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HomeMy WebLinkAboutCSD-07-085 - Market Management Contract ) R Community Services Report To: Date of Meeting: Submitted By: Prepared By: Ward(s) Involved: Date of Report: Report No.: Subject: Community Services Committee September 24, 2007 Keith Baulk, Director of Enterprise Keith Baulk, Director of Enterprise Ward 2 September 19, 2007 CSD-07-085 MARKET MANAGEMENT CONTRACT RECOMMENDATION: That staff proceed to Phase 2 of the Private Management Contract Request for Proposals process for the Kitchener Market as outlined in Report CSD-07-085; and further, That the two proponents who submitted an Expression of Interest in Phase 1 be invited to submit a formal Request for Proposals. BACKGROUND: In June staff circulated report CSD-07-063 recommending that staff investigate the concept of an Arts and Culture Incubator Centre to immediately maximize use of the upper level of the Market. The concept was based on the Arts Incubator Centre as a temporary use of the empty space on the upper level to support the transition to a vibrant permanent urban market facility on that level in 3 to 5 years. At that meeting Council directed staff to investigate the option of an Arts and Culture Incubator but also directed staff to investigate other options. Two additional options were put forward. Staff were directed to determine whether there would be interest by a private management firm to operate the facility and also revisit the concept of a mid to large scale grocer filling the unused space. In September Council met to review the results of the 2008 budget public consultation. During this meeting it was recommended that staff investigate the potential of selling the Market outright to the private sector. The original vision of utilizing the upper level to support a collection of small independent grocery vendors has also been retained as an option. While staff did report in June that a request for proposals coordinated by the City's consultant, Cam Hawkins and Associates did not produce enough viable, quality vendors to support moving in this direction at this time, it does remain an option. Report No: CSD-07-085 2 REPORT: Staff developed a workplan that provides an overview of the 5 potential options for moving the Market forward and summarizes the action steps necessary to investigate each option. The workplan is attached as Appendix #1 . The five options are as follows: Arts & Culture Incubator Centre for the unused space on the upper level. Investigate the potential and request proposals for private management of the facility and Market business. Recruit a large scale grocer to fill the unused space on the upper level. Sell the Market to the private sector Pursue the original vision of small independent vendors The workplan indicates that ultimately a comparative analysis of the options will be presented to Committee for consideration. Private Manaoement Contract This report deals primarily with the opportunity to engage the private sector on a management contract to operate the Market. Updates on the progress of the other options will be shared with Council as the process evolves. A two phase process was developed to investigate the potential of private management for the Kitchener Market. The first phase was an Expression of Interest to determine if there would be private sector interest in managing the facility. The call for expressions of interests for a private operator resulted in proposals from two proponents who both indicated they were interested in advancing to the second phase of the process. Cora Management Inc., a division of the Cora Group and a joint venture company comprised of Prudential Sadie Moranis Realty Limited, Prudential Grand Valley Realty, A. Rosen and Associates, Interblocks Limited and Fyrst Avenue Property Management have submitted Expressions of Interest. The report recommendation suggests that both these proponents participate in Phase 2 and be invited to submit a Request for Proposal. If Council approves the report recommendation a task force including staff and some key stakeholder representatives will be formed to develop the guiding principles and conditions for the Request for Proposal form. However, prior to the Request for Proposal being circulated, the principles and conditions will be presented to council members for consideration at the next meeting of Community Services Committee. To conclude, the Expression of Interest for Private Management of the Market identified 4 key outcomes that a private management firm would have to deliver. These outcomes are as follows: 1 . Continue with the successful Saturday Market 2. Provide a vibrant urban full time Market on the upper level that may include food or other uses compatible with the viability of the downtown and service to its citizens. 3. Improve the financial position of the Market over time. 4. Create a destination that would continue to support re-urbanization of the east end of downtown. These outcomes have been the cornerstone deliverables for this project. In fact the other options will also be measured against these outcome objectives when they are presented. Report No: CSD-07-085 3 COMMUNICATION: Broad based public input was gleaned from the City's budget consultation process. It was clear the Market was an issue and the publics' comments were mostly related to a desire for improved financial and operational performance resulting in a reduced subsidy. In addition citizens expressed support for divestiture of the City's interest in the Market should the City not produce a reduced subsidy. In addition, specific stakeholder input will be sought through the various action streams. For example, stakeholders will be involved during the development of the demand analysis for the Arts and Culture Incubator, and through project team membership for principles and conditions development for the private management and sell options. FINANCIAL IMPLICATIONS: None relating to the process of proceeding with the Request for Proposals for a private management company to operate the Market. CONCLUSION: The report provides a summary of the workplan that will be undertaken to implement councils' direction regarding providing options for the Market. The report also updates council on the status of the private management contract process and requests direction to move to Phase 2 - development of guiding principles and conditions for the Requests for Proposals. Keith Baulk Director of Enterprise AP MARKET OPTIONS ANAL YSIS/wORKPLAN Dated - September 2007 BACKGROUND CURRENT SEPTEMBER OCTOBER NOVEMBER LEAD DESCRIPTION Arts & Culture An interim strategy for WRAC engaged to Undertake needs Complete needs Dec. 3 CSC Karen Killeen Incubator a 3-5 year period that complete a needs assessment assessment Presentation of would lead to a vibrant assessment Continue business case Complete business case business case urban Market Staff project team working on development business case Private Engage a private Phase 1 EOI complete Sept. 24 CSC - recommend Oct. 15 CSC Dec. 3 CSC Keith Baulk Management management firm to Two proponents to be evaluated proponents for Phase 2 approval of RFP Outline options for contract operate the facility and Recommend project team principals private management complete lease out of Outline phase 2 RFP issue RFP of Market space. process Project team to develop process principles Large scal e Recruitment of a single Matrix complete Continue process Continue process Dec. 3 CSC present To be assigned grocery operator major grocery type Contacts being made to recruit large to recruit large status of grocer operator to fill the limited interest to date grocers grocers recruitment process majority of the space Send letters requesting Send letters requesting response response Small Implement the original EOI completed previously assign staff to re-visit assign staff to re-visit Dec. 3 CSC present Ingrid Schiller independent vision of a number of only limited qualified suitable EOI candidates suitable EOI candidates status of small vendors (original independent vendors candidates undertake exercise to undertake exercise to independent vendor vision) providing various food continue search for continue search for option or food related services additional small additional small independent vendors independent vendors Sell the Market Investigate the legal New initiative Form a staff project team. determine the legal Dec. 3 CSC present Keith Baulk framework, appraised framework. the outcome of the Hans Gross value and potential of complete a professional investigation for selling the Market apprai sal of the the sale option facility, business and components garage. engage the City's real estate consultant to provide an opinion