HomeMy WebLinkAboutCAO-12-017 - Land Sale - 83 Elmsdale DriveKITC~HENEI~
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REPORT TO: Committee of the Whole
DATE OF MEETING: April 23, 2012
SUBMITTED BY: Rod Reiger, Executive Director, Economic Development
PREPARED BY: Rob Morgan, Capital Investment Advisor 519-741-2734
WARD(S) INVOLVED: 4
DATE OF REPORT: April 11, 2012
REPORT NO.: CAO-12-017
SUBJECT: 83 ELMSDALE DRIVE - LANDSALE
RECOMMENDATION:
"That the Mayor and Clerk be authorized to execute an Agreement of Purchase and Sale
with Novacore Communities Corporation, In Trust for their acquisition of the City's parcel
of land located at 83 Elmsdale Drive, having an area of approximately 4.88 hectares
(12.06 acres), legally described as Part 1 on Plan 58R-16784 at a total purchase price of
$7,800,000.00; said agreement to be to the satisfaction of the City Solicitor; and further
That the Mayor and Clerk be authorized to execute all documentation required to
complete the transaction, said documentation to be satisfactory to the City Solicitor."
BACKGROUND:
The City of Kitchener has owned the facility at 83 Elmsdale Dr. since the 1950s and used it for
municipal and public utilities purposes. Situated at the intersection of Ottawa Street and
Elmsdale Drive, and adjacent to commercial, institutional and park sites, it is approximately 12-
acres in size consisting of two buildings and a storage yard.
As a result of the establishment of a centralized operations facility (KOF) the Elmsdale property
was deemed surplus to the City's needs and all of the functions of the site were transferred to
the KOF.
The City's Real Estate Service Provider, Coldwell Banker Commercial Peter Benninger Realty
originally marketed the Elmsdale property using a sealed bid process which closed June 25,
2010. A successful purchaser was chosen, however, they were unable to close the deal. Since
that time Coldwell Banker has been actively marketing the property.
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REPORT:
Coldwell Banker has received an Offer to Purchase for the subject property from Novacore
Communities Corporation, In Trust. It is a Hamilton, Ontario based company described as a
"vertically integrated land re-development and construction company that specializes in
transforming urban brownfield properties into high value residential and commercial
developments". Novacore was created to merge the expertise of three successful companies:
Associated Brownfields Inc., Baiocco Construction Corp. and Starward Homes. Each has an
established track record of successful developments and brownfield projects.
The following selection criterion, utilized in the earlier sealed bid process, was considered for
any new offers:
• Perspective Purchaser's development vision of the property, including but not limited to
the density of development, potential employment densities, assessment growth and
adherence to the City's urban design principles.
• Ability of the perspective purchaser to complete the transaction.
• The number and nature of the conditions identified.
• Financial considerations
The City prepared the form of Agreement of Purchase and Sale (APS), for perspective
purchasers to use with the understanding that they could mark up the agreement with their
desired changes for the City to review. The APS was structured as a conditional offer with
conditions to be waived by the Purchaser.
The Key components of the Novacore Offer:
Offer : Novacore Communities Corporation, In Trust
First Deposit - $195,000
Second Deposit - $195,000
Purchase Price - $7,800,000
Development Vision - To be provided within 120 days from execution of agreement.
They are unable to provide a development vision for the property at this time as they will
be performing an in -depth environmental analysis on the property to determine the best
way to utilize the property.
Conditional Offer:
• Requested a "Right to Assign to a wholly owned subsidiary"
• Purchaser has the right not to close the transaction if final Planning approvals are
not acceptable
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The purchaser has requested the following timeframes:
From execution of the Agreement:
1. 90 days for complete environmental testing,
2. 30 days from end of 90 days of environmental testing for preparation of the Concept
Vision as the Vision is determined based on the results of the testing (aka 120 days from
execution),
3. 60 days from end of the 30 days to prepare and submit full Official Plan and Zoning By-
law Amendments as planning applications and required reports can't be initiated until the
Concept Vision is understood, (aka 180 days from execution) and
4. 240 days from execution for the Purchaser to obtain confirmation of Brownfield
qualification and any related conditions thereto (this allows 60 days after full application
submission).
Further to number 2 listed above, the purchaser has requested some time be granted for
them to prepare their concept vision for the property. They would like to finalize their
environmental analysis prior to developing their vision.
PUBLIC PROCESS
Within the terms of the agreement the purchaser is obligated to have commenced a Zone
Change and Official Plan Amendment within 180 days of the City accepting the offer to
purchase.
The proposal will be required to go through the statutory public meeting requirements as
set out in the Planning Act, thereby giving the public an opportunity to provide input and
participate in the development approval process.
FINANCIAL IMPLICATIONS:
It is anticipated that the revenue from this land sale less the real estate fees will go to off set the
costs of the Kitchener Operations Facility.
Land sale Revenue - $7,800,000
Less 4% Real Estate Commission -* $312,000
*Includes 2% commission for the City's agent for complete RFP and negotiation services and
2% for the purchaser's agent.
Total Revenue - $7,488,000
ACKNOWLEDGED BY: Rod Regier, Executive Director, Economic Development
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