Date: October 25, 2016

Transcription

1 THE CORPORATION OF THE TOWN OF GRAVENHURST To: Planning Council From: Glen B. Davies, C.A.O Subject: Muskoka Regional Centre Selection of Proposal for Negotiations Report No. ADM RECOMMENDATION The Chief Administrative Officer, in consultation with the Muskoka Regional Centre Review Committee, recommends the following: PURPOSE THAT Maple Leaf Schools be accepted as the successful proponent resulting from the Request for Expression of Interest (RFEOI) process recently undertaken related to the Muskoka Regional Centre; AND THAT THE Chief Administrative Officer be authorized to enter into negotiations with Maple Leaf Education Systems for the purpose of creating a partnership to acquire and develop the MRC lands; AND THAT once the partnership agreement is prepared in draft form, the Chief Administrative Officer report back to Council on the proposed terms and conditions to seek Council approval. The purpose of this Report is to have Council approve a preferred partner stemming from a Request for Expressions of Interest (REOI) regarding the Muskoka Regional Centre. The Report further provides authorization to enter into negotiations with the preferred partner for the purposes of establishing a draft partnership agreement. This Report is being submitted to Council on behalf of the Selection Committee appointed by Council for the purposes of reviewing the submissions received by the Town as a result of a REOI, and for providing a recommendation to Council. BACKGROUND AND ANALYSIS The Process The lands known as the Muskoka Regional Centre are owned by the Province of Ontario and have been home to several health care type facilities for over a hundred years. The Muskoka Regional Centre, the last of the facilities, permanently closed in The property has not been fully utilized since that time and although, in theory, has been available, the province has only just recently formally declared it surplus.

2 This led staff to submit an expression of interest as part of the province s disposition process in December, 2015 to ensure that the Town s interests could be explored. In April and May of this year the C.A.O and other senior staff met with officials from the Ministry of Economic Development, Employment and Infrastructure (including Infrastructure Ontario), which led in part to the Town securing exclusive rights to negotiate the acquisition of the property. Subsequently, on June 21, 2016 Council gave direction (Report No. ADM ) in the form of the following resolution: THAT the Town of Gravenhurst enter into negotiations with the Province of Ontario through Infrastructure Ontario to acquire the property known as The Muskoka Regional Centre ; and, THAT the town enter into a non-disclosure agreement with Infrastructure Ontario to facilitate the negotiations; and THAT the Town undertake a public process to secure a partner to acquire and ultimately develop the property; and THAT the Mayor and Clerk be authorized to sign the Non-Disclosure Agreement on behalf of the Corporation. The Mayor and Clerk signed the Non-Disclosure Agreement on behalf of the Corporation allowing the process to begin. On July 28, 2016 the Town released a Request for Expressions of Interest (RFEOI) in an effort to seek partnership to purchase and redevelop the site of the Former Muskoka Regional Centre site. This RFEOI contained a number of elements that were to inform and detail expectations for proponent proposals: Background and Project Summary Legal Description Project Scope Project Guidelines Submission Requirements and Timing for Proposals Inquires General Terms and conditions Site Photo Excerpts from the Official Plan and Zoning By-law The Optimal Use Study Responses to the RFEOI were required to be submitted by September 16, 2016 at 12:00 p.m. (noon) and were to include a proposal to purchase, respondents qualifications and answers to the list of evaluation criteria.

3 The RFEOI was marketed using a variety of channels. Advertisements were placed in the Society for Industrial and Office Realtors (SIOR) newsletter and the Real Estate News Exchange (Renx) website and newsletter each with significant national and international reach. In addition to advertisements, the Town distributed a news release to nearby media which included the link to the EOI and background information. The RFEOI was shared through Town of Gravenhurst social media and an advertisement was placed in the Gravenhurst Banner. From July 28 until September 16 there were 363 different users who accessed the RFEOI page on the Gravenhurst.ca website. As part of the process a site visit was set up with the assistance of the owner (Infrastructure Ontario) to allow prospective parties the opportunity to walk the property and ask questions regarding the buildings and property itself. Eighteen people attended the site visit representing thirteen different organizations. Reponses Received As a result of the marketing of the RFEOI, three formal proposals were received by the deadline. The responses were opened by staff September 20, Staff created summary fact sheets and created a binder for each of the committee members named in the September 20, 2016 Council Report. This committee included: Mayor Donaldson, Deputy Mayor Watson, Councilor Jorgensen, C.A.O., Glen Davies, Director of Development Services, Scott Lucas, Business Development Coordinator, Jeff Loney and Renato Romanin (consultant). Binders contained the following information: Committee Meeting Agenda Request for Expression of Interest Land acquisition and Non-Disclosure Agreement Report Copy of each Proposal One-Page Summary of each Proposal Scoring Sheet for each Proposal The following is a summary of the proposals received. All offers were evaluated and considered, however, the Review Committee saw some uses as better value propositions for the locations. # Development Concept (summarized from submissions) 1 This proposal envisions creation of an international centre of excellence for creativity and innovation in the arts, healthcare and life-long learning. The proposal would include facilities for the arts, healthcare and education, ancillary housing and accommodations, culinary arts and chef school. The proposal is based on a well-established model and being brought forward by a charitable organization. The proposal did not include an estimate of value for the project nor a count on the number of jobs that would be created. The funding source is anticipated to come from fundraising and partnerships with a developer to create the proposed development. The proponent did not include a timeline for this project. 2 This proposal wanted to build and operate a world-class and technologically and unique research

4 facility. The proponent would like 4.4 acres of the site and would build a two-story building focused on research, inclusive of a library and food service facilities. Future development would include ancillary housing and accommodations. It is proposed that the building will be built to environmentally friendly standards. Unique to Canada, this proposal was brought forward by a registered not-for-profit. The proposal estimates that the value of the development to be approximately $42 million. In terms of employment the proposal estimates that when the facility is fully operational a staff of approximately 64 would be required to maintain and service the facility. Beyond initial construction and ongoing staffing the proposal estimates that it will create spin-off jobs in tourism, accommodation, transportation, property management and food and beverage services. Funding for this project would be raised through available Provincial, Federal and private foundation grants. The proponent acknowledged that they are in early stages of development and planning for this project and did not include a timeline. 3 This proposal includes an educational facility that would include academic spaces, administrative offices, athletic facilities, performing arts space and full dormitories. In addition, the respondent is proposing contextually sensitive dwelling units in the form of low rise condominiums. Public park land and naturalized trail systems are also included in the proposal. This proposal is based on a well-established model, and has been brought forward by a company involved in similar projects. The proposal estimates that this development will cost just over $100 million. They anticipate that $400 million would be spent in operations of the school over a period of 25 years. Construction is anticipated to directly result in 200 jobs over the course of construction and cost nearly $40 million in labour income. Indirect and induced incomes are estimated to produce approximately 370 jobs. Employment at the location, when fully operational, is expected to employ more than 200 people (approximately half of which would be teaching positions). The proponent is proposing funding the project with their own capital that they have secured through similar operations. The developers appear to have the financial capacity to fund a development of this magnitude. If required they are in the position to receiving funding from tier-1 lenders. The proposal included a timeline that included negotiations and constructions occurring well within the timelines. Construction would be proposed to start in November, Each proposal was scored using ten evaluation measures. Each measure was weighted differently depending on its priority. Each member of the Review Committee independently filled out a score card for each of the proposals. The table below shows the evaluation measure and the weighting it received. Evaluation Measure Weight The potential for the proposed development to sustainably contribute to Gravenhurst s 5 economy The potential for the proposed development to offer employment opportunities to 5

5 Gravenhurst residents Compatibility with the values expressed in the Town of Gravenhurst Official Plan 5 Qualifications and relevant experience of the proponent, including developments in 5 comparator communities Responsiveness to the requirements of the EOI 3 Demonstrated knowledge of Gravenhurst 3 Demonstrated knowledge of planning regulations and framework in the Province of Ontario 3 Creativity as the approach to the project 4 Demonstrated ability to complete work within timelines 4 Demonstrated financial capacity to bring the project to fruition 5 The Committee met on two occasions in order to come to a decision. The first meeting occurred on September 29, This meeting started with an introduction from the Chair (Deputy Mayor Jeff Watson) and a declaration of pecuniary interests (none were noted). The decision making process for the Committee was outlined and the contents of the support material were discussed. Committee members, being of equal standing, were asked to score each proposal individually and bring their results to the following meeting. The second meeting of the Review Committee was held on October 6, The Chair (Mayor, Paisley Donaldson) inquired as to any declarations of pecuniary interest (none were noted). Member s then submitted their individual scores and totals were documented and communicated. Final Committee Recommendation The Review Committee came to a unanimous decision upon reviewing the proposals received. It was felt that Maple Leaf School s proposal brought the highest level of economic benefits and employment to the area. In addition to other qualifications, this proposal appeared to be most ready to implement their development plans, and appeared to have the necessary means (financial and otherwise) to do so. As a result of a number of criteria, the Review Committee is recommending that the Maple Leaf Schools proposal be accepted as the successful bid, and that further details be developed through the negotiation process. While not part of the formal evaluation process and criteria, the Committee noted that the preferred proposal included a number of community benefits that enhanced it s the overall value. These elements include space for a potential development in partnership with a local non-profit organization; the development of a trail system through a dedicated park space at their expense, and a commitment to make some of their facilities available to the community where feasible, including playing fields. In addition, the proponents would be interested in initiating discussion with the Town in regards to the potential opportunity for a new outdoor ice rink on the property. It is important to note that while there is strong support from the Committee in putting forward the aforementioned Recommendation, it is for a concept only, and more detailed plans will need to be developed as part of the negotiation process, and certainly before Council is asked to make decisions

6 on further approvals. Part of the future decision-making may also include any approvals that may be required/requested from a Land Use Planning perspective. In the event Council endorses the Committee s Recommendation, the following summarizes immediate next steps in the process, including potential timelines: 1. Negotiation of a draft partnership agreement with Maple Leaf Schools this will necessitate Council approval to proceed, and would include direction to Administration to enter into negotiations with the Province of Ontario represented by Infrastructure Ontario (I.O.) for the purposes of acquiring the property (November - December, 2016). 2. Negotiations with I.O. to determine tentative, agreed upon, terms and conditions for the acquisition of the MRC property. Approval of the tentative terms and conditions by Council is envisioned to occur by March CONSULTATION The following individuals groups were consulted in preparation of this report and during the process: Director of Development Services Business Development Coordinator Michael Duben Chief Administrative Officer, District of Muskoka Director of Legislative Services/Clerk Russell, Christie, LLP ECONOMIC IMPACT At this time, there are tangible immediate impacts on the operating budget outside of funds already approved. Depending on the speed at which negotiations commence, there may be legal (or other) expenses incurred as a result of external resource inputs into a responsible negotiation process. The precise value of what those costs might look like is currently unknown, but was recently endorsed by Council via formal resolution on September 20, With respect to the economic benefits of the project itself, without limiting the scope of potential benefits, the proposed project plans to bring the following: 200+ year round jobs for operation of the school 200 jobs and $40 million in labour income during construction $400 million of operating expenses over a 25 year period Anticipated 6000 person years of employment over a 25 year period. Indirect and induced impacts in: o Tourism o Real Estate purchases

7 COMMUNICATIONS PLAN All agencies who submitted proposals, in addition to Infrastructure Ontario, will be followed up with via advising Councils decision. Information from this Report will be presented in a news release and distributed on the Town of Gravenhurst s website and social media accounts. Council and the public will be made aware of further benchmarks in the process through reports and less formal updates. CONCLUSIONS While there are many details still to be considered, the Recommendation of the Review Committee is one that is believed to bring the greatest chance of successful economic impact, while maintaining the integrity of the area from an environmental, community design and social perspective. Next steps will include negotiations with Maple Leaf Schools in order to develop a partnership agreement, which would then lead to subsequent discussions with Infrastructure Ontario. RELATION TO OTHER FORMAL PLANS OR GUIDING LEGISLATION Municipal Strategic Plan Economic Development Strategic Plan Municipal Budget ATTACHMENTS Appendix 1: Summary of Maple Leaf Schools Proposal RESPECTFULLY SUBMITTED BY: Glen B. Davies, Chief Administrative Officer

8 Appendix 1 Report to: Planning Council Proposal Summary Maple Leaf School Development concept: Build and operate the flagship Bethune Maple Leaf School, North America s first high quality bilingual English-Chinese school, that will include a new public park with a walking trail and look-out, a condominium residential development and dedicated lands for a local not for profit organization s use. Sustainable contribution to Gravenhurst economy: The proposed project would create 200 construction jobs over three years; $0 million in labour income and GDP contribution of over $50 million to Ontario. Including indirect and induced impacts the project would stimulate 370 jobs, $66 million in labour income and provincial GDP of $100 million. Student enrolment in year 1 will be 300 increasing to 1,500 students by year 7. Over a 25 year time horizon the cost to operate the school will be $400 million. It is expected to create over 6,000 person years of employment, nearly $400 million in labour income and a Provincial GDP contribution of more than $500 million over 25 years. The activity of this year-round school will represent an extremely significant non-cyclical economic driver for the Town, as well as the District of Muskoka. Compatibility with values expressed in Official Plan: The components of the masterplan: Academic spaces, administrative offices, athletic facilities, a gymnasium, performing arts spaces and full dormitories for students and some faculty, complete with on-site dining facilities (gross floor area 23,000 m 2 ). Condominium dwelling units, three storey Muskoka style, contextually sensitive buildings (gross floor area 15,800 m 2 ) A public park totaling 30% of the land area and providing a naturalized trail system for local residents and tourists 30 meter natural buffer along most of waterfront Qualification and experience: Maple Leaf School System (MLS) and Knightstone Capital Management (KCap) have formed a joint venture for the proposed project. MLS as extensive experience building and operating more than 20 similar schools in seven cities in China. KCap is a niche real estate development company developing assets that produce long-term cash flow through long-term ownership. Currently it has three projects to build academic space and student residence with University of Toronto, Centennial College and Ryerson University. Demonstrated knowledge of Gravenhurst: Although the proponent is only recently come to Gravenhurst and Muskoka the proposal demonstrates the level of research and preparation that has gone into their proposal.

9 Demonstrated knowledge of Ontario planning regulations and framework: KCap is very knowledgeable of the Ontario planning regulatory framework. Creativity of approach: The proposed project would be unique in Canada. The lands for public parkland and an allocation of lands for the use of a local organization is creative. Demonstrated ability to complete work within timelines: The proposal provided a detailed timeline from September 2016 to October 2019 the scheduled opening of the school. The individual partner s track record would indicate that the project would be completed within the schedule set in the proposal. Demonstrated financial capacity to bring project to fruition: The project cost is estimated at $100 million. The joint venture company will be well capitalized through its own resources. The business plan and operations model provided in the proposal details the financial considerations.