HomeMy WebLinkAboutDSD-2024-044 - City-Owned Land Disposition Framework
Development Services Department www.kitchener.ca
REPORT TO: Finance and Corporate Services Committee
DATE OF MEETING: January 29, 2024
SUBMITTED BY: Bluhm, Cory, Executive Director, Economic Development
519-741-2200 ext. #7065
PREPARED BY: Bluhm, Cory, Executive Director, Economic Development
519-741-2200 ext. #7065
Morgan, Rob, Real Estate Analyst
519-741-2200 ext. #7734
WARD(S) INVOLVED: All
DATE OF REPORT: January 18, 2024
REPORT NO.: DSD-2024-044
SUBJECT: City-Owned Land Disposition Framework
RECOMMENDATION:
That the City-Owned Land Disposition Framework, as attached to report DSD-2024-
044, be adopted by Council to guide the future disposition and acquisition of surplus
City-owned lands; and,
That City staff be directed to manage existing and future surplus City-owned lands
as an asset portfolio in accordance with report DSD-2024-044; and further,
That City staff be directed to present disposition and acquisition options to Council,
for consideration at the appropriate time, to advance the strategic priorities contained
in Part 2 of the City Owned Land Disposition Framework, as attached to report DSD-
2024-044.
REPORT HIGHLIGHTS:
The purpose of this report is to establish a framework to guide Council and staff when
considering the disposition and acquisition of land.
The key finding of this report is that surplus and underutilized City-owned lands provide
and are best managed as an
asset portfolio with administrative oversight.
The financial implications are to be considered as specific parcels of land are
considered for disposition or acquisition.
Community engagement included posting of this report to th
Community engagement is expected to occur prior to the disposition of key City-owned
*** This information is available in accessible formats upon request. ***
Please call 519-741-2345 or TTY 1-866-969-9994 for assistance.
lands. Recommendations of this report align with community engagement that was
undertaken as part of the development of the Housing For All and Make It Kitchener 2.0
strategies.
This report supports multiple 2023-2026 Strategic Plan Goal Areas.
BACKGROUND:
The City owns more than 2,000 parcels of land which provide service to the community
through the use of parks, recreation facilities, community centres, trails, natural areas, and
the delivery of infrastructure, stormwater management, transportation and administrative
services. A small number of City-owned parcels currently, or in the future, do not serve such
purposes, are underutilized or may not represent the highest and best use of land. These
parcels provide Council with an opportunity to establish a new portfolio of properties which
can be comprehensively managed as asset to achieve strategic objectives.
As part of the 2019-2022 Strategic Plan, Council directed staff to undertake a City-owned
property review.
REPORT:
Surplus and underutilized parcels of City-owned land provide City Council with opportunities
to advance strategic objectives. This could take many forms, such as:
Conversion to a new use;
Partnership opportunities;
Disposition to achieve a desired new use; and/or,
Sale to generate funding to support a strategic initiative.
However, as land is a finite public asset, it is critical that the City steward surplus lands in a
strategic, well-managed manner that considers both short and long-term needs as well as
disposition and acquisition opportunities.
Managed as an Asset Portfolio
To ensure underutilized land inventory,
staff recommend Realty Services be tasked with oversight of a new City-Owned Land
Disposition Framework, as described in the appendix to this report. The framework includes:
- Objectives of the portfolio;
- Strategic areas of focus (to be determined by Council in alignment with City Strategic
Plans); and,
- A decision making framework (including principles, processes, methods, etc.).
The role of Realty Services is to ensure a consistent approach to land disposition and
acquisition while ensuring
inventory. They would support Council and staff teams to ensure proper processes are
followed, adding an important level of rigour, insight, and due diligence to every transaction.
Realty Services would work in partnership with those teams mandated to advance City-
owned lands for strategic purposes. For example, Economic Development staff would
continue to provide strategic direction on land parcels that advance the objectives of Make
It Kitchener (ex: Bramm lands, Charles Street Terminal lands). Parks & Cemeteries would
continue to lead the advancement of new parkland and Planning would continue to lead
work on affordable housing. Realty Services would ensure consistency and continuity
between these various teams by providing administrative oversight to the portfolio.
Land Portfolio
The number of parcels which could be considered for strategic purposes will evolve over
time as community needs change. For example, lands which currently accommodate
parking may not be required in the future as transportation habits change. Likewise,
community needs will change over time. For example, while the need for land to support
affordable housing is currently high, this may not be the case in 10 to 25 years, should
economic conditions change.
As a result, rather than identify a fulsome set of parcels for the portfolio, staff recommend
presenting Council with subsets of options that corelate directly to an emerging
opportunity/need or a strategic area of focus. For example, should Council seek to bring a
parcel of land to market for affordable housing, staff would provide Council with potential
supply of lands to ensure sufficient opportunities exist for both current and future use.
STRATEGIC PLAN ALIGNMENT:
This report supports Building a Connected City Together: Focuses on
neighbourhoods; housing and ensuring secure, affordable homes; getting around
easily, sustainably and safely to the places and spaces that matter.
This report supports Cultivating a Green City Together: Focuses a sustainable path to
a greener, healthier city; enhancing & protecting parks & natural environment while
transitioning to a low-carbon future; supporting businesses & residents to make
climate-positive choices.
This report supports Creating an Economically-Thriving City Together: Focuses on
growing an agile, diverse local economy powered by talented entrepreneurs, workers
& artists; creating opportunities for everyone and a resilient future that propels our
city forward.
In alignment with the 2023-2026 Strategic Plan, staff have identified 3 initial areas of focus
that the strategic disposition and acquisition of land would support. These include lands to
support affordable housing (Building a Connected City Together), lands to support new
parkland (Cultivating a Green City Together), and lands to support economic development
(Creating an Economically-Thriving City Together). Doing so supports the advancement of
these key Council approved strategies:
- Housing for All
- Places & Spaces
- Make It Kitchener 2.0
FINANCIAL IMPLICATIONS:
Capital Budget The recommendation has no impact on the Capital Budget. As land is
considered for disposition or acquisition, financial implications will be presented at that time.
Operating Budget The recommendation has no impact on the Operating Budget. As land
is considered for disposition or acquisition, impacts to the operating budget will be presented
at that time.
COMMUNITY ENGAGEMENT:
INFORM ebsite with the agenda in advance of
the council / committee meeting.
PREVIOUS REPORTS/AUTHORITIES:
There are no previous reports/authorities related to this matter.
and dispose of land is informed by:
Municipal Act, 2001
Planning Act
APPROVED BY: Dan Chapman, Chief Administrative Officer
ATTACHMENTS:
Attachment A City-Owned Land Disposition Framework
January 2024
Њ
TABLE OF CONTENTS
PART 1 OVERVIEW 3
PART 2 STRATEGIC OUTLOOK (2024-2026)
PART 3
Ћ
PART 1 - OVERVIEW
The City of Kitchener owns over 2,000 parcels of land which provide service to the
community through the use of parks, recreation facilities, community centres, trails,
natural areas and the delivery of infrastructure, stormwater management, transportation
and administrative services. A small number of City-owned parcels currently do not
serve such purposes, are underutilized or may not represent the highest and best use of
land.
These parcels provide Council with an opportunity to achieve the following strategic
objectives:
Objective #1 Manage a set of City-owned Lands as a distinct asset portfolio
City-owned lands should be managed as a portfolio with an emphasis on balancing
dispositions and acquisitions on an ongoing basis to ensure a continuous adequate
supply of options well into the future. To do so requires balancing the following:
Short-term opportunity vs. long-term need balance the use of parcels to
enable short-term opportunities while ensuring a reasonable supply of lands for
future uses, some of which cannot even be anticipated today.
Sales vs. acquisitions ensuring a portion of land sale proceeds are retained
and made available for future land acquisitions. This will position the city to
engage in strategic land acquisition activities which maintain an ongoing
portfolio of land assets.
Community benefit vs. revenue generation ensuring across the portfolio that
lands are utilized to bring about either direct community benefit and/or revenue
for future strategic investments.
Careful management of City-owned lands as an asset portfolio, with a long-term view,
should ensure that decisions are made comprehensively, not simply responsive to a
site-specific opportunity.
Objective #2 - Focus on strategic priorities
The disposition of City-owned lands should be used to advance strategic priorities
and/or major investments. This could include, for example, the sale of lands to
establish new employment lands, new affordable housing, new parkland, etc. Council
may identify such opportunities through the City Strategic Plan and supplemental plans.
For example, Make It Kitchener 2.0 and the Housing For All Strategy both identify the
use of City-owned Lands as a key asset necessary to advance strategic objectives.
Council may also identify groupings of properties which may be considered uniquely.
For example, some properties may facilitate major public-private partnerships while
others, due to their size and configuration, may better serve an adjacent land
Ќ
consolidation. Likewise, Council may identify groupings of properties to target specific
strategic initiatives.
Objective #3 Ensure centralized portfolio oversight by Realty Services
In order to manage these properties as an asset portfolio, centralized corporate
oversight will be critical. While the disposition of specific parcels may be led by a
Division (ex: Economic Development for new employment lands, Parks & Cemeteries
for new parkland), thigh
level oversight of the portfolio. Realty Services will ensure staff and Council adhere to
proper policies and procedures while also ensuring opportunities are maximized and
priorities are balanced across the portfolio. This may include directing focus, attention
and resources on
current strategic priorities.
Objective #4 Maximize the use and value of lands
As City-owned lands are a finite resource, to properly steward the asset portfolio,
Council should always seek to maximize the community benefit derived from each land
disposition. This could take many different forms:
- Maximizing development or the strategic objective for each parcel (including
strategically timing the development);
- On partnerships, maximizing the contribution from partners;
- Retaining public assets (ex: creation of new building space for City use);
- Retaining equity where possible (ex: land leases); and/or,
-
When disposing of lands with no strategic value, land sale values should be maximized
and retained within the asset portfolio to enable the future acquisition of lands.
Ѝ
PART 2 - STRATEGIC OUTLOOK (2024-2026)
For 2024-2026, the following strategic priorities would be the focus for staff:
2.1 Affordable Housing
F-owned lands for
affordable housing and to play a leadership role in advancing innovative mixed-housing
communities. This work aligns with Objective 7 of the Housing Accelerator Fund (utilize
City-owned land to advance affordable housing units). Certain parcels could also be
considered for broader housing partnership opportunities.).
Corporate Strategic Plan Alignment:
Building a CONNECTED CITY together Housing For All implementation.
2.2 Parkland & Open Space
be better served with additional parkland. Parks & Cemeteries will identify opportunities
within the portfolio for enhanced public space.
Corporate Strategic Plan Alignment:
Cultivating a GREEN CITY together Parkland acquisition strategy
2.3 Economic Development
Make It Kitchener 2.0 leverages City-owned land to advance catalytic investments. The
City has already begun work on the Charles Street Terminal lands (in collaboration with
the Region) and the Bramm Yards. The City is also in discussions with Conestoga
College on the development of a future School of Creative Industries. Options being
considered could include the use of City-owned lands. Make It Kitchener 2.0 identifies
the need to utilize land to support the creation of affordable and attainable housing.
Corporate Strategic Plan Alignment:
Creating an ECONOMICALLY-THRIVING CITY together Implement health/medical
technology innovation campus & Develop a creative industries school
Ў
PART 3 - DECISION MAKING FRAMEWORK
The following outlines the various processes and principles that are intended to guide
decision making of City Council and staff when considering the disposition and
acquisition of City-owned land.
3.1 Land Disposition Principles
The sale or disposition of City-owned land should only be considered when:
1. There is no current or future use for the land, or the current use may be moved or
eliminated;
2. The property is underutilized (e.g. a surface parking lot); and,
3. The disposition would help achieve a strategic or core service objective (e.g.
affordable housing).
Where one of the above conditions is not met, additional analysis should be undertaken
prior to considering a sale or disposition.
Where the property contains environmentally sensitive lands or lands of cultural or
heritage significance, any disposition process shall ensure best planning principles are
applied to ensure the proper stewardship of the lands.
3.2 Initiation of a Disposition or Acquisition Process
In general, consideration of land disposition would be initiated as a result of one of the
following:
1. Direction is provided through a Council approved strategic plan or master plan;
2. The Mayor and/or Council has provided direction to staff, either directly or
through a delegation of authority;
3. Staff have identified an opportunity, and obtained Council direction to consider;
4. The periodic review of this strategy.
3.3 Disposition Methods
Wherever possible, the sale or disposition of lands should occur through a competitive
process, using one of the following methods:
1. Competitive Sale (Request for Proposals)
For any large or significant parcels of land, where there is a reasonable
expectation that multiple offers to purchase could be received from private
interests, the City should undertake a competitive process led by Procurement
Services. Where opportunity exists to advance strategic objectives, Council
would identify a vision, objectives and/or criteria to inform the evaluation of bids.
Џ
2. Competitive Sale (simple land sale)
For properties where there is a reasonable expectation that multiple offers to
purchase could be received from private interests, but where there is no ability to
advance a strategic objective, the City should undertake a competitive process
led by Realty Services. In these instances, the intent is to achieve the highest
is basis.
Exceptions to this approach include the following:
3. Direct Sale (public entity)
Where the City is working in partnership with another public entity (e.g. Province,
Region, Educational Institutions, etc.) to advance a strategic objective or facilitate
community infrastructure, a non-competitive process may be utilized.
4. Direct Sale (land assembly or adjacent property owner)
Where a surplus parcel of land is unlikely to receive multiple offers to purchase
and/or the highest and best use of the land can be best achieved through a land
assembly, a non-competitive process may be utilized. Similarly, where a surplus
parcel of land cannot reasonably be developed, and the City is incurring costs to
maintain, the City may consider a direct sale to an adjacent property owner.
Additional considerations include the following:
5. Long Term Land Lease
Prior to initiating a sale process, the City should consider the appropriateness of
a long-term land lease, whereby the City would retain ownership of the land.
This may be most appropriate when the land disposition involves other public
entities or long-standing community organizations (e.g. not-for-profit affordable
housing providers).
6. Retention of a Public Asset
Prior to initiating a sale process, the City should consider the appropriateness of
retaining any assets as part of the transaction. This could include, for example,
the retention of lands for public use (e.g. trails, public spaces) or elements of a
building that could service future needs (e.g. condominium ownership of ground
floor units for community use).
7. Conditional Sales
Where the sale of land is to facilitate development, the City should always
include conditions within the Purchase-and-Sale Agreement that the land would
not transfer until all planning approvals and building permits have been obtained.
The City should always include buy-back clauses where the City would have the
ability to reacquire the lands at a specified discount if the proposed
use/development is not completed within a specified time period.
А
3.4 Land Use and Density Principles
As stewards of public lands, the City has an obligation not to simply achieve fair value
for the land, but to also ensure the appropriate and proper use of the lands. Prior to the
sale of any land, the City should review existing land use and zoning regulations to
assess the benefit of any land use modifications. Such modifications should be
considered if they would advance one of the following:
1. To achieve specific City objectives or priorities;
2. To achieve a greater public benefit; and/or
3. To achieve
Management Strategy.
Rezoning of City-owned lands may be undertaken as part of a broader Official Plan or
Zoning review, through a site-specific process, or as the responsibility of the
purchaser/developer to submit (ex: through a conditional agreement of purchase and
sale). When selecting the proper process, consideration should be given to:
Perceptions the City may be placing financial considerations ahead of proper
planning; and,
Staff resources/costs required to defend an Ontario Land Tribunal (OLT) appeal.
The above principles do not preclude accepting proposals conditional upon the
purchaser securing an Official Plan Amendment or Zoning Bylaw Amendment.
3.5 Disposition Process (for competitive processes)
Where City Council has directed staff to pursue the disposition of land through a
competitive process, staff will follow the following general process:
1. Circulation of the property to be sold to the Property Management Team
and other internal or external stakeholders and subject matter experts, where
applicable;
2.
best use or desired outcome (e.g. strategic objective);
3. Development of a business case (where appropriate);
4. Development of a vision, objectives and/or principles to inform the evaluation of
proposals (where appropriate);
5. Development of a disposition strategy to include the preferred method;
6. Execution of the procurement process by Procurement Services in collaboration
with Realty Services and any project leads;
7. Evaluation of proposals by City staff;
8. Presentation of evaluation results to Council, seeking direction on proposals and
terms of the purchase and sale;
9. Negotiations with proponent by City staff; and,
Б
10. Final approval by Council, with authorization for the Mayor and Clerk to execute
the purchase and sale agreement.
Note - the above noted process may differ due to site specific considerations or
circumstances (ex: where the City initiates a long-term land lease to a not-for profit
organization at a nominal fee). Council approvals may be required at specific stages,
as directed on a site-by-site basis.
3.6 Disposition Process (for non-competitive processes)
Where City Council has directed staff to pursue the disposition of land through a non-
competitive process, staff will follow the following general process:
1. Circulation of the property to be disposed
Team and other internal or external stakeholders and subject matter experts
where applicable;
2.
best use or desired outcome (e.g. strategic objective);
3. Development of a business case (where appropriate);
4. Direction from Council on key terms of the disposition (e.g. price);
5. Execution of the procurement process by Realty Services (in consultation with
Procurement Services where appropriate); and,
6. Presentation of offers to Council, seeking approval, with authorization for the
Mayor and Clerk to execute the purchase-and-sale agreement.
Note - the above noted process may differ due to site specific considerations or
circumstances (ex: where the City initiates a long-term land lease to a not-for profit
organization at a nominal fee). Council approvals may be required at specific stages,
as directed on a site-by-site basis.
3.7 Acquisition Principles
City Council may direct staff to pursue the acquisition of land. Such acquisitions should
be targeted to support one of the following:
1. The implementation of strategic plans and master plans (e.g. Leisure Facilities
Master Plan, Cycling and Trails Master Plan, Make It Kitchener 2.0, etc.);
2. Infrastructure needs in e.g. new
community centre, fire station, etc.);
3. Lot additions to increase the size of existing parcels of land; or,
4. Parcels of land that may not serve an immediate need but which can reasonably
be expected to service future community need.
Acquisitions may take the form of Fee Simple (ownership of all property interests), a
long-term land lease, stratified ownership (e.g. condominium unit) or a building lease.
В
3.8 Acquisition Process
Where City Council has directed staff to pursue the acquisition of land, staff will follow
the following process:
1. Determination of the appropriate funding source;
2. Undertake due diligence to assess the opportunity including an environmental
assessment where appropriate;
3. Circulation of the property to be acquired to the Property Management Team and
any internal subject matter experts to identify constraints;
4. Valuation of the property by Realty Services;
5. Preparation of a business case to support a recommended purchase.
6. Direction from Council on the key terms of the purchase-and-sale agreement
(e.g. price);
7. Upon successful negotiations, approval by Council and direction for the Mayor
and Clerk to execute required agreements.
3.9 Financial Tools and Policies
is sold, Council will specify where the sale proceeds are to be directed. Typically, land
sale proceeds should be directed to the General Land Reserve with the exception of the
following:
1. Reserve Funds associated with strategic objectives (e.g. land sales associated
with Make It Kitchener 2.0 are directed to the Economic Development Investment
Fund 2.0);
2. Reserve Funds associated with core services (e.g. Parkland Reserve, Business
Park Reserve); or
3. Capital accounts associated with strategic objectives or initiatives (e.g. to support
affordable housing initiatives).
Where Council wishes to acquire a parcel of land that is not tied to an existing funding
source or reserve, the General Land Reserve shall be the preferred funding source.
3.10 Leveraging Land Assets
Where the City wishes to advance a strategic objective, Council may consider
leveraging the land value. This could include, for example:
1. Utilizing all or part of the land value as a contribution to another public entity in
accordance with the Municipal Act;
2. Utilizing all or part of the land value to acquire equivalent assets (e.g. capital
assets, units/parcels/buildings within a plan of condominium or subdivision); and,
3. Utilizing all or part of the land value to achieve affordable housing in accordance
with the Municipal Act (to a not-for-profit organization).
ЊЉ
3.11 Summary
The City-Owned Land Disposition Framework is intended to provide Council and staff
with a long-s and
acquisitions are intended to occur over time when opportunities become available or
The above noted principles, processes, etc., will
ЊЊ