities in close proximity to the thirteen (13) stations shown on the functional design for the LRT project. The Ottawa Stadium site is a large (16.23 acres) site with substantial additional development potential on the parking lot areas, as a minimum, and is also one of the few uncontaminated large sites within two hundred (200) metres of an LRT Station. As a result, this property presents a unique and prime development opportunity if the site is connected by the proposed multi-use pathway to the Transit Station area.
As a unique major urban facility, the Ottawa Stadium will be enhanced by the proposed multi-use pathway that will span the Queensway. While this bridge connection will assist with the economic viability of the stadium property, the new connection will have more significant impacts on the surrounding neighborhoods by improving the mobility connections between two growing communities, improving access to rapid transit and increasing transit ridership, and encouraging Transit-Oriented Development.
At the present time, the Ottawa Stadium property is not conveniently connected to the Transitway Station notwithstanding that the station is located only two hundred (200) metres away from the property. Use of the existing stadium facility, regardless of the nature of the use, cannot be maximized because of the lack of a convenient transit connection and lack of adequate parking facilities in the absence of the transit connection. Given the impact anticipated for the stadium site by both the pedestrian bridge and LRT, any future development on the site would not be initiated until both projects were completed and operational.
Based upon the above information, staff has been finalizing its undertaking of a highest and best use analysis with respect to the future use of the Ottawa Stadium property. If a long-term tenant is secured for the facility, staff would defer this analysis until the latter half of the lease timeframe. Any analysis will need to develop around a long-term lease agreement that may be secured through the process presented in this report.
Existing Lease with Ottawa Stadium Group (OSG)
Currently, OSG operates the Ottawa Stadium facility through a lease agreement with the City that was initially executed in February 2010 and then renewed in March 2011. The present lease agreement is valid through 14 March 2012; however, the lease may be extended to 31 October 2012 at the sole discretion of the City. As part of the existing lease agreement, the City has been receiving a base rent of $108,000 per year and OSG has been responsible for all operating, maintenance, and utility costs associated with the stadium use. In return, OSG is entitled to all facility revenues including advertising revenues. Under the existing lease, all life cycle and capital costs remain the responsibility of the City.
As previously noted in this report, OSG submitted a request to extend the current lease agreement to 31 October 2012. For the City to consider this extension request, the current lease agreement must be amended to allow the City to have access to the facility and make necessary improvements and repairs for any future tenants. Under the existing lease agreement with OSG, the tenant is entitled to quiet enjoyment of the premises and as such the City cannot undertake any work on the stadium unless OSG provides its prior written consent.
City Funded Improvements
The Ottawa Baseball Stadium was built in 1992 and has an expected useful lifespan of seventy (70) years. Based on that lifespan, the anticipated retirement year for the facility is 2062. To maintain this lifespan and the functionality of the basic facility, the City is responsible for ongoing renewal work to be carried out as part of a lifecycle program. This lifecycle program will ensure that the basic structure will be preserved as a City asset, whether baseball continues at the facility or another use is implemented for the facility. Any costs beyond the basic lifecycle program will need to be addressed by a future tenant of the facility.
For the basic structure, the current lifecycle program prepared by Infrastructure Services staff identifies approximately $3,900,000 worth of improvements over the next ten (10) years. No improvements have been scheduled for 2012; however, Infrastructure Services staff has scheduled approximately $700,000 in life cycle renewals for 2013 for the basic structure. Beyond those scheduled items in 2013 for the basic structure, the current lifecycle program identifies an additional $3,200,000 worth of improvements over the next ten (10) years.
If a long-term tenant is secured through this “best offers to lease” process, the City will need to identify funding sources to address the lifecycle renewal program scheduled over the ten (10) years of the lease period. Some of these renewals may need to be accelerated to accommodate a potential tenant prior to its first season at the stadium. The lease agreement will ensure that the City’s contribution to life-cycle is recovered over the period of the lease and that any other facility enhancements will be the responsibility of the tenant.
Assessment of Facility for Professional Baseball Operations
In September 2011, the City retained International Facilities Group (IFG) to conduct an assessment study of the Ottawa Stadium to determine the stadium’s current condition and readiness for professional baseball operations. Rough Order of Magnitude (ROM) cost estimates were provided and classified according to:
Ø Repair and maintenance;
Ø Expected Lifecycle;
Ø Minor League Baseball (MiLB) compliance requirements; and
Ø Improvements suggested to enhance the facility for baseball operations.
Tenant Funded Improvements
Minor league baseball teams that are affiliated with a major league team are required to play in facilities that comply with specific MiLB requirements. While the Ottawa Stadium was originally constructed to comply with such requirements, over the years those requirements have changed and/or elements of the Ottawa Stadium have deteriorated and must now be replaced and/or upgraded. For the Ottawa Stadium to meet current MiLB requirements, the IFG report estimates the total cost to be in the range of $1,400,000 to $2,500,000. Some of the items of note that need to be addressed over the short term to accommodate MiLB requirements include:
Ø Upgrades to the infield playing turf and warning track
Ø Repair, refurbish or replace the food service equipment
Ø Batting cage/tunnel
Ø Updated interior finishes
MiLB required basic improvements are only necessary if a baseball tenant were to use the facility. Therefore, costs related to MiLB basic required improvements should be borne by the prospective tenant.
In addition to analyzing the Ottawa Stadium from the perspective of MiLB requirements, IFG identified possible enhancements that prospective tenants would make to the existing facility and the experience for fans and visitors to the facility. This level of improvement can be considered the industry standard for minor league stadiums, but the decision to make such enhancements would be up to the new tenant of the stadium. IFG estimated the total cost for baseball improvements to be in the range of $3,100,000 to $5,100,000. Of those improvements, a video scoreboard, seating replacement, and a new artificial playing surface represent the majority of these costs.
Best Offers to Lease Guidelines
Since the existing lease with OSG is set to expire in 2012 and given the recent interest in the future use of the facility for baseball, staff is proposing that the City move forward with a “best offers to lease” process for the Ottawa Stadium based upon the primary use of the facility being professional or semi-professional baseball. A “best offers to lease” process enables the City to be open and transparent in its efforts to lease the facility and also allows the City to set minimum conditions for proponents that will be submitting offers.
A number of guidelines, which are described below, are to be implemented in this procurement process to secure a long-term tenant for the Ottawa Stadium. Some of these guidelines will have minimum conditions that must be agreed upon in any offers submitted to the City for consideration. Other guidelines will have benchmarks from which the City will evaluate the level of commitment proposed by the submitted offers. The City’s desired outcome for this “best offers to lease” process will be to secure a long-term user for the baseball field that has a valid business plan that will minimize the City’s financial resources being directed at the stadium facility. Following are the guidelines that are to be addressed in any offers submitted to the City for use of the Ottawa Stadium facility:
Any offer will need to propose a minimum lease term of ten (10) years, with two (2) five (5)-year options to extend available for the City to exercise at its discretion. Given, the anticipated life cycle investments that may be required of the City, a lease term that runs twenty (20) years should be acceptable to prospective tenants;
Any offer must include the participation of a bona fide professional or semi-professional baseball team playing in a bona fide professional or semi-professional baseball league. The successful proponent will be required to exhibit, promote and stage professional or semi-professional baseball games in the stadium facility during each baseball season throughout the term of the lease agreement. As part of its business plan, the successful proponent will need to present a typical schedule of events anticipated for the stadium facility. This schedule should include the total number of baseball games to be played at the stadium as well as any other special events (i.e. concerts, fairs, etc.) anticipated to generate revenue for the tenant. In addition to those uses, the proponent will need to identify in its offer the extent to which the stadium may be available for community use;
The City acknowledges that lifecycle renewals to maintain the basic facility should be the responsibility of the City, and the City will need to identify funding sources for such renewals. Nonetheless, proponents submitting lease offers should consider some type of participation in funding these capital improvements to the facility as it is not uncommon for baseball tenant to partially fund such improvements when operating from a municipally owned stadium facility. Participation could include a one-time payment to the City to partially fund these lifecycle renewals or participation could include regular payments to a capital reserve account. Therefore, any offer will need to indicate if the proponent intends to participate in the funding of basic lifecycle renewals and if so, what form of participation is proposed. Any offer must also indicate those lifecycle renewals that the prospective tenant requires to be completed prior to commencing operation in 2013;
MiLB requires that its affiliated teams operate within facilities that meet certain minimum standards. IFG, through its assessment report, has identified a number of improvements needed at the Ottawa Stadium to meet those minimum standards. Therefore, any offer, whether associated with a professional or semi-professional baseball team, will need to agree to fund and complete those improvements identified in the assessment report prior to initiating baseball operations in 2013. As part of its offer, prospective tenants will need to identify appropriate funding sources to finance the improvements;
Any baseball related improvements that may enhance the facility for the team and/or the fans would be the responsibility of the tenant. A number of such improvements are identified in the IFG report. While these improvements may not be required to operate a professional or semi-professional team at Ottawa Stadium, the assumption is that such improvements will enhance the team’s business model by generating additional revenue for the tenant. Therefore, any offer will need to identify those improvements that will be undertaken and how such improvements will be funded by the tenant;
All operating and maintenance costs will be the responsibility of the tenant. Examples of operating costs may include keeping, maintaining and preparing the playing field as well as baseball equipment and fixtures. These costs should include janitorial and housekeeping services and maintaining: the lighting fixtures, the sound system and scoreboard system, the administrative offices and all other areas of the stadium used by patrons of the facility. Under the current lease agreement with OSG, all operating costs are the responsibility of OSG;
All utility costs will be the responsibility of the tenant. Examples of such costs may include any needed installations, connections, and/or service at the stadium of utilities. These costs would also include ongoing costs to have utility service at the facility. Under the current lease agreement with OSG all utility costs are the responsibility of OSG;
Any offer will need to identify all proposed payments to the City to use the Ottawa Stadium facility. This section should include a guaranteed minimum payment to the City, any type of participation payments or revenue sharing calculations as well as identification of all other sources of revenues that will be generated by the baseball use at the facility. Rights to those other sources of revenues should also be identified in the proposal. Under the current lease agreement with OSG, the City is guaranteed a minimum annual payment of $108,000 per year;
Any offer will need to identify some form of guarantee that will support the obligations being presented by the successful proponent. This guaranty needs to be a primary guaranty of payment and performance and not just a guaranty of collection. This guaranty will also need to be irrevocable, absolute and in no way conditional or contingent;
Any offer will need to acknowledge that Ottawa Stadium site contains only eight hundred and fifty (850) parking spaces and that securing additional off-site spaces will be the sole responsibility of the successful proponent. Any long-term lease agreement will include the use of the existing parking spaces for the initial ten (10) years of the lease agreement. Under the current lease agreement with OSG, the City has not secured any off-site parking spaces in favour of OSG. OSG has indicated that it has secured its own off-site parking agreements with adjacent property owners. Any off-site parking would be the sole responsibility of the tenant;
Any offer will need to acknowledge the condition that the City will be undertaking a long-term development strategy that may impact a proponent’s business operations and parking supply for a certain period of time; however, any such redevelopment activity will not occur during the first ten (10) years of the lease agreement;
To support all of the guidelines highlighted above, any offer must include an overall business plan for the operation of the stadium facility over the life of the proposed lease term. This business plan will need to incorporate projected cash flows and will need to demonstrate the ability to fund any improvement costs as well as all operating and maintenance costs for the duration of the lease term.
Selection Process
The selection of the successful proponent consists of three (3) stages as outlined below. Note that Stage I will be evaluated on a Qualify or Not Qualify basis for each response requirement. This is to ensure the City receives offers from competent and experienced team operators. The three (3) stages are as follows:
Stage I – Mandatory Submission and Project Requirements;
Stage II – Financial Offer;
Stage III – Due Diligence.
Stage I – Mandatory Submission Requirements and Project Requirements
Stage I consists of a review to determine which offers comply with all of the Mandatory Submission Requirements and Project Requirements. Offers that do not comply with all of the requirements will be disqualified and not be evaluated further. Potential proponents must pass all of the Mandatory Submission Requirements and Project Requirements in order to proceed to Stage II, evaluation of Financial Offers.
The Mandatory Submission Requirements and Project Requirements may include but not limited to the following:
· The lease must be for the purpose of playing professional or semi-professional baseball at Ottawa Stadium;
· Proponents must provide a security in the amount of ten percent (10%) of the value of one (1) year’s lease payment.
Stage II – Financial Offer
Lease offers will be assessed for the degree to which they meet the City’s lease guidelines and maximize the financial return to the City. Factors to be considered, but not limited to, will be the term of the lease, advertising, concession and parking revenues, capital improvements, lifecycle costs, operating costs and any other factor deemed by the City to increase the financial return to the City.
The City will apply a Net Present Value (NPV) on the lease offer(s) to determine the Highest Financial Overall Lease Offer. The City retains the right to select the lease agreement it deems to be in the best interest of the City irrespective of the outcome of the NPV.
Stage III – Due Diligence
Stage III consists of a due diligence phase to review the certainty, reasonableness and comprehensiveness of each proponent’s Financial Proposal. The City reserves the right to seek clarification of any of the elements contained in the Offer and to contact the people named in the project references in order to confirm the information provided. Proponents are expected to cooperate in providing clarification on any of the components of their Offer. Proponents that fail to satisfy the due diligence phase will not be given any further consideration.
Subject to the satisfactory completion of the Due Diligence stage, staff will recommend to Committee and Council a preferred offer. The acceptance of the offer is subject to Council approval.
Schedule
Since most professional or semi-professional baseball leagues plan season schedules at least one (1) to two (2) years in advance, staff is proposing an ambitious schedule to secure a professional or semi-professional baseball team for the start of the 2013 baseball season. The proposed schedule to accept and review offers is as follows:
Mid-November Issue Request for Offer package
Early-December Submittal deadline for offers
January Report back to Council on results
Anticipated Costs for a Long Term Tenant
For the stadium facility to be in a condition that is baseball ready from the perspective of MiLB requirements and from a lifecycle improvement perspective, both the City and prospective tenant will need to agree to complete and fund various improvements and repairs to the stadium facility. At a minimum, the City should be prepared to fund and complete all lifecycle costs scheduled for 2013 and related to the basic structure prior to the start of the 2013 baseball season. The tenant should be prepared to fund and complete all MiLB required improvements as well as all other baseball related improvements it deems necessary in its business plan.
RURAL IMPLICATIONS
N/A
CONSULTATION
Staff consulted with the Rail Implementation Office as well as Transit regarding the implications of a long-term tenant and any future construction projects and operations in the vicinity of the stadium site. Infrastructure Services staff was consulted regarding the lifecycle renewal schedule for the facility. Staff collaborated with Public Works and Legal Services regarding this report.
On 29 October 2011, staff informed the President of the Community Council of Overbrook of this staff report, and contacted the President of OSG regarding the status of the report.
COMMENTS BY THE WARD COUNCILLOR(S)
The Councillor is aware of the staff recommendations regarding the process to solicit a request for lease offers for the Ottawa Stadium facility to secure a long-term baseball tenant.
LEGAL IMPLICATIONS
There are no legal impediments to implementing the recommendations in this report.
RISK MANAGEMENT IMPLICATIONS
There are no risk management implications associated with the approval of this report recommendation.
FINANCIAL IMPLICATIONS
There are no financial implications associated with the approval of the report recommendations.
ACCESSIBLITY IMPACTS
N/A
TECHNOLOGY IMPLICATIONS
N/A
CITY STRATEGIC PLAN
N/A
SUPPORTING DOCUMENTATION
N/A
DISPOSITION
Subject to Committee and Council approval, staff will implement the recommendations outlined in the report.
OTTAWA STADIUM (300 COVENTRY ROAD) – REQUEST FOR OFFERS TO LEASE PROCESS
STADE D’OTTAWA (300, CHEMIN COVENTRY) – DEMANDE D’OFFRES POUR LE PROCESSUS DE LOCATION
ACS2011-CMR-REP-0035 RIDEAU – ROCKLIFFE (13)
MOTION No. FED 13/2
Moved by M. McRae
That the Finance and Economic Development Committee approve the addition of this item for consideration by the Committee at today’s meeting, pursuant to Section 84 (3) of the Procedures By-Law (being By-Law No. 2006-462): Ottawa Stadium (300 Coventry Road) – Request For Offers To Lease Process
CARRIED
Gordon MacNair, Director, Real Estate Partnership and Development Office introduced Peter Radke, Manager, Realty Initiatives and Development Branch, who gave a brief summmary which served to provide Committee with an overview of the staff report and recommendations. Chair Watson congratulated his Chief of Staff and Councillors Chiarelli, Clark and Monette for their efforts on this issue.
REPORT RECOMMENDATION
That the Finance and Economic Development Committee recommend that Council:
1. Direct staff to solicit “best offers to lease” to utilize the Ottawa Stadium facility in the long-term, based on the minimum conditions and guidelines described in this report; and
2. Approve the delegated authority to the Director, Real Estate Partnerships and Development (REPDO) to negotiate and enter into an amended agreement with Ottawa Stadium Group for the use of the Ottawa Stadium facility in 2012.
CARRIED