Permission to Repair, Restore and Maintain Existing Underground Areaways at 176 Yonge Street and 401 Bay Street, Hudson's Bay Company

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1 STAFF REPORT ACTION REQUIRED Permission to Repair, Restore and Maintain Existing Underground Areaways at 176 Yonge Street and 401 Bay Street, Hudson's Bay Company Date: July 24, 2014 To: From: Toronto and East York Community Council Manager, Right of Way Management, Transportation Services Toronto and East York District Wards: Toronto Centre-Rosedale Ward 28 Reference Number: Te te.row SUMMARY This staff report is about a matter for which Community Council has delegated authority from City Council to make a final decision. Transportation Services has assessed a request from the Hudson's Bay Company (HBC) to repair, restore and maintain various existing underground areaways that are connected to the building at 176 Yonge Street and 401 Bay Street, which encroach underneath the City sidewalk surrounding the site. As the repair, restoration and maintenance of the existing areaways will not impact negatively on the public right of way, Transportation Services recommends approval of the encroachments. RECOMMENDATIONS Transportation Services recommends that Toronto and East York Community Council: 1. approve the request to repair, restore and maintain the existing areaways that encroach underneath the City sidewalk along the Richmond Street, Bay Street and Queen Street West rights of way surrounding the building at 176 Yonge Street and 401 Bay Street. Approval is subject to HBC entering into an encroachment Repair, Restore and Maintain Existing Areaways 176 Yonge Street 1

2 agreement (the "Agreement") with the City of Toronto, agreeing but not limited to the following: a. HBC to maintain the areaways in good repair and condition, at their own expense to the satisfaction of the General Manager of Transportation Services and to agree not make or permit any additions or modifications to the encroachment beyond what is allowed under the terms of the Agreement; b. HBC shall provide and maintain an irrevocable letter of credit, the amount of which to be determined by Engineering & Construction Services, to be retained by the City for a renewable two (2) year period from the date that the works is completed, to secure against any damage to the City right of way and to guarantee that the work within the public right of way is completed to the City's satisfaction. c. HBC to repair, restore and maintain the areaways in good repair and condition, at their own expense to the satisfaction of the General Manager of Transportation Services and to agree not make or permit any additions or modifications to the encroachment beyond what is allowed under the terms of the Agreement; d. the City shall not be responsible for repairing or replacing the encroachments damaged as a result of clearing or removing litter, graffiti, posters, snow or ice, or as a result of street repairs or construction; e. the City shall maintain the right to place pipes, cables, wires, poles and other infrastructure within the encroachment; f. the City shall be released from and against all actions, suits, claims or demands and from all loss, costs, damages and expenses that may result from such permission granted in form and content satisfactory to the City Solicitor; g. HBC to indemnify the City from and against all actions, suits, claims or demands and from all loss, costs, damages and expenses that may result from such permission granted, any matter related to the areaways, and any failure of HBC to comply with the Agreement, in form and content satisfactory to the City Solicitor; h. HBC to provide and maintain public liability and property damage insurance with an insurer satisfactory to the General Manager of Transportation Services for the lifetime of the Agreement in a form as approved by the Deputy City Manager and Chief Financial Officer, including a cross-liability /severability of interest clause, a provision that Repair, Restore and Maintain Existing Areaways 176 Yonge Street 2

3 the insurance is primary before the insurance of the City, and a 30 day prior notice of cancelation/renewal clause, and in the amount not less than $10 million or such greater amount as the Deputy City Manager and Chief Financial Officer may require; i. pay for the costs of preparing the Agreement and the registration of the Agreement on title; j. pay an annual rental fee in the amount of $117, for the encroaching underground areaways as determined by the Director of Real Estate Services; k. new annual rental fees be calculated for the underground areaways every successive five year period, based on the current market value of the lands, as determined by the Director of Real Estate Services; l. obtain approval for associated work from the Toronto Building Division, if required; m. HBC to obtain all PUCC clearances and/or sign-offs from the public utility companies and satisfy any requirements they may have; n. HBC to obtain approval and all necessary permits for any repairs to the areaways from the Toronto Building Division, if required; o. HBC to provide as-built drawings within 60 days of completing the repair and restoration of the areaways to Survey and Mapping, Attention: Utility Mapping Supervisor, Metro Hall, 55 John Street, 16 th Floor, Toronto, Ontario, M5V 3C6; p. the life of the Agreement to be limited to the removal of the encroachments or the date of the demolition of the building at 176 Yonge Street and 401 Bay Street, whichever is the less; q. HBC will at its own cost, charge and expense and to the satisfaction of the General Manager of Transportation Services alter or remove the encroachments either on the demolition of the building at 176 Yonge Street or, if deemed necessary by the General Manager of Transportation Services for municipal purposes upon receiving not less than ninety (90) days notice in writing by the General Manager of Transportation Services; r. prior to commencement of construction, a street work permit to be obtained by HBC in accordance with Article III of Chapter 743, Streets and Sidewalks, City of Toronto Municipal Code; the Agreement to be registered on title to HBC's property, at the expense of HBC, with Repair, Restore and Maintain Existing Areaways 176 Yonge Street 3

4 appropriate title opinions provided to the satisfaction of the City Solicitor as may be required by the City Solicitor; s. the provisions of Appendix 'A' to this report shall be substantially incorporated into the Agreement to the satisfaction of the General Manager of Transportation Services; t. the City shall have the right of entry on the affected property for the purposes of inspection, repair, or removal of the areaways or performing any other activity permitted by the City under the Agreement, on terms acceptable to the General Manager of Transportation; u. the Agreement shall include rights and remedies acceptable to the General Manager of Transportation including the right, but not the obligation, of the City to remedy any failure of HBC to comply with the Agreement, and the costs incurred by the City in enforcing the Agreement shall be payable by HBC; v. accept such additional conditions as the General Manager of Transportation Services may deem necessary in the interest of the City; and 2. Direct the General Manager of Transportation Services to extend the Agreement to the new owner or lessee, in the event of sale or transfer of the properties abutting or encumbered by the encroachments, subject to the prior approval of the General Manager of Transportation Services in respect of HBC's property, and provided in all cases the transferee or assignee enters into an assumption agreement with the City to assume the obligations under the Agreement, in form satisfactory to the City; and 3. Request the City Solicitor to prepare and arrange execution and registration of the Agreement as required by this report. Financial Impact There are no financial implications as a result of the recommendations contained in this report as repair, restoration and maintenance costs of the areaways will be borne by the applicant. ISSUE BACKGROUND An application has been received by HBC requesting permission to repair, restore and maintain existing areaways that encroach beneath the City sidewalk surrounding the building at 176 Yonge Street and 401 Bay Street. Photos of the site are shown on Appendix 'B'. HBC is the lessee of the property bounded by Yonge Street, Richmond Street West, Bay Street and Queen Street West and is municipally known as 176 Yonge Street and 401 Repair, Restore and Maintain Existing Areaways 176 Yonge Street 4

5 Bay Street. The HBC block is entirely occupied by "The Bay" department store, having the municipal address of 176 Yonge Street and the office tower at the corner of Bay and Queen Streets having the municipal address of 401 Bay Street. The existing areaways form part of the basement of the store building and extend beneath the City sidewalk on Richmond Street, Yonge Street, Bay Street and Queen Street. It is assumed by HBC that the areaways were initially constructed for the purpose of accommodating coal chutes used for delivery of fuel to the furnaces used in heating the original store premises. HBC has advised that the block is now owned by Ontrea Inc. and is leased back to HBC pursuant to a lease agreement between the said parties. Under the terms of the lease, HBC is authorized by Ontrea Inc. to submit an application to the City and to carry out, at its sole cost, all of the proposed Richmond Street underground areaway work and to perform such other work and fulfill any and all such other obligations as may be required by the City. In November 2013 representatives of Engineering and Construction Services consulted with HBC about capital works projects and other work the City is undertaking on Richmond Street. At the time, HBC was advised that the City's representatives were of the opinion that the areaways located beneath Richmond Street, as shown as Parts 2, 3, 4, 5 and 6 in the reference plan attached as Appendix 'C', were not structurally sound enough to allow the City to carry out its intended work in the vicinity. HBC thereupon conducted its own investigations of the structural stability and condition of the Richmond Street areaways and continued to consult with the City's representatives to determine the extent to which the work in and to the areaways might be required to ensure public safety and to accommodate the City's requirements. HBC was further advised that the City will not proceed with any of its intended work in and upon that part of Richmond Street until the Engineering and Construction Services and Transportation Services staff are satisfied that the areaways are structurally sound and will pose no threat to public safety. In February, Engineering and Construction Services, acting in its sole discretion, erected barriers prohibiting pedestrians from using that section of the sidewalk on the north side of Richmond Street adjacent to the store premises. The barriers remain on site and may not be removed until such time as Engineering and Construction Services and Transportation Services have determined that the area to be safe for public use. COMMENTS The presence of the barriers significantly interferes with HBC's store operations as it blocks access to the store from Richmond Street and prevents the continued operation of the valet parking service provided to HBC's customers from the principal entrance from Richmond Street and the use of certain fire escape doors leading to the street. HBC has concluded that the underground areaways along Richmond Street are not structurally sound enough to meet the City's requirements and that the work detailed in their application will ensure the areaways's structural stability. In the meantime, HBC Repair, Restore and Maintain Existing Areaways 176 Yonge Street 5

6 has carried out repairs and other work in the Richmond Street areaways to ensure they are safe enough for HBC's continued use and occupation of the same. HBC has installed shoring beneath the sidewalk slabs and have kept Engineering and Construction Services advised of the details and progress of this temporary remedial work. As such, HBC is anxious to undertake the repair and restoration work to the areaways within Richmond Street as soon as possible. Their contractors have advised that the work could take up to approximately six (6) months time to complete, depending on the commencement date, as some of the work is weather dependant and could be delayed by the onset of winter. Given the potential impact of this project on the existing City right of way, HBC will be required to provide an irrevocable letter of credit; the amount of which will be determined by Engineering and Construction Services. This is to guarantee that the work undertaken within the right of way is completed to the City's satisfaction and/or to secure against any damage that may be caused to the City right of way. The irrevocable letter of credit will be held for a renewable two (2) year period. As there may also be potential impacts to existing utility infrastructure, it will be HBC s responsibility to undergo a public utility review with a view of obtaining clearances from the affected utility agencies or satisfying their requirements prior to the issuance of a Construction Permit authorizing work within the public right of way. TTC requires the replacement of approximately five (5) pole bases and poles along the north curb line of Richmond Street West. These pole bases shall either be incorporated into the new wall structure of the areaway or accommodations made in HBC's design to facilitate the construction of the pole bases that will allow the placement of TTC HBC and Legal Services have completed a search to determine if any existing, enforceable encroachment agreements exist for the areaways and no such agreements were located. HBC has requested the City to prepare a new encroachment agreement between the City and HBC that will allow for HBC's continued use, occupation, and maintenance of the areaways identified as Parts 1 through 9 on Reference Plan attached as Appendix 'C'. Applicable regulations As Chapter 743, Streets and Sidewalks, City of Toronto Municipal Code does not provide for areaway encroachments within major arterial roadways as defined by the Road Classification System, Transportation Services is required to report on the application to Community Council. Reasons for approval Transportation Services has reviewed the application and determined that the repair, restoration and maintenance of the areaway encroachments within the Richmond Street, Repair, Restore and Maintain Existing Areaways 176 Yonge Street 6

7 Bay Street and Queen Street West rights of way surrounding 176 Yonge Street and 401 Bay Street will not impact negatively on the public right of way. Details of the encroachment are on file with Transportation Services. CONTACT Elio Capizzano, Supervisor, Right of Way Management Tel: , Fax: , SIGNATURE Andre Filippetti Manager, Right of Way Management ATTACHMENTS Appendix 'A' Additional conditions to be noted in encroachment agreement Appendix 'B' Photo of Hudson's Bay block Appendix 'C' Reference plan showing the locations of the existing areaways CAM/cam Repair, Restore and Maintain Existing Areaways 176 Yonge Street 7