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Real Estate Acquisitions Corporate Policy

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Approved By: City Council
Approval Date: 3 April 2007
Effective Date: 3 April 2007
Section: Real Property

Policy Statement
Purpose
Application
Policy Requirements
Methods of Acquisition
Appraisal
Acquisition at Market Value
Environmental Due Diligence
First Nation Consultation
Heritage Properties
Ottawa Greenspace and the Greenspace Network
Responsibilities
Monitoring and Contraventions
References
Legislative and Administrative Authorities
Definitions
Enquiries

Policy Statement

It is the policy of the City of Ottawa to acquire Real Property rights as required, for a municipal need consistent with City Mandated Programs, projects and policies.  The general policy direction for the City of Ottawa’s Corporate Policy, on the Acquisition of Real Property is set through policy 5.2.1.4 Acquisition and Holding of Land, of the City of Ottawa Official Plan (2003), one of the City’s five Growth Management Plans.  The policy states that “The City of Ottawa may acquire or hold land within its boundaries, for the purposes of implementing any policy of the Plan”. More specific direction for the Acquisition of lands are contained in other Growth Management Plans, Council Approved Supporting Plan to the Official Plan, Secondary Plans, and other Approved plans.

Purpose

The purpose of this Policy is to ensure that a consistent and equitable framework is followed in the Acquisition of Real Property interests in support of Council approved projects, programs and policies.

Application

The Acquisition Policy applies where Real Property is acquired by the City of Ottawa and includes any right, interest or benefit in land, but is not limited to, fee simple acquisitions, leases, permanent easements, rights-of-way and other limited interests such as joint-use agreements, temporary working easements, consents to enter, and licences.

This policy applies to all City of Ottawa employees, any agents or assigns acting on behalf of the City and consultants authorized to acquire Real Property on behalf of the City. Real Property such as road dedications and easements that are acquired through the planning/subdivision processes will continue to be dealt with as part of that process and in accordance with the Planning Act and any regulations therein.

Section 8 of the Municipal Act states “A municipality has the capacity, rights, powers and privileges of a natural person for the purpose of exercising its’ authority under this or any other Act”. A “natural person” can acquire land and the City of Ottawa can therefore acquire land for municipal purposes, coming within the spheres of jurisdiction listed in Section 11.  Section 6 of the Act also provides that “The power of a municipality to acquire land under this or any other Act includes the power to Expropriate in accordance with the Expropriations Act”.

The City of Ottawa Act provides authority to acquire land for public parks, forests, etc. in Section 12.3 (1), and for commercial and institutional uses, and related uses in Section 12.5 (1). The City of Ottawa is also authorized to acquire land for affordable housing pursuant to Section 17 of the Ontario Housing Development Act.  The Ontario Heritage Act provides authority to acquire property pursuant to Section 36 (2) and Section 45.

Policy Requirements

Lead Department:

The Real Estate Services Division (RESD) of the Real Property Asset Management Branch (RPAM), Corporate Services Department, shall undertake the Acquisition of Real Property interests unless otherwise directed by the City Manager or Council.  

Departmental Needs Assessment:

Prior to initiating an Acquisition, (other than lands required for infrastructure, acquisition of environmental/waterfront lands, and pursuant to the Planning Act), the Client Department will prepare on its behalf, or on behalf of a partner agency, a Departmental Needs Assessment that sets out the justification and rationale for the proposed Acquisition. The Departmental Needs Assessment shall then be vetted through the Comprehensive Asset Management Division (CAM) of RPAM, in collaboration with the Client Department to determine whether the City of Ottawa’s existing Real Property inventory, or any capital works initiatives, may fulfill the Client’s Real Property requirements. This process could include an Asset Rationalization as defined in the Integrated Asset Rationalization and Disposal Strategy of Real Property. Should it be determined that Acquisition needs cannot be met by existing inventory, RESD will initiate the Acquisition.

Council Approval:

Property will be acquired in support of Council approved programs, projects and policies. A budget item must be approved for the program or project, including the costs of acquiring the Real Property and operational budget impacts, before action is taken to acquire property.

City Council approval of a project shall include authority for the appropriate person(s) or body to initiate and undertake legal surveys, Appraisals, negotiations, Expropriations, legal and other such related activities as may be required. 

Funding:

Funding for the Acquisition of Real Property must be identified through a Council approved budget item, specific to the program, project or policy defining the need, or allocated from an approved Departmental Budget, with approval of the Deputy City Manager of the Client Department. 

Methods of Acquisition:

Negotiation

Negotiation is the preferred method of obtaining Real Property rights, with compensation provided as though Acquisition was pursuant to the Expropriations Act.

Expropriation

Where project requirements must be met in a timely manner, or where negotiation is unsuccessful, Expropriation may be considered. The City of Ottawa has the authority to Expropriate land in accordance with the provisions of the Expropriations Act. Expropriation will be used as a last resort for Acquisition purposes. Where necessary, Client Departments shall allow for a minimum of 12 months lead time in their project planning, in anticipation that Real Property Acquisition by Expropriation may be required.

Charitable Donations

The City of Ottawa may acquire Real Property through gifts or donations, subject to Council approval, or that of its Delegated Authority. Before acceptance or rejection of a gift of Real Property, an analysis to determine the conditions of the gift, existing restrictions of encumbrances and assumption of liabilities or any tax implications, shall be carried out. A charitable donation receipt may be issued in the amount of the appraised Market Value of donated Real Property. An independent appraisal shall determine the Market Value of any donated Real Property. A satisfactory Phase I Environmental Site Assessment will also be required. Any costs associated with the above will be borne by the donor or the Client Department.

Development Approval Process

The Planning, Transit and Environment Department deals with land requirements such as parkland, road widening, etc., through conditions of final approval for subdivisions, site plans, or other development approvals under Delegated Authority. Where Delegated Authority has been removed by the Ward Councillor, such matters are submitted to either the Planning and Environment Committee or the Agriculture and Rural Affairs Committee and City Council for approval.  This constitutes approval for the City of Ottawa to acquire the necessary lands pursuant to the Planning Act.

Tax Sales – Vesting in Municipality

The municipality may acquire Real Property, pursuant to Part XI of the Municipal Act, 2001 – Sale of Land for Tax Arrears – by registration of a Notice of Vesting – Section 379.

Land Exchange

When an Acquisition is contemplated in support of the Natural Environment Area or Urban Natural Feature Policy, as provided for in the Ottawa Official Plan and the draft Greenspace Master Plan, and it is deemed that an exchange of City owned surplus Real Property is in the best interests of the City of Ottawa, negotiation shall be initiated based on the Market Value of the respective Real Properties, pursuant to the Disposal of Real Property Policy and Procedures, and this policy.

Public-Private Partnerships (P3)

The City of Ottawa may acquire or dispose of an interest in Real Property as part of a P3 partnership to provide infrastructure, community facilities and related services that would benefit the municipality, the private sector and residents.

Other Agencies

The City of Ottawa may acquire Real Property as the result of a transfer of jurisdiction, from one level of government to another, e.g. – transfer of highways, boat launches, etc.

Appraisal

All Acquisitions shall be supported with a current Market Value Appraisal.  An Appraisal will be completed by an independent Real Estate Professional or by qualified City staff.

Where the estimated market value is $500,000 or greater, a second Appraisal will be required, one of which will be undertaken by an independent Real Estate Professional.

Appraisal reports will be based on the “Highest and Best Use” of the property and will be prepared by a qualified Real Estate Professional or by qualified City Staff, in accordance with current standards of practice within the real estate industry.

Acquisition at Market Value

Real Property shall be acquired on the basis of Market Value and entitlements, as defined by the Expropriations Act, unless other considerations are included in the transaction and approved by Council.

Where there is a variance between the appraised value and the Acquisition price, that variance shall be explained in the approval report.

Environmental Due Diligence

The City of Ottawa shall complete a pre-screening on all Real Property to be acquired to identify potential contamination issues associated with real property e.g. Historical Land Use Inventory (HLUI).

When the Acquisition is for the entire fee simple interest (total buyout), or where it is deemed necessary by the appropriate Program Manager, Real Estate Services in the acquisition of a lesser interest, a Phase I Environmental Site Assessment (ESA), together with any additional assessment recommended by the Phase I ESA, if deemed necessary by the appropriate Program Manager, shall be completed.  All such ESA’s shall be completed in accordance with the Canadian Standards Association (CSA) standards and site remediation criteria, as set out by provincial regulations. Whenever possible or appropriate, Acquisition agreements may provide for the indemnification of the City of Ottawa by the vendor for environmental conditions.

First Nations Consultation

When acquiring or encumbering federal or provincial lands within the Algonquin’s of Ontario Land Claim area, it is recognized that the federal and provincial governments have an obligation to consult with the First Nations. Further, the federal and provincial governments cannot delegate to the purchaser that obligation to consult.  As the beneficiary of a (pending) land transfer and the party at risk if consultation is absent or inadequate, the City will monitor the consultation process.

Heritage Properties

The City of Ottawa Official Plan provides the policy direction with respect to the Acquisition of properties of heritage interest, through Sections 2.5.5.11 and 4.6.1.4.

Consideration will also be given to the policy in the Arts and Heritage Plan, which states “Give priority to the adaptive re-use of City-owned Heritage Buildings, to meet the City’s accommodation needs before constructing or leasing new buildings”.

When acquiring Real Property that may have a heritage designation or historical value, a comprehensive analysis of the Real Property shall be conducted involving RPAM and all appropriate departments.  The analysis will include:

• Identification of the heritage designation or historical value of the Real Property;
• Confirmation of the City of Ottawa program(s) to be implemented at this heritage property;
• Identification of the heritage value of the Real Property;
• Identification of the desired long-term use or protection of the Real Property;
• Assessment of the impact on the City of Ottawa of the operational costs of the Real Property; and
• Development of an asset management plan, which forecasts the capital renewal and re-investment requirements, to preserve the heritage property.

Prior to the Acquisition of a heritage property, RPAM requires confirmation that the Client Department and/or City Council have provided the funding and approval for the Acquisition.

Ottawa Greenspaces and the Greenspace Network

The City of Ottawa may acquire Real Property to ensure the sustainability of its greenspace values, as outlined in Section 5.2.1 of the Ottawa Official Plan. Direction is provided through specific designations that currently mandate Acquisition in Natural Environment Areas, Urban Natural Features, and Major Open Space.

Responsibilities

City Council:

City Council approval, by way of a Council Approval Report, is required for projects requiring the Acquisition of Real Property, including any limited interest therein except where the total cost of the Acquisition does not exceed the threshold of Delegated Authority.

Delegated Authority:

The City Manager, Chief Corporate Services Officer, Director of RPAM, Manager of Real Estate Services and/or the Program Manager of Real Estate Services, by way of a Delegated Authority Approval Report, in accordance with the provisions of the Delegation of Authority By-law 2005-503, as may be amended from time to time, have the authority to approve the Acquisition of Real Property in accordance with the provisions of that By-law.

Client Department:

The Client Department is responsible for reviewing, in collaboration with RPAM through its’ Real Estate Services and Comprehensive Asset Management Divisions, the existing Real Property inventory and other Acquisition initiatives, to determine if Real Property needs can be met by current inventory or initiatives, prior to the initiation of an Acquisition. The Client Department is directly involved in the Asset Rationalization effort and confirms that the Acquisition requirement satisfies its’ City Mandated Program. The Client Department is responsible for carrying the Capital Budget in support of the Real Property Acquisition and for notifying the Ward Councilor of any proposed Acquisitions at the early initiation of the project process. RESD will be responsible of notifying the Ward Councillor of any pending Council Approved or Delegated Authority Reports moving forward for approval.

Legal Services Branch:

The Legal Services Branch acts as legal counsel to departments and advises the City of Ottawa on Real Property transactions.  The City Solicitor has authority to undertake all legal proceedings required to complete the Acquisition transaction, including Expropriation proceedings.

Monitoring/Contraventions

The Real Estate Services Division will monitor the application of the policy to ensure policy requirements are met.

References

Arts and Heritage Plan
City of Ottawa 20/20 Official Plan
Disposal of Real Property – Harmonization of Policy, Procedures and Disposal By-law
Delegation of Authority By-law
Greenspace Master Plan

Legislative & Administrative Authorities

Arts and Heritage Plan
City of Ottawa Act
City of Ottawa By-Law 2002-38
City of Ottawa By-Law 2002-49
City of Ottawa Capital Budget
City of Ottawa 20/20 Official Plan
Disposal of Real Property – Harmonization of Policy, Procedures and Disposal By-law
Delegation of Authority By-law
Expropriations Act
Environmental Assessment Act
Greenspace Master Plan
Municipal Act 2001
Municipal Tax Sales Act 1984
Ontario Municipal Board Act
Ontario Heritage Act
Planning Act

Definitions

Acquisition -a transaction which includes any right, interest or benefit in land, but is not limited to, fee simple acquisitions, leases, permanent easements, rights-of-way and other limited interests such as joint-use agreements, temporary working easements, consents to enter, and licences.

Appraisal - an estimate or opinion of value or the act or process of estimating value.  Usually it is a written statement setting forth an opinion of the value of an adequately described property as of a specified date, supported by the presentation and analysis of relevant data.

Asset Rationalization - a process to support decision-making related to the Acquisition, remediation or disposal of Real Property, in a cost effective manner, while assuring that essential program and service delivery objectives are not compromised.

Capital Projects  - projects that have funding or budgets in place and are included in the City’s Capital Budget.

City Mandated Programs- programs that support City of Ottawa initiatives, as reflected in the Ottawa Official Plan or Capital Program.

Client Department - the Department that requires the Real Property for an approved program or project.

Council Approval Report - report to Council recommending approval of an Acquisition by the City of Ottawa.

Delegated Authority -authority to approve pursuant to the Delegation of Authority By-Law 2005-503 as amended.

Delegated Authority Approval Report -  a report to the City Manager, Chief Corporate Services Officer, Director of RPAM, Manager of Real Estate Services, and/or the Program Manager of Real Estate Services, recommending the approval of an Acquisition of an interest in Real Property in accordance with the provisions of the Delegation of Authority By-law 2005-503, as amended from time to time.

Departmental Needs Assessment– a report documenting the need for and purpose of the Acquisition, from the Client Department’s perspective.

Expropriation- means acquiring Real Property without the consent of the owner, by an expropriating authority in the exercise of its statutory powers.

Market Value -the amount that the land and improvements might be expected to realize, if sold in the open market by a willing seller to a willing buyer.

Public-Private Partnerships (P3) - legal agreements between government and private sector entities, for the purpose of providing public infrastructure, community facilities and related municipal services.

Real Estate Professional - an individual or firm qualified to provide, in accordance with the City’s current standing offer(s), Appraisal and/or Real Estate Consulting Services. 

Real Property – includes any right, interest or benefit in land, but is not limited to, fee simple acquisitions, leases, permanent easements, rights-of-way and other limited interests such as joint-use agreements, temporary working easements, consents to enter, and licences.

Enquiries

For more information on this policy, contact:

Real Estate Partnerships & Development Office
Manager, Realty Services
City of Ottawa
Tel: (613) 580-2400 ext. 21549