DISPOSITION OF SURPLUS SCHOOL PROPERTIES

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DISPOSITION OF SURPLUS SCHOOL PROPERTIES
Angelo Sangiorgio Deputy Director of Planning and
Facilities Toronto Catholic District School
Board April, 2008
2
Why Are We Even Dealing With The Issue of
Disposition

• Declining Enrolment
• School Accommodation Review/Closure
• Insufficient Capital Funding
• Need to Optimize Real Property Assets of the
  Board
• Urban Intensification

3
Requirements of Ontario Regulation 444/98 Made
Under the Education Act

• Declare Property Surplus
• A School Board must adopt a resolution under
  clause 194 (3) (a) declaring property surplus to
  the needs of the Board.

4
Requirements of Ontario Regulation 444/98 Made
Under the Education Act

• Issuance of Proposal
• The Board must issue a proposal to sell, lease
  or otherwise dispose of the property to each of
  the public bodies identified in the Regulation.
• Public bodies have 90 days from the date of
  proposal to submit an offer, at fair market
  value, in accordance with the Regulation.

5
Due Diligence Management of Disposition Process

• Request for Quotation (RFQ) process for the
  appointment of Real Property Consultants for
  preparation of the following
• Planning Consultant Report to determine highest
  and best use.
• Appraisal
• Survey
• Environmental Phase 1 and Phase 2 Assessments

6
Methods of Disposition Management of
Disposition Process

• Toronto Catholic District School Board
• Disposal of Surplus Real Property Policy
  R.08
• The Toronto Catholic District School Board
  shall approve the method of sale to be used for
  the disposal of each specific real property prior
  to marketing, usually one of the following
• a) Buyer Proposal Call Publicly advertised
  indication of the Board's intent to sell,
  soliciting submissions for the purchase of
  specific real properties at prices and terms to
  be negotiated.

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Methods of Disposition Continued

• b) Negotiated Sale Call Publicly advertised
  offer requesting submissions to purchase specific
  real properties. An asking price and terms shall
  be stipulated, which may be negotiated.
• c) Listed Sale Call Publicly advertised listing,
  either open or exclusive, of a specific property
  through a Real Estate Board Multiple Listing
  Service, or an individual registered real estate
  broker. The asking price and terms shall be
  specified and may be negotiated, subject to a
  confidential reserve price previously established
  by the Board.
• Board approval required for all final
  sale/lease of surplus properties.

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Alternative Methods of Disposition Continuum of
Creating Value

• The alternative methods below are currently
  outside of the current TCDSB Policy.
• Board as a Joint Venture Partner
• Another alternative is for the Board to seek
  a joint venture developer/partner to not only
  upzone the lands but to also develop the
  property. This would entail an agreement being
  executed that details the partnership structure,
  who contributes what to the partnership, who
  operates the partnership and how the profits
  are distributed prior to the winding down of the
  joint venture corporation.

9
Alternative Methods of Disposition Continuum of
Creating Value Continued

• This allows the Board to benefit from the
  upzoning and potential redevelopment of the
  property but share, or even mitigate, against the
  risk. This is not an uncommon strategy in the
  development industry and many landowners enter
  into agreements with reputable developers/builders
  to enhance their returns.
• In fact TCDSB did this with the redevelopment
  of the former St. Edward CES site. This allowed
  the Board to generate sufficient Proceeds of
  Disposition to construct and pay for Cardinal
  Carter Academy for the Arts.

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Alternative Methods of Disposition Continuum of
Creating Value Continued

• Board as Developer
• Another alternative is for the Board to
  independently up-zone the surplus property
  themselves and dispose
• Stage 1 Sale as is.
• Stage 2 To Development Approvals Stage.
• Stage 3 To Sales Marketing.

11
Toronto Catholic District School Board
Experience Declining Enrolment
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Toronto Catholic District School Board
Experience School Closures

• Since 1998/99 TCDSB has closed a total of 20
  schools (17 Elementary 3 Secondary)
• 1999/2000 8 schools closed
• 2000/2001 2 schools closed
• 2001/2002 10 schools closed

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Toronto Catholic District School Board
Experience Portfolio

• 1000 acres Market Value of 1Billion
• 12 Million square feet Replacement Value of
  2.4 Billion
• Deferred Maintenance Backlog 280 Million
• Annual Deferred Maintenance Requirements (2008)
  63.6 Million
• Annual Renewal Funding 15 Million
• Cost to keep closed schools increases annually

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Toronto Catholic District School Board
Experience Recent Dispositions

• In 2007 the TCDSB declared 7 properties
  (including 1 vacant site) surplus.
• The total site size of surplus properties 14.92
  acres.
• GFA of surplus school buildings 235,288 sq.ft.
• Potential Revenue (Sale) Estimated Value
  22,380,000.

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Toronto Catholic District School Board Recent
Acquisitions

• Since 2001 TCDSB has acquired 15 properties
  (combination of previously leased school
  facilities and sites).
• Total Final Purchase Price of 64.86 M.
• Estimated Additional Costs (Legal Fees/
  Demolition/ Site Requirements/Ongoing
  Maintenance)