City councillors gave the green light this week to spend almost $700,000 in various fees and costs to pave the way, ultimately, for the “disposal” of 70 Front St., the Metro Plaza it purchased in 2016 for $9.3 million.
In a closed session Monday night, the city agreed to spend $390,000 “for legal and consultants fees related to the disposal of 70 Front Street.”
In addition to city councillors, the following people were in the closed-session meeting: Robert Wood, Partner, Borden Ladner Gervais LLP, Sheila Botting, Senior Partner/Canadian Real Estate Leader, Deloitte LLP, and Shawn Oakley, Vice President Real Estate Advisory Services, Deloitte LLP.
Coun. Ted Emond, who chaired the council committee meeting that occurred after the closed session, said the discussion was one of several had behind closed doors.
He said some of those issues dealt with personal matters while others were related to property matters.
“Some of the motions we’re dealing with are property matters - property matters that have not been fully negotiated and we put at harm the City of Orillia by disclosing information that is in closed session because it is where we discuss and decide negotiation strategies that we will take of that nature ..so please bear with us,” he said.
In referencing the Metro decision, Emond said: “We will be voting some monies tonight to continue activities that we’ve been undertaking for the past year or two and, over the next several months, the matters we discuss tonight will become public when it is appropriate for them to become public.”
When the Metro matter was voted on in public discussion, Emond acknowledged that it might be difficult for residents to understand why council would make such a decision.
“Without the detail that goes behind them, I understand you may have questions,” said Emond. “ Over the next several weeks, as we move forward in the plan that is being implemented, you will come to understand how your council were spending these monies.”
Councillors then voted unanimously in favour of the decision.
A little bit later, during the open part of the meeting, council OK’d $300,000 to demolish the southern wing of the Metro Plaza even though destruction is not likely to occur until 2020.
The plan is to raze the part of the building south of the Metro grocery store to allow Coldwater Street to run through to Centennial Drive and open up the viewscape to the lake.
It’s part of a larger plan to sell the mall property and almost 10 acres around the site to an as-yet-unknown private developer through a request for proposal (RFP) process.
Council’s preferred vision would see the area transformed into more than 100 new residential units, over 50,000-square-feet of residential and/or commercial space, while “adding a new face to the city’s waterfront” entrance.
To make the property and that plan more palatable to potential developers, the city’s consultants have advised the city to move ahead with demolishing the southern side of the structure “to optimize the sale price” of the property.
“Staff have considered this, but due to current lease provisions and the timing of the sale, staff do not consider a demolition prior to the sale of land to be feasible,” said a report presented to council committee Monday night.
Deloitte, the city’s consultant shepherding the RFP process, has advised: “Ideally, developers would prefer a clean site, but completing minor demolitions is not a problem — if the risks are known.”
In lieu of demolition of the southern portion of the plaza, potential purchasers will want to know if the southern portion of the plaza can be demolished to accommodate new development, who will be responsible for demolition, and how much the demolition will cost, so that they can take this into account when preparing their bids, says the report.
This “de-risking” is likely to not only improve the number and quality of bidders for (the) project, but may result in a direct positive impact to the offer price, the report explains.
With that in mind, staff want to include this information in the RFP documents, which is why they wanted approval from council to commit to the $300,000 demolition.
Council’s decision also gives staff permission to proceed with engineering studies needed in advance of demolishing the building to pad/foundation.
This would allow the city to present the engineering study to potential purchasers at the time the RFP is issued.
“This would reduce uncertainty related to the demolition by identifying any existing hazardous substances which may require special removal,” said the report to council.
The cost for this engineering study, $30,000, was already approved by council last February.
It is not yet known who will be responsible for demolition of the southern portion of the plaza, however, council’s allocation of funds will provide assurance to potential purchasers that the building will either be demolished to its foundation slab by the city or that the purchaser will receive a credit up to the amount of these funds to take on this task (subject to alignment with the Coldwater Street extension plans), said the report.
Ironically, while demolition was approved, council also approved a new temporary tenant for the part of the mall slated for destruction.
Elections Canada has asked to once again set up shop in the plaza for three months during the run-up to October’s federal election.
Elections Canada advised the city they would take the units “as is” and do any cleaning required.
Council approved the plan.
The decision to demolish the building and accept the tenants must be ratified at Monday night’s council meeting.
