Sale Of Surplus Property - 1400 Avenue Road (Otter Loop)
Meeting Date: March 22, 2006
Subject: Sale Of Surplus Property - 1400 Avenue Road (Otter Loop)
It is recommended that the Commission:
1. Approve staff’s rejection of the Offer to Purchase 1400 Avenue (Otter Loop) for $250,000 received January 24, 2006 from Fovere Investments Inc.; and
2. Authorize staff to offer Otter Loop to the City of Toronto for use as open green space by the City of Toronto’s Parks and Recreation Department for a nominal sum with all maintenance by City staff at no cost to the Commission.
The net proceeds from selling Otter Loop on the open market would accrue to TTC and were anticipated to provide a source of funding for future property requirements. Approximately $125,000 of the net proceeds were to have been used to acquire land for a new bus garage (Kennedy/McNicoll). Because actual proceeds from the sale of other TTC properties exceeded estimates, the contribution from the sale of Otter Loop is no longer required to offset the cost of acquiring the Kennedy/McNicoll property. However there are real estate transactions costs including appraisal, survey and other fees and expenses which otherwise would be recovered from the sales proceeds that will become an unbudgeted operating expense if the property is not sold. These costs are not expected to exceed $45,000. There will also be a write-down of the value of the property and a loss incurred equivalent to its value should Otter Loop be transferred to the City of Toronto for a nominal sum.
Otter Loop was acquired by the Toronto Transportation Commission in 1936 for a bus turn around. The property is triangle-shaped and approximately 4,202 square feet or .096 acres in size. A Bell easement runs the width of the property along its northern boundary. A sewer easement takes up the middle third of the property. There is a bus shelter and washroom on the north third of the site and a paved bus loop runs over top of the sewer easement. (See Exhibit 1.)
The Commission declared Otter Loop surplus to TTC’s operational needs on July 15, 1997. In accordance with the City of Toronto and TTC policies for the disposal of surplus land, Otter Loop was offered to City ABCDs. In March 2001, the City confirmed that no municipal interest existed. The Commission then approved selling Otter Loop on the open market in March 2002. The property was prepared for sale then listed, in October 2005 with Colliers Macaulay Nicolls (Ontario) Inc.
On January 25, 2006, the Commission received a request to make Otter Loop a community park. The request was supported by letters from the local councillor, the deputy mayor and the local MPP. Interest was also expressed in including this property in the “Clean and Beautiful City” initiative. As a result of the petition, the Commission requested that staff remove the property from the market and re-circulate it to City ABCD’s for interest.
Real property represents former investments made by the Commission through its riders and should be viewed as a corporate asset. Proceeds from the sale of real estate are a finite, non-renewable resource. By its adoption of Clause No. 2 of Report No. 3 of the Policy and Finance Committee on February 29, March 1 and 2, 2000, Council established a Land Acquisition Reserve Fund (LARF), the City of Toronto’s Policies governing land transactions, the TTC receives all the proceeds from a sale of its property. Appendix “A” to the policy requires that property transferred to the City are accounted for within the capital and operating budgets in accordance with accepted accounting practices. The proceeds would accrue to the title holder and the expense to the acquiring ABCD. Otter Loop has been through the City’s land disposal process. The City would now normally be required to acquire the land at market value if it is needed by an ABCD, from the ABCD’s budget.
TTC staff see little benefit in re-circulating the property to all ABCD’s. Due to the size of the property, it is fully expected that the only other municipal use that is practical for the property is for Park’s purposes. As a result, staff recommend offering the property to the City of Toronto Parks and Recreation Department for use as open space for a nominal sum rather than re-circulating to all ABCD’s.
Otter Loop was appraised and listed for sale in accordance with its estimated market value at $449,000. The property is zoned residential and is able to accommodate a single family house in keeping with those of the surrounding neighbourhood. Otter Loop was first offered for sale in October, 2005. Offers closed on November 15, 2005. One offer was received in the amount of $265,000 (Fovere Investments Inc. (“Fovere”)). City staff indicated that the offer was not recommendable. Accordingly, the property was offered again in January 2006. Offers closed January 24, 2006. One offer was received in the amount of $250,000 (the “Offer”) from Fovere. City staff indicated that the Offer is not recommendable. TTC staff concurred. The Commission is legally obliged to accept or reject the Offer because the property has been listed for sale and the Commission, through its solicitation, has received a bona fide offer. The listing will not expire until March 31, 2006. Rather than cancelling the listing, staff recommend that the listing simply be allowed to expire. Therefore, in accordance with Commission direction of January 25, 2006 and the above TTC staff position, TTC staff advised City staff to reject Fovere’s Offer and allow the listing to expire without renewal.
Lorne London has written to the Commission on behalf of the surrounding community requesting that Otter Loop become a public amenity for the enjoyment of the community. Post City Magazine is willing to pledge $25,000 towards its construction (See Exhibit 2).
As an alternative to offering the property to the City, the Commission could choose to withdraw the property from the market once the listing has expired and place it back on the open market. The location and characteristics of the property are such that it will take time and long exposure in the marketplace for the property to attain a price consistent with its value.
The Commission may choose to continue to hold and maintain the property in more or less its current condition for the time being. This is a “low cost” alternative to the Commission. The Commission would continue to incur maintenance costs for the foreseeable future however maintenance costs would not be significantly altered should the existing bus shelter, washrooms and bus loop be demolished and replaced with grass with minimal on-going maintenance costs.
Staff recommend that the property be offered to the City for use as a park. In the event City Parks is not willing to accept the property, a further report to the Commission would be submitted on a course of action.
While continuing to market the property on the open market would be in the financial best interests of the Commission, obtaining market value for the property is expected to be a lengthy process. To avoid the interim maintenance costs for the property, offering the site to the City for a nominal sum is the most practical and efficient option to bring closure to a property that has been surplus to the TTC’s needs since 1997.
March 22, 2006
P:\Commission Reports\Reports\CR - Sale of Otter Loop - 22 March 06.doc
There are no major disruptions at this time.