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Land Disposition

Potential City of Waterloo Land Disposition 185 King Street South

Council Recommendation Report (June 11, 2018)

The Disposition has closed. The City has received four disposition submissions for consideration. The disposition submissions have been reviewed and evaluated with a recommendation to Council (Report CAO2018-018) on June 11th 2018. The report is available at: Disposition Recommendation Report.

On June 11th, City Council (Committee of The Whole) unanimously approved the Report Recommendations.  

185 King Street South in Uptown WaterlooClick to enlarge a map showing the location of 185 King Street South in uptown Waterloo

The City of Waterloo ("The City") has started a formal process to consider the disposition (land sale) for a 0.36 hectare (0.89 acre parcel) of land for an urban office project. This property (The ARC Property) is located at a major entrance into its downtown (called "The Uptown") directly across a new light rail transit ("LRT") stop (Allen LRT).  

Introduction

Waterloo is located in a Top 25 Startup Ecosystem home to three post-secondary institutions - University of Waterloo, Wilfrid Laurier University and Conestoga College.   Waterloo is also home to large technology (such as BlackBerry and OpenText), financial, advanced manufacturing companies, to many research institutes and world-class incubator programs.

Waterloo has a population of 137,420 in a Region of 594,100 residents.  Since 2010, The City has experienced $3.5 billion in construction value with over $500M construction value in The Uptown. The trend for urban intensification is expected to continue along the ION LRT route which has three stops in The Uptown.

Today, the Uptown has over 475 businesses, more than 3,000 new residential units approved, built and under review (2010-2017), there are over 35 music venues, and experiences a low office vacancy rate. The Potential Land Disposition has been initiated to facilitate an urban office project on The ARC Property located at 185 King Street South based on The Disposition Notice.

The ARC Property and Senior Services Programs

The Arc Property has an existing 1,486 square metre (16,000 square foot) building used as the Adult Recreation Centre (ARC) for Senior Services Programs.  The City of Waterloo has initiated a process to relocate the Senior Services Programs to the Waterloo Memorial Recreation Complex (WMRC) subject to future construction costing and Council decision.  For this disposition process, the continuity of The Senior Services Programs is an important factor and will involve a coordinated approach to service programming, construction timing, property closing, and, Council approval. Council, in its discretion, may refuse to accept all or any proposals to purchase The ARC Property (subject lands). 

Disposition Process - Proposal Deadline Now Closed

The City has initiated a land disposition process based on The Disposition Notice.  The Disposition criteria includes the construction of at least 6,503 square metres (70,000 square feet) new urban office space (with ground floor commercial potential), construction of at least 70 parking spaces in underground parking level, and, accommodating the relocation of the Senior Services Programs. The project must also incorporate a high level of urban design and be an acceptable purchase price. The Potential sale will be subject to Supplemental Conditions and Guidelines and include a submission of a Design Brief package and Disposition Checklist.  A request for the Disposition Checklist can be made by contacting the City of Waterloo by email at 185KingDisposition@waterloo.ca

The Disposition Notice includes the following steps, submissions and timelines:

Step Date
Disposition notice March 21, 2018
Proposal deadline May 8, 2018 - CLOSED
Process June 11, staff report for council consideration

The Disposition runs from March 21, 2018 and the closing date has been extended to May 8th. All eligible submissions must be submitted to the City of Waterloo prior to May 8 at 4:30 p.m.  Disposition Respondents must complete the Disposition Checklist and submit the Disposition Package to 185KingDisposition@waterloo.ca in PDF format less than 10 MB in size. 

A more detailed summary of the disposition steps and processes is outlined in the City's Uptown Land Disposition Proposal for 185 King Street South report (CAO2018-004).

Additional information on the property, such as digital compilation of survey plans, preliminary preconsultation comments, digital copy of the Appraisal, market trends, and, environmental report can be made available through a non-disclosure agreement and emailed to The City at 185KingDisposition@waterloo.ca. Also, Frequently Asked Questions and Answers are posted below and may be updated.

As part of the Disposition process, Council will have the ability to accept, or refuse, any or part of the proposal. Other important information references and links are provided below.  

Council Recommendation Report (June 11, 2018)

The Disposition has closed. The City has received four disposition submissions for consideration. The disposition submissions have been reviewed and evaluated with a recommendation to Council (Report CAO2018-018) on June 11th 2018. The report is available at:  Disposition Recommendation Report.

Disposition Process Information

References and Resources

Uptown Incentives (subject to criteria and eligibility)

Ongoing uptown studies and current development applications

Other Resources

Land survey

Click to enlarge this image of the land survey for 185 King Street South

 

Frequently Asked Questions and Answers

Question 1: Can you clarify if the City's intention is to only permit office/commercial or can the redevelop also include residential provided the minimum office GFA is achieved?

Answer:  The Disposition Notice sets minimum employment (office and commercial) and other criteria.  The Notice does not preclude other use(s) provided the uses are permitted in the zoning bylaw.  Residential uses are not permitted under the current zoning.  The Official Plan contemplates mixed-use buildings, which could potentially include residential uses subject to a zoning by-law amendment.  Any attempts to change or expand the zoning and its regulations (e.g. add residential uses, etc.) are at the risk of the developer as party to an unconditional offer.  The property is being sold as is.  The property cannot be tied up pending a planning application.  A mixed-use building with a residential component could be advanced by a Respondent, however, the building would have to be designed in such a way that the office / commercial component could be constructed without the residential component (in the event residential use permissions are denied).   

A Land Appraisal Report was prepared based on defined criteria using a direct comparison and sales price per square foot of land, and, supported by a development scenario analysis for urban employment use on The Arc Property.  One objective for The City is to achieve a minimum urban employment density, as well as, to achieve or exceed the Appraised land value.  The land value should reflect the proposal (uses).

Question 2: Is the intention that the deal will close on the ARC moving to its new location?

Answer:  The City has approved The Older Adult Recreation Strategy (COM2015-015) and approved a Needs Assessment Study (COM2017-013).  These studies recommend to relocate the ARC Program (senior services programs) to the Waterloo Recreation Memorial Complex (WRMC) subject to future Council funding decision (anticipated spring 2019).  The Disposition would close (with Agreement of Purchase and Sale (APS) provisions) when the new WRMC expansion is built and ready for occupancy.  The goal of The City is to provide a seamless transition between the sale of The Arc Property and future Senior Services Program facility.  The APS would incorporate provisions to accommodate property closing subject to Council's decision.

Question 3:  If this is the case is the successful bidder allowed to proceed with development approvals with the City during the closing period?

Answer:  Following Council's Disposition decision, The Preferred Purchaser would enter into an APS.  The Preferred Purchaser would have authority to preform due diligence work on The Arc Property in preparation of development applications.  The Preferred Purchaser would have the authority to initiate development applications through a contact process.  In all circumstances, The Disposition (sale) of The Arc Property would not fetter the City's development review process or planning approvals / decisions.  The City will establish project milestones in The APS to facilitate the construction of the Preferred Purchaser within reasonable timeframes.  A building permit would not be available until after the property closing, and not until the new Adult Recreation Centre at the Waterloo Memorial Recreation Centre is completed.

Question 4:  Based on the Environmental Information, does the City plan to remediate the site over the next three years in order to issue a record of site condition to the buyer upon close?

Answer:  The City of Waterloo has completed a due-diligence Phase 2 Environmental Site Assessment (ESA) that will be provided to prospective purchasers as background information.  The City will not conduct remediation or risk assessment as part of closing or as part of the real estate transaction.  The property is being sold in an "as is" condition and without warranty about the soil and groundwater conditions. Depending on future desired land use, it is possible that the site could require further study to satisfy all MOECC change of use requirements under O.Reg. 153/04 of the Environmental Protection Act. Prospective Purchaser(s) should seek a qualified professional (QP) opinion on the material provided through the NDA and/or conduct independent due diligence that can be coordinated with the City.

Question 5: Isthere a specific scoring criteria for submissions?  For example is say Team & Past Employment Development Experience worth 40% / Vision 30% / Price 30%? 

Answer: The Land Disposition Criteria are outlined in the Disposition Notice.  The scoring criteria will be based on meeting these criteria, as well as, the supplemental guidelines related to meeting (and exceeding) the appraised land value, meeting the City's urban design expectations, receiving a complete submission (including Submission Checklist and Urban Design Brief).  The submissions will be reviewed for completeness, evaluated and presented to Council for decision.  As a point of clarification, the disposition criteria includes a requirement that at least (minimum) 70 parking spaces be located underground to promote a compact urban form.  This is a minimum underground parking criteria recognizing that additional parking will be required to comply with applicable zoning by-law regulations to be calculated based upon the total square footage of any given proposal.  There are no weighted criteria.  The Submission Checklist includes opportunity to provide additional information in support of the Disposition Submission and could include project experience as part of the overall consideration.  The City will look favourably upon an application with a higher net proceed to The City, however, price is not the only factor.

Question 6:  Can you please confirm the proposed zoning under the City's Second Draft Zoning Bylaw (2017) for this site? The City's Appraisal Report indicates the proposed zoning is U2-81, however, this does not appear to be what is posted on the City's website for the Zoning Bylaw review.  Please clarify.

Answer:  The City of Waterloo is undertaking a comprehensive Zoning By-law Review to implement its 2012 Official Plan Policies.   This review is underway, and a second draft has been prepared for discussion purposes only, and is available on the City's website at www.waterloo.ca/zoningreview.  This second draft is subject to change, and will be modified based on the on-going consultation process, further staff review / refinement, and Council direction.  The first draft of the comprehensive Zoning By-law Review showed the subject property conceptually zoned as (H)U2-81; the Second Draft of the comprehensive Zoning Bylaw Review showed the property conceptually zoned as (H)U2-60.  A third and final draft is expected to be released in near future with updated zoning recommendations that refine land use permissions and performance standards including but not restricted to parking, height and density.   The proposed office is currently a permitted use under existing zoning, and continues to be identified as a permitted use in the proposed draft new zoning bylaw, as contemplated by the Official Plan.   The Purchaser will be purchasing the property as an as-is condition and subject to current applicable zoning regulations.  As indicated above, the draft provisions advanced by the Zoning By-law Review are for discussion purposes only, and should not be relied upon for decision making as they are subject to change.

Question 7:  The planned senior services facility to be completed in 2021. Is the City expecting the closing date for 185 King be after 2021 or will the adult rec facility consider a lease back? It sounds like the sale is subject to the relocation of the senior services. When will this be firm?

Answer: The City has approved a series of Community Services Reports (COM2015-015, COM2017-013, COM2016-017, and COM 2017-030) that directs staff to prepare detailed design and construction drawings for a new Waterloo Recreation Memorial Complex (The WRMC) expansion for Council funding and construction decision in winter 2018 / spring 2019.  If approved, The WRMC expansion would commence.  Based on the Community Service Report recommendations, The potential purchaser would be subject to an Agreement of Purchase and Sale that would close when The WRMC expansion is complete and the Senior Service Program is relocated into the new facility.  Yes, the Land Disposition decision is subject to the approval, and relocation of, the Senior Service programs.  The City could consider an alternative lease-back option for the property however, this would need to follow The WRMC expansion decision and subject to further discussions to the satisfaction of The City.  The Purchaser would be purchasing the property in an as-is condition (with current zoning regulations) and could go firm based on Council's decision.  The City could consider a lease back provision as part of an Agreement of Purchase and Sale discussion.

Question 8 - For submissions that have a Realtor representing the group, will the city apply a discount of 1.75% (the commission being offered) to the price submitted, or is that a separate line item the city has budgeted for? Just trying to ascertain if our group will be a "step behind" on pricing so to speak on pricing if they retain professional counsel.

Answer: The City will evaluate the price of proposals based upon the net proceeds of the sale, after commission.  A maximum total of 1.75% Buyer's Broker Protected commission will be paid to the designated Broker involved as part of the property closing from the sale proceeds.  In normal circumstances, the real estate commission would be paid after closing.

Question 9 - The submission requirements speak to the proposal being emailed no larger than 10mb in size. Due to the graphics and high resolution material, this is going to be very difficult for us to achieve. Please confirm that an email with a link to the documents would also be acceptable.

Answer: Given the electronic file size requirements, disposition submissions may be submitted into separate email submissions less than 10MB in size rather than a single submission.  The City will accept an email link transmission as long as it is submitted prior to the submission deadline and download the documents. 

Question 10:  The latest technical information provided suggests access to the site will be a right-in, right-out from King St. Is this the only access to the site that will be permitted, or will the City also allow access from Caroline St? 

Answer: Based on discussions with The Region of Waterloo, the following vehicular access is planned, and will be supported, on the subject land (185 King Street South) in coordination with registered easements with the adjacent property (181 King Street South) subject to the site plan approval process and applicable standards:

a)      Current access:  One-way access from King Street entrance will be permitted along the shared easements to Caroline Street with right-in only on King, and, full egress on Caroline Street; and,

b)      Future development (185 King Street South):  Through future redevelopment, two-way access is contemplated and will be permitted along the shared easements with restricted right in, right out (RIRO) access on King, and, full movement access on Caroline.

Question 11:  After putting forth substantive effort to pull our submission vision together for 185 King, we would be interested in understanding the next steps / timelines with the process.  

Answer: The City of Waterloo 185 King Disposition proposal submission has closed.  The City is currently reviewing the complete submissions, and will be preparing a recommendation(s) in a staff report to be presented to City Council on June 11 2018.   The submissions include an internal review from two teams and a third party urban design review that will be discussed in the report.  Proponents will be notified about the recommendation(s) once the Report is final.  

Last Update: May 25, 2018. 

More information

Additional information may be updated on this webpage on a periodic basis. Questions regarding The Disposition can be sent by email to 185KingDisposition@waterloo.ca.