HomeMy WebLinkAboutCAO-10-035 - Restrictive Covenant - 290 King St E1
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REPORT TO: Committee of the Whole
DATE OF MEETING: October 4, 2010
SUBMITTED BY: Rod Regier, Executive Director of Economic Development
PREPARED BY: Corey Bluhm, Manager of Downtown Community
Development
Lesley MacDonald, Director of Legal Services & City Solicitor
WARD(S) INVOLVED: N/A
DATE OF REPORT: October 4, 2010
REPORT NO.: CAO-10-035
SUBJECT: Direction re Restrictive Covenant - 290 King Street East
RECOMMENDATION:
"That the City of Kitchener not enforce the restrictive covenants on 290 King Street East as it
pertains to the use of Unit 102, a portion of the ground floor, for a dental office, subject to the
conditions set out in Report No. CAO #10-035:
BACKGROUND:
Staff have received a request to modify a restrictive covenant to 290 King Street East. The
building is currently owned by Barrel Works Market Shops Inc, and forms the north-west corner
of the Kitchener Market complex (located at the corner of King & Eby). The owner wishes to sell
the building to a interested buyer who plans to set up a dental office in unit 102, which faces
King Street and the Piazza. As part of the development of the Market, restrictive covenants
were placed on this building that permit only retail and restaurant uses on the ground floor. In
order to accommodate the dental office, the owner requires relief from the City of Kitchener of
this covenant.
REPORT:
City staff have reviewed this request and offer the following comments. While the dental office
will bring new customers to the core, staff believe that the dental use is not an ideal use for the
ground floor of 290 King Street East. Staff question the direct spin off benefits this use will
provide for existing businesses, and feel that retail and restaurant uses remain the preferred
end use. However, staff do appreciate the challenges of leasing this space, which has sat
vacant since its construction in 2004. It is our understanding that the current owners have
undertaken extensive efforts to lease the space but have been unsuccessful in signing a retail
or restaurant tenant. In light of these challenges, staff recommend the following:
1) That Council not amend the restrictive covenant as it would necessitate the preparation of a
stratified reference plan showing the portion of the property to which new would be amendibg
the restrictive covenant, at a significant cost; and further:
2) That Council pass a resolution not to enforce the restrictive covenants on 290 King Street
East as it pertains to the use of Unit 102, a portion of the ground floor, for a dental office, subject
to the following conditions:
i) That the dental office shall only occupy unit 102, being the south easterly unit with direct
access to the Piazza;
ii) That at no time shall the dental office occupy more than 1,700 square feet;
iii) That at not time shall the dental office place any permanent glazing on the exterior windows
of their unit;
iv) That this exemption shall only apply to a dental office owned and operated by Alex Tan; and
that in the event that Alex Tan shall cease to own and operate the dental office, the restrictive
covenants will be enforced so as not to permit a subsequent dental office, unless the owners of
290 King Street East can demonstrate to City Council that there remains limited demand for
retail and restaurant space, upon which City Council may extend this exemption to a
subsequent owner; and
v) That the restrictive covenants shall be enforced for unit 101, in perpetuity, being the north
westerly unit with direct access to King Street East and Eby Street, measuring approximately
2,564 square feet.
Staff feel this approach provides a logical compromise which will allow the immediate use of the
space as a dental office while retaining the long term intent to see the space used for a
restaurant or retail use.
FINANCIAL IMPLICATIONS:
N/A
CONCLUSION:
Staff feels that under the circumstances the approach recommended above provides a
reasonable approach and would facilitate the sale of this property.
ACKNOWLEDGED BY: Rod Regier, Executive Director of Economic Development