HomeMy WebLinkAbout2007-181THE CORPORATION OF THE MUNICIPALITY OF
CLARINGTON
BY-LAW 2007 - 181
Being a By-law to authorize a contract between the Corporation of the Municipality of
Clarington and CB Richard Ellis Limited, Toronto, Ontario, to enter into an
agreement for Consulting Services, Durham/York Energy From Waste
Environmental Assessment Study.
THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON HEREBY
ENACTS AS FOLLOWS:
THAT the Mayor and Clerk are hereby authorized to execute, on behalf of the
Corporation of the Municipality of Clarington with the Corporation Seal, a
contract between CB Richard Ellis Limited, Toronto, Ontario and said
Corporation; and
2. THAT the contract attached hereto as Schedule "A" forms part of this By-law.
By-law read a first and second time this 30th day of July, 2007.
By-law read a third time and finally passed this 30th day of July, 2007.
im A erne y, Mayor
_~
Patti arne~iVlunicipal Clerk
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-- -' _ _I ~ ~~ ~~ ~ _ _.~'
Leadiszg the Way ~---
Municipality of Clarington
40 Temperance Street
Bowmanville, Ontario L1C 3A6
(905) 623-3379
Vendor:
CBRE0001
CB RICHARD ELLIS LIMITED
2001 SHEPPARD AVENUE EAST
SUITE #300
TORONTO ONTARIO M2J 4Z8
Purchase Order CLOSED ORDER
Purchase Order No. 03844
Date 1 /10/2008
Page 1
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Ship To:
Municipality of Clarington
40 Temperance Street
Bowmanville Ontario L1 C 3A6
^ Changed Since the Previous Revision
Shi in Method Pa ment Terms Confirm With
DEFAULT DUE ON RECEIPT Faye Langmaid
LIN Item Number. Descri tion Re 'd Date UIM Ordered Unit Price Ext. Price
Reference' Number .FOB
1 CONSULTING EFW Industrial Valuation Study 1/9/2008 Each
CONSULTING Destination
Fee for professional consulting services for
Clarington Energy from Waste Facility Site
Assessement Industrial Property Valuation Study.
Approved by Report PSD-070-07
Approved by Report PSD-070-07
Council Approved: May 28, 2007
Req # 2392
NOTES:
1) THE VENDOR WILL SUPPLY AND DELIVER GOODS AND/OR SERVICES TO THE CORPORATION
OF THE MUNICIPALITY OF CLARINGTON IN ACCORDANCE WITH TERMS AND CONDITIONS ON
BOTH SIDES HEREOF.
2) NO CHARGES WILL BE ACCEPTED FOR PACKING, CRATING OR CARTAGE UNLESS OTHERWISE
SPECIFIED.
1.000 $100,000.000 $100,000.00
Subtotal $100,000.0
Trade Discount $0.0
Frei ht $0.0
Miscellaneous $0.0
HST $0.0
PST ' $0.0
"GST $5,000.0
Order Total. $106,000.0
PURCHASING MANAGER
~. -~
Ian F. Heerdegen, AACI, BCOM, CA, MRICS, PLE
Associate Director
CB Richard Ellis Limited, Real Estate Brokerage
Valuation & Advisory Services
www.cbre.ca
FINAL
File: CBRECIaringtonFinalProposalJuly26th2007
July 26, 2007
Municipality of Clarington
40 Temperance Street
Bowmanville, Ontario
L1C 3A6
Attention: Faye Langmaid -Manager of Special Projects
Dear Ms. Langmaid:
eBRE
CB RICHARD ELLIS
2001 Sheppardd Ave. E.
Suite 300
Toronto, ON M2J 4Z8
416 494 0600 Tel
416 494 8806 Fax
416 495 6310 Direct
PRIVATE & CONFIDENTIAL
Clarington Eneray From Waste Facility Site Assessment
Industrial Property Valuation Study
Reference: Energy From Waste Environmental Assessment Study
Report # PSD-070-07, File # PLN 33.3.10, dated May 22, 2007
Section 6, Page 10: Financial Impacts and Host Community Agreement Studies
Further to our recent discussions, we are pleased to present our revised Scope of Work (SOW) for the
above-mentioned assignment.
TASK
CB Richard Ellis (CBRE) will undertake an Scope of Work in response to Section 6.1 (Impact on
Clarington Energy Business Park) and Section 6.2 (Impact on Assessment Base) and will assist Price
Waterhouse Coopers (PWC) in Section 6.3 (Community Stigma) and Section 6.4 (Host Community
Agreement).
SCOPE OF WORK
Objective:
"to determine whether or not there will be an impact on industrial property values due to the
citing of Energy for Waste facility (EFW) in Clarington's Energy Business Park (EBP) and its
corresponding impact on the tax assessment base for Clarington":
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Confidential
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CB RICHARD ELLIS
OVERALL APPROACH
CBRE considers it appropriate to break the assignment into 3 main categories:
1. Industrial Property Valuation Study
2, Tax Assessment Impact Study
3. Comparative EFW Case Study
A. INDUSTRIAL PROPERTY VALUATION STUDY (IPVS)
1. Overall Process:
a. An Industrial Property Valuation Study (IPVS) will be conducted within the proposed Energy
Business Park (EBP) area.
b. It will not be considering individual properties or site-specific issues.
c. The focus of the study will be on industrial lands.
d. The overall process to achieve the stated objective will generally involve the following areas
of study:
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(i) Collecting information on industrial property sales and values in Clarington,
concentrating primarily in the EBP,
(ii) Plotting this information to identify trends through time.
(iii) Gathering information to explain these trends (where possible). There are many
events and factors (economic, social, political, plant shutdowns etc) that may
impact property values at a given period of time, or over a period of time.
(iv) Examining historical and recent events (such as the Darlington Nuclear Plant) in
Clarington that may, or may not, have had an impact on property values.
(v) Evaluating the Prospective Valuation of a fully functioning EBP on Clarington.
This would involve various scenarios.
(vi) Estimate the number of prospective employees from the future development of
the EBP based on various scenarios and the resulting economic impact for
Clarington.
2. Data Collection & Analysis:
a. The data collection process will include the gathering of field data, sales, demographic
and economic information.
b. Computer modeling will be utilized to conduct data analysis and interpretation.
c. The primary source of real estate transaction data for industrial land sales will be
comprehensive data bases available to us, including the data bases of CBRE.
d. This data will provide information to measure the trends in real estate values.
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CB RICHARD ELLIS
e. The base data will detail properties by type, lot size, square footage, zoning,
neighbourhood characteristics, price ranges, assessed values, number of transactions,
date of sale, etc., where available and appropriate.
f. This actual transaction data will be logged, analyzed and plotted via computer
spreadsheets.
g. Specific property issues and information that is made available by the Municipality of
Clarington will be considered in the analysis and investigations.
h. A review of historic and current Official Plan and EBP Secondary Plan & zoning data,
together with economic development & planning information including development
applications, building permit requests, building permits issued, housing starts, etc, from
the Municipality of Clarington.
i. Data will be collected and analyzed from Statistics Canada, CMHC, Assessment
Department, Clarington, and other governmental & corporate agencies, etc, as
appropriate.
j. Where applicable, interviews will be conducted and questionnaires circulated to local
real estate agents, appraisers, brokers and other real estate participants to ensure
appropriate perspectives are taken into consideration.
k. All this data will be analyzed and incorporated in databases that will support the
conclusions of the IPVS.
I. Proprietary financial modeling and discounted cash flow modeling will be completed b
~~,~j y
CBRE on the Prospective Value of the Energy Business Park.
3. Study Area:
The study area is the Municipality of Clarington's proposed Energy Business Park boundaries and
the transportation routes for the EFW.
4. Land Use Categories•
a. The Land Uses under study are industrial properties broken down according to the land
use designations (e.g, prestige industrial, office, commercial, etc) within the Energy
Business Park.
b. All other property types are specifically excluded from the IPVS.
5. Report:
a. The final report will address potential changes to industrial property values in the
Clarington Energy Business Park area using proprietary financial modeling and
valuation completed by CBRE.
b. It will provide a comparison of changes in values (positive &/or negative) for the study
areas, for the respective time periods under review.
c. The report will be a Consulting Report (not an Appraisal) prepared in accordance with
the Canadian Uniform Standards of Professional Practice (CUSPAP) of the Appraisal
Institute of Canada (AIC).
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d. The report will be for the internal use of the Municipality of Clarington only; no other
parties may rely on the report without the prior written consent of CBRE. It may not be
used for any other purpose.
6. Assignment Approach
The assignment approach will include:
a. Valuing industrial lands today (the effective date of the report) -both serviced and unserviced
lands and the prospective future value of a fully functional EBP, using various development
scenarios.
b. Determine the impact and marketability of the EBP with or without an EFW.
7. Detailed Work Plan
The methodological approach for the IPVS will involve addressing the following questions:
a. What is the ootential impact on real estate values if any if an EFW is located in the
/-~ Clarinaton Eneray Business Park (Paragraph 6 1 (Page 10~
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(i) The purpose is to determine the Impact on the Viability of the EBP Secondary
Plan and to determine the Marketability and Development of the EBP, with or
without an EFW.
(ii) Obtain & analyze real estate sales data, including MLS real estate transaction
data from real estate boards, supplemented by assessment and other
databases, where appropriate.
(iii) Analyze historic and current economic & demographic data from Statistics
Canada, CMHC, Assessment Department, Municipality of Clarington, etc and
the comparative communities.
(iv) Interview real estate brokers, developers, appraisers, municipal officials and
economic development officers, for market intelligence, where appropriate.
(v) Complete Financial Models to examine prospective valuation changes on the
Energy Business Park area.
(vi) As per Paragraph 6.1.1, we are advised that only two potential EFW sites are to
be considered in our analysis, being identified as Sites 1 & 5.
(vii) Paragraphs 6.1.2 to 6.1.5 details the proposed uses, principles etc
contemplated within the EBP -our study will include a review and analysis of the
Secondary Plan and its economic impact on Clarington. Review of existing
consulting reports will be undertaken to ensure that no unnecessary duplication
of source information and its analysis is undertaken; consultations with various
consultants will be undertaken as appropriate.
(viii) As per paragraph 6.1.6, in particular, CBRE will consider the marketability of
the EBP if an EFW is located there. We will, through interviews and
questionnaires of CBRE market participants in. conjunction with participants
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CBRE
C~ CB RICHARD ELLIS
provided by municipal and regional staff attempt to quantify whether the
business decision to locate in the EBP is positively or negatively impacted by the
EFW, The questionnaire will be developed in conjunction with PWC and
municipal staff before going to market,
(ix) The resulting economic analysis will determine the impact on the viability of the
EBP, under various scenarios.
What is the potential impact of Stigma on the community if any if an EFW is located in
the Clarinaton Eneray Business Park (Paragraph 6 3 (Page 12~
(i) It is understood that PWC will be retained to determine what is the potential loss
or positive effect, if any, that may be caused through stigmatization.
(ii) CBRE will provide data and assist PWC, as required.
c. What is the potential financial impact on the community if any and how to protect the
community through a Host Community Agreement if an EFW is located in the
Clarinaton Eneray Business Park (Paragraph 6 4 jPage 12)_
(i) It is understood that PWC will be the lead consultant in this area of study.
(ii) DAC will undertake an analysis of different Payment-in-Lieu-of-Taxes scenarios
to determine the potential financial impact on the Municipality's tax base (as per
paragraph 6.4.2).
(iii) CBRE will provide data and assist PWC, as required.
B. TAX ASSESSMENT IMPACT STUDY (TAIS~
The methodological approach for the TAIS will involve addressing the following questions:
l . What is the potential impact on the Assessed Values if any if an EFW is located in the
Clarinaton Eneray Business Park (Paragraph 6 2 jPage 11Z
(i) CBRE and its tax consultant, Divaris Alexander Corporation (DAC), will prepare
the economic analysis of the potential tax impact on the EBP.
(ii) The purpose is to understand what is the potential loss or positive effect, if any,
on the assessed values of lands within the EBP.
(iii) Complete the tax assessment impact of establishing the EFW in Clarington and
the related tax impact.
(iv) As per paragraph 6.2.3, to determine what is the impact on comparative tax
revenues with or without the EFW facility. What type and quality of employers
(e.g. prestige industrial, general industrial, office & commercial) can be
attracted to, or are detracted from, the EBP.
(v) Determine the impact on the Tax Assessment & Tax Base.
(vi) Is there any positive contribution if the EFW provides for District Heating through
thermal energy and discounted electricity within the EBP.
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(vii) Obtain & analyze assessment data, where appropriate.
(viii) CBRE and DAC will provide its economic analysis to Price Waterhouse Coopers
(PWC) and assist PWC as required.
2. Work Plan
CBRE in conjunction with its tax consultants (DAC) will consider:
a. Payment-In-Lieu-Of-Taxes (PICTS):
(i) Establish what the PICTS would be if the EFW is built;
(ii) Establish what taxes would be assuming the EFW is not built.
b. What would be the effect on the taxes, in the remainder of the EBP, over the EBP
development horizon:
(i) If the EFW is constructed;
(ii) If the EFW is not constructed.
3. Approach
"`~
-~ The following information as it relates to the TAIS will be considered:
a. Size area(s) of the EFW site(s).
b. EFW building size.
c. Estimated market value of the EFW land.
d. Projected cost of the EFW facility.
e. Development time lines for the EBP whether or not the EFW is built or not built.
f. What shift in projected type of occupancy is expected, e.g. if Prestige uses refuse to
locate near an EFW and consequently lower grade industrial tenants are attracted, what
would be the projected decline in market values within the EBP.
g. What proposed or likely changes to the zoning would be anticipated if a shift in the type
of occupancy occurs.
h. Would any proposed downgrading of zoning affect market values within the EBP.
i. The effect on land values on the EBP lands if the EFW is built.
j. The effect on land values on the EBP lands if the EFW is not built.
k. Projections of the range in sizes and types of the anticipated developments within the
EBP.
I. Determination of net developable lands within the EBP, after allowances for roads etc.
m. Any other issues that may impact the tax base of the EBP.
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CBRE
`~ CB RICHARD ELLIS
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C. COMPARATIVE EFW CASE STUDY (CASE STUDY
l . Objective
Identifying and collecting data in other jurisdictions where EFW's or similar facilities have been built or
are located and to determine the impact on land values.
2. Approach
a. By comparing industrial property values in Clarington with other similar jurisdictions
where EFW's are located, an attempt will be made to determine whether property values.
in Clarington will be affected by the citing of an EFW in this marketplace; and if so, by
what percentage relative to such other benchmark EFW communities.
b. The socio-economic criteria for determining "comparative EFW communities" will
include geographic, economic, political & demographic data that will be gathered and
evaluated.
c. Based primarily on land use, economy & size, Clarington will be benchmarked against
similar EFW communities for comparative trending & pairing purposes.
d. During the course of the Case Study an understanding of the characteristics of the
Clarington marketplace will be determined, providing appropriate criteria to make
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app
icable comparison choices.
'' e. We will research of local, national & international Case Studies where appropriate.
f. By comparing such data with other communities where similar or comparative land uses
may have impacted land values through a similar use, e.g. identify and analyze other
EFW locations.
g. Reference to European and North American EFW's facilities may be required
h. .
By evaluating other EFW locations, the study will determine the percentage changes (not
actual dollar amounts) to property values in Clarington compared with such other EFW
sites and communities.
PRICE WATERHOUSE COOPERS (PW
As Real Estate Consultants & Land Economists CBRE will rovide s ecific information to PWC for its
particular studies as it relates to the EBP
i. CBRE & DAC will provide PWC with all its reports and studies as required by PWC to
undertake its assignment.
ii. CBRE will provide data and assist PWC, as required, but ensuring that there is no
overlap or duplication in services.
iii. Agree a general analysis framework and the information to be gathered in the
questionnaire as well as other investigations that will be performed.
iv. A questionnaire in order to study the impact of the EFW on the intentions of potential
candidates to locate in the EBP.
~,, v. Prepare an estimate of the assessed real estate values and tax classifications in the EBP
based on various scenarios.
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CBRE
CB RICHARD ELLIS
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vi. PWC will be responsible for the determining the impact if any, of "Community Stigma"
as it relates to the EBP resulting from the EFW.
vii. PWC will be responsible for assisting the City in the proposed "Host Community
Agreement".
viii. Such other information as PWC requires to complete its assignment.
TENTATIVE TIMETABLE
• Finalization of Scope of Work -June 2007.
• Industrial Property Value Study -July & August 2007.
• Tax Assessment ,Impact Study -July & August 2007.
• Comparative EFW Case Study -July & August 2007.
• Reporting & Review -September 2007.
T1ME ALLOCATION
Phase 1: Industrial Property Valuation Study
• Two months, being July & August, 2007.
• We estimate a total of 50 person days will be required.
,~ • Our estimate assumes not more than 5 person days are required to consult with other sub
~;
consultants; any additional time required will be considered a change order under this contract.
• Estimated completion date: August 31, 2007.
Phase 2: Tax Assessment Impact Study
• Two months, being July & August, 2007.
• We estimate a total of 15 person days will be required.
• Estimated completion date: August 31, 2007.
Phase 3: Comparative EFW Case Study
• Two months, being July & August, 2007.
• We estimate a total of 10 person days will be required.
• Estimated completion date: August 31, 2007.
Phase 4: Draft Report Review and Revisions
• Two weeks to review and make revisions.
• We estimate a total of 5 person days will be required.
• Estimated completion date: September 15, 2007.
Phase 5: Final Report
• One week to revise and issue the Final Report.
( • We estimate a total of 5 person days will be required.
`- • Estimated completion date: September 30, 2007.
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CBRE
Cf3 RICHARD ELLIS
The following chart represents our estimate of timing and deliverables:
Phase Task 2007:
June July August September
Scope of Work -Finalize
Phase 1 Industrial Property Valuation Study
Phase 2 Tax Assessment Impact Stud
Phase 3 Comparative EFW Case Study
Phase 4 Draft Report Review & Revisions
Phase 5 Final Report
• The following is a schedule of CBRE's hourly /per diem rates that are applicable to these studies:
Clarington -Property Valuation Study
Fee Schedule: As-At May, 2007
' CBRE Clarington Clarington
Personnel Scheduled Hourly Per Diem
Title Hourly Rates Rate
Rates 7.5
Hours
,Managing Director / SVP $ 500.00 350.00 $ 2,625.00
Associate Director $ 400.00 •250.00 $ 1,875.00
Junior Consultant /Analyst $ 175.00 ~ 130.00 $ 975.00
Adminstrative Assistant $ 120.00 90.00 $ 675.00
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CBRE
CB RICHARD ELLIS
BUDGET (Revised)
• Based on the above-mentioned work plan and time estimates, the following is CBRE's Budget;
Clarington -Industrial Property Valuation Study
Budget: Revised July 25, 2007
Phase Description Total Blended Budget
Person Per Diem
Days Rate
Phase 1: Industrial Property Valuation Study 35.00 $1,500.00 $ 52
500
Phase 2: Tax Assessment Impact Study 10.00 $ 1,500.00 $ ,
15
000
Phase 3: Comparative EFW Case Study 10.00 $ 1,500.00 $ ,
15
000
Phase 4 & 5: Reporting & Review 10.00 $ 1,500.00 $ ,
15,000
Total Fees 65.00 $ 1,500.00 $ 97,500
Disbursements: Actual Out-of-Pocket, Estimated @ 5% of Fees $ 4 8
Total Fees & Disbursements 75
$ 102,375
Rounded to: $ 100,000
as
Plus Applicable Taxes
- ~~~~~~u~~ ~~~ mis puageT is me nme and cost of atfiliated Tax Assessment Consultants to assist CBRE.
• Excluded is the cost of all other third party sub-consultants required by Clarington.
• Please note that no allowance has been made for out of province travel; if required, this will be
considered a change order.
• Fees & disbursements will be invoiced, prorata at the end of each month, and will be payable within
30 days.
• The balance of outstanding fees & disbursements will be billed at the end of each phase.
• Any material change orders (in excess of 5% of the total budget) are subject to the. prior approval of
Clarington.
• For budgeting purposes, we have prepared a schedule of work, which we believe reflects a
reasonable estimate of time and resources it will take to complete the assignment described herein.
Total Budgeted Cost of the Clarington Industrial Property Valuation Study is estimated at:
One Hundred Thousand Dollars
($100,000.00)
Plus Applicable Taxes
We would be pleased to clarify any issues or answer any questions, however, if the general terms of this
proposal meet with your approval, please sign and return a copy of this agreement not later than July
31, 2007.
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CBRE
CB RICHARD ELLIS
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Yours truly,
CB RICHARD ELLIS
Real Estate Valuation & Advisory Services
Gerald McCrindle,
SVP & Managing Director
Valuation & Advisory Services
Direct Phone: 416-495-6244
Fax: 416-494-8806
Email: gerald.mccrindle@cbre.ca
~~.
Ian F. Heerdegen, AACI, BCOM, CA, MRICS, PLE
Associate Director
Valuation & Advisory Services
Direct Phone: 416-495-6310
Fax: 416-494-8806
Email: ian.heerdegen@cbre.com
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BR
CB RICHARD ELLIS
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ACCEPTANCE:
To: CBRE
W e accept 'the terms of the assignment as set out in your letter dated July 26, 2007,
Dated at Clarington this 26th day of July , 2007
MUNICIPALITY OF CLARINGTON
f i /~~ r~
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Nancy Taylor
Director of Finance
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