501 Adelaide Street East: Closing Report

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501 Adelaide Street East: Closing Report Item 5 November 15, 2010 Building & Investment Committee To: Building & Investment Committee Report: BIC:2010-29 From: Chief Executive Officer Date: September

1 501 Adelaide Street East: Closing Report Item 5 November 15, 2010 Building & Investment Committee To: Building & Investment Committee Report: BIC: From: Chief Executive Officer Date: September 30, 2010 Page 1 of 6 PURPOSE: To provide a final update on the status of the development at 501 Adelaide Street East. RECOMMENDATION It is recommended that the Building Investment Committee receive this report for information. INTRODUCTION: Toronto Community Housing acquired a 30,235 square foot property at 288 King Street East in 2006 from Context Development Corporation as a site for building Regent Park replacement units mixed with affordable rental. The property, fronting King Street East to the south and Adelaide Street East to the north, was zoned for the development of a mid-rise residential building with a 14-storey height restriction. While Context had originally planned to develop a market condominium on the site, this zoning was also suitable for affordable rental housing. Toronto Community Housing Corporation worked within the existing zoning regulations to develop a building similar in size and appearance to the previously conceived condominium project. Context and Toronto Community Housing Corporation entered into a Development/Construction Agreement for the project whereby Context built the building on behalf of Toronto Community Housing. Construction on 501 Adelaide St East began in the summer of 2007 and was completed in the summer of 2009.

2 Report: BIC: Page 2 of 6 BUILDING PROGRAM: 501 Adelaide is comprised of a residential component, identified as 501 Adelaide Street East, and a retail component, identified as 288 King Street East. The total GFA of the structure is approximately 220,000 sq ft, of which 200,000 sq ft is residential area and 20,000 is retail area. The residential component contains 180 units of family-oriented rental housing. As per the Affordable Housing Agreements between Toronto Community Housing and the City of Toronto, 501 Adelaide will be designating 11 two bedroom units for Victims of Domestic Violence (VDV). Table 1: Basic Building Information Architect: ArchitectsAlliance Construction Manager: Context / Bluescape Units: 180 Height: 14 Storeys Residential Gross Floor Area: 200,000 sq ft Commercial Gross Floor Area: 20,000 sq ft Parking Stalls: 80-3 ground floor common rooms: Conference /party room with kitchenette, family room with television and seating, third room Amenities: currently open to programming. Second floor meeting room. - Outdoor courtyard featuring landscaping and splash pad. - In suite Heat Recovery Ventilators (HRVs) - High efficiency boilers - Two pipe fan-coil heating and cooling system Energy Efficient Features: - Power pipe copper coil in showers - Low flow fixtures - 25% below the Model National Energy Code for Buildings costs Table 2: Current unit mix of Regent Park Replacement units and Affordable Rental units UNIT TYPE TOTAL Regent Park Replacement Units Affordable Rental Units TOTAL The ratio of Regent Park Replacement units to Affordable Rental units became higher than the original target because 501 Adelaide was the first available building for returning Regent Park tenants. It was anticipated that there would be a higher demand for Regent Park Replacement units but the demand was not realized until Phase 2 tenants began relocation.. The majority of the amenity space is located in 3 distinct ground floor spaces including a large conference / party room featuring a kitchenette and bathroom facilities, a family room equipped with seating and a television and a third room which is open to various programming, currently utilized as an accessibility showcase for tenants. All 3 rooms feature glass walls and double height ceilings creating open and well lit spaces. The building also includes an outdoor courtyard featuring landscaping, seating and a splash pad.

3 Report: BIC: Page 3 of 6 FINANCIAL: The total approved budget for the project was $49.05 million in March 2007, exclusive of GST and exemptions. The projected budget as of September 2010 is estimated at $48,850,000, leaving a surplus of approximately $200,000. Board Approved Budget Board Approved Cost / Sq Ft Projected Budget Projected Cost / Sq Ft Land $9,000,000 $40.70 $9,041,845 $40.90 Site $500,000 $2.26 $403,581 $1.80 Hard $34,648,254 $ $35,574,220 $ Soft $4,897,648 $22.20 $3,779,446 $17.10 TOTAL $49,045,902 $ $48,799,092 $ Sources of Funds for this project were: Long term debt, based on net operating income of the building, totaling $17.05M. Grants under the Affordable Housing Program provided totaling $9.8 million; and The allocation of Toronto Community Housing equity contributions from Regent Park Redevelopment to off-site replacement units totaling $22.2 million. Based on the estimate at the time of approval no additional equity contribution would be required and this continues to be the case. The building features a high end furniture retailer, Kiosk, fronting onto King Street. The lease for this space constitutes a new stream of income for Toronto Community Housing. Moreover, the presence of a high end store in a building created for low and moderate income Torontonians is a clear indication the affordable housing nature of the building does not impact commercial use or value. SCHEDULE: The original project schedule for 501 Adelaide projected an occupancy date of May 11, Occupancy was officially achieved Sept 1, 2009 delaying the project by approximately 4 months. The most significant reason for delay can be attributed to the city strike which lasted from June 22, 2009 to August 4, During this time frame city staff were unable to review the project to approve the occupancy permit application. CURRENT STATUS: 501 Adelaide achieved occupancy in Sept Move-ins have been ongoing and the building is now approximately 90% occupied, aiming to achieve full occupancy by Q Staff have commented on the lengthy occupancy period below. The retail component, at 288 King St, is under construction, currently completing the finishes stage. Kiosk, the retail tenant, is aiming to open their furniture store to the public by the end of October Staff is estimating that all remaining Toronto Community Housing costs will not exceed $35,000. Work pending completion, including the installation of an A/C unit in the elevator

4 Report: BIC: Page 4 of 6 machine room, glazing replacement, front entrance repair and other minor deficiency work, is expected to be completed before the end of There are no remaining Affordable Housing grants to be received and the Provincial Affordability payments have been triggered for annual installments to Toronto Community Housing. THIRD PARTY RECOGNITION: Media Coverage - Architectural King St. E. has it all let s not ruin it now Toronto Star, Christopher Hume, Aug 15, 200 In his article King St. E. has it all let s not ruin it now, Christopher Hume gives top marks to 501 Adelaide describing it as a beautiful building that shows attention to detail. The Condo Critic awarded 501 Adelaide an A grade and explains to the reader that something good has happened when the Toronto Community Housing Corp. builds residential towers as beautiful as this one. The critic also comments that the building shows someone cares, as if the builders wanted to do something worthy not just of the inhabitants but the city and that it is an example of 21 st -century residential architecture at its best. LESSONS TO BE APPLIED: Communication - Improved communication between Development, Operations and HSI during the design stage of the project to help prevent issues relating to architectural, mechanical and electrical building components. Enhancing the coordination between the design team and end users will help to circumvent similar issues on future projects. Operations and HSI should be given the opportunity to play a more influential role at design meetings early in the process. It is important to receive feedback from Operations and HSI in seeking out potential design problems as they relate to the ongoing maintenance of the building as this may help to cut capital and operating costs after turnover. Relationships with Commercial Tenants - Building a strong relationship with Kiosk, the commercial tenant at 501 Adelaide was important. Together, Toronto Community Housing and Kiosk worked in collaboration with the Construction Management team to create a complex retail space that took coordination from all parties throughout the construction process. Without this relationship overcoming issues and ensuring a successful project would have been much more strenuous for both Toronto Community Housing Corporation and Kiosk. Maintenance Schedule - Proper maintenance is an important piece to the functionality and longevity of building systems. To assist operations staff in ensuring proper function, longevity and warranty coverage of building systems, a maintenance schedule should be provided to Operations. This initiative would fall under the responsibility of the Construction Manager and built into the contract between Toronto Community Housing and the Construction Management firm. The schedule would be included within the building turnover package and provided to Operations and HSI.

5 Report: BIC: Page 5 of 6 Delayed Occupancy Period Adelaide experienced a drawn out occupancy period that commenced in September 2009 and will be completed by Q This delay can be attributed to the fact that there were more units available than tenants that were available to move in. Of the 381 tenants that moved out of Regent Park Phase 1, approximately 200 opted to return. Therefore, high vacancy rates continued at 501 Adelaide until Regent Park Phase 2 tenants were available to move in. However, the excess in available units meant Toronto Community Housing did not have to cover the cost of temporary relocation. A cost analysis would be a useful tool to compare the cost of the vacancy loss against the cost of providing temporary residences. Moving forward, it may be inevitable that the timing between demolition of old units and construction of new units will create some vacancy loss. However this may be a positive outcome when there are new units available to returning tenants. Phased Occupancy Staff made the decision to use a phased occupancy approach to begin moving tenants into 501 Adelaide. The construction management team made the appropriate modifications to the building to accommodate this approach. However, staff does not plan to use phased occupancy on future projects due to the possible complications associated with mixing tenants and construction activity. Off Site Replacement Units - Many Regent Park tenants do not want to leave the foot print of Regent Park especially if they require parking (501 Adelaide has 80 parking stalls for 180 units). The relocation office also stated that the location far from the community and services of Regent Park was deemed as less desirable. The retail in this area is also not as desirable for those on low incomes. Amenity Space Programming - Staff originally anticipated that the amenity space at 501 Adelaide would include a ground floor computer room that would be operated by an outside agency. Due to the lack of programming this initiative has not been executed. As a result, the space is currently being used as an accessibility show case for tenants. The concept for amenity space needs to be thoroughly investigated early in the design stage as these decisions can ultimately impact the design and use of space. The Operating Unit, the Community Health Officer and the Revitalization Consultant should be included in the design stages to determine what is realistically attainable for amenity space programming. In this way spaces can be designed for programs that can be funded, or understood to be multipurpose spaces. Construction Management Team Context / Bluescape and Toronto Community Housing entered into a Development/Construction Agreement whereby Context / Bluescape took on the role of Construction Manager. Toronto Community Housing s experience working with Context / Bluescape was very positive in that the project was completed within budget and did not experience substantial construction delays. Their team offered valuable advice and were responsive and helpful in overcoming obstacles throughout the course of the project. The deficiency process was coordinated very well between Toronto Community Housing and the construction management team to ensure all problems were rectified promptly. Staff highly recommends the Context / Bluescape team for future Toronto Community Housing Corporation development projects.

6 Report: BIC: Page 6 of 6 Tenant Feedback - At this point, there is no formal way of collecting feedback from tenants after a building is occupied. Staff have initiated a process to design a post occupancy survey for tenants. The objective would be to obtain feedback which is useful to staff in future building design and in managing the existing building. Keiko Nakamura Chief Executive Officer Staff Contact: John Fox A/Vice President, Development John.Fox@torontohousing.ca Staff Contact: Lizette Zuniga Director, Real Estate and Development Lizette.Zuniga@torontohousing.ca

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