Parks & Recreation Department. Date to Committee: October 3, 2012 Date to Council: October 15, 2012

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1 Page 1 of Report PR TO: Community Services Committee Parks & Recreation Department SUBJECT: Beachway Park Pump House RFEI Process Report Number: PR File Number(s): Report Date: September 7, 2012 Ward(s) Affected: All Date to Committee: October 3, 2012 Date to Council: October 15, 2012 Recommendation: Direct the Director of Parks and Recreation to solicit third party interest for the lease and operation of the Beachway Park Pump House as per the process outlined in Report PR Purpose: Address goal or action in strategic plan Establish new or revised policy or service standard Respond to legislation Respond to staff direction Address other area of responsibility Reference to Strategic Plan: Vibrant Neighbourhoods Prosperity Excellence in Government N/A 1. Nurture an innovative business community and work with partners to create employment and lifestyle opportunities for people of all ages. g) Ensure a welcoming, active and accessible waterfront. Background: Pertinent Council Resolution April 30, 2012 Direct the Director of Parks and Recreation to report back on the process and timing for issuing a Request for Expressions of Interest (RFEI) to attract a private sector retailer to lease the former pump house on the Beach. The aim is to provide additional food and beverage service to visitors to the Beach. The process should include recognition of the historic designation of the building, dialogue with neighbours and discussion around the costs associated with any renovations and upgrades to the building. (Councillor Rick Craven) (SD-14-12)

2 Page 2 of Report PR Discussion: The Burlington Beach pump house is currently utilized as a storage facility. The intent of Council s direction is to seek opportunities in the marketplace for an alternative use that would optimize this facility and potentially provide year round services complimentary to the park. Over the past several months staff have undertaken due diligence to better understand the current condition of the pump house and the requirements for moving forward with a potential lease opportunity for this facility. The following provides a summary of staff s review and a recommended process for moving forward. Historical Overview The pump house was built in 1909 as part of a new waterworks system to provide piped water from Lake Ontario to Burlington residents and reduce reliance on well supplies. Construction of the new waterworks system was seen as a catalyst for the growth, development and betterment of the Village of Burlington. The pump house was in service from 1910 to The building was then used as a residence for the next 50 years. The building was purchased by the City in The building sits on Conservation Halton (CH) lands, however the building itself is owned by the City. While CH owns the majority of the lands that comprise Beachway Park, both the City and the Region of Halton own various adjacent parcels. The City is responsible for the operational aspects of the Park under a lease/operating agreement with CH. The pump house was designated as a heritage property in 1992, recognizing the historical and architectural significance of this building. After acquisition, the pump house was used as an operational centre for lifeguard staff when the beach was directly supervised by city staff. Currently the building is used for storage to support the beach pavilion concession and Parks and Recreation Department operations. Building Information The pump house is a one-storey building with a full basement. It has a concrete foundation structure and solid brick exterior. The main entrance access is 4 steps up from grade level which presents an accessibility challenge.

3 Page 3 of Report PR The original building has a gross floor area of approximately 780 square feet that is partitioned into 4 rooms. A 200 square foot addition was built on the lake-side of the building for a kitchen. This addition has a faux brick exterior cladding and is in poor condition. This area of the facility is not under the heritage designation. The building is serviced by a 5 / 8 water-main and a ½ natural gas supply. The sanitary system is a septic tank and weeping tile system which is currently not functional. In the summer of 2012, a new slate roof and gutters were installed and the fascia and soffits were restored. A new 200 amp electrical service was also installed. The cost of this work was $45,000. The pump house is in an active area of the park between the beach pavilion and a playground. The multi-use path at Beachway Park provides significant exposure to the building. Related Initiatives As Council is aware, the Burlington Beach Master Plan is currently in progress. This initiative will establish a desired functional plan for the park and identify capital priorities. As part of this initiative, an area servicing assessment is being undertaken by Halton Region which will assess municipal water, sanitary sewer and storm water management options for the area. Both of these initiatives have implications to the pump house initiative in terms of functional integration within the park and servicing opportunities. Jurisdictional Matters The following provides a snapshot of the various jurisdictional matters and requirements that will need to be addressed as part of this initiative. Provincial Policy Regard for the Provincial Policy Statement and Places to Grow. City of Burlington Official Plan and Zoning By-Law Beachway Park is zoned PC-Community Park which allows recreational uses. As these lands fall under the City s control (through the lease), the City may use the rights it has under the Public Authority clause of the Zoning By-Law to permit alternative and complimentary uses, however, only through careful consideration. City Permits/Building Code Depending on the scope of the improvements required to support a food service establishment, a city building permit may be required. The building will have to meet current code requirements. Items such as waste management, parking, fire code, and accessibility will need to be considered carefully.

4 Page 4 of Report PR Taxation Any tenant operating a business in the building under a lease agreement may be subject to municipal realty or business tax. Heritage Designation Any improvements to the pump house must respect the heritage features of the building as per the heritage designation by-law. Depending on the uses contemplated, kitchen exhaust vents may alter the architecture and heritage value of the building. Conservation Halton The pump house is located within the Dynamic Beach Regulated Hazard Area as defined by CH. Any change in use will require CH approval, and any building renovations or site servicing will require CH development and demolition permits. No building additions are permitted in this zone. Exterior patios, decks, concrete pads, waste facilities, and servicing works all require CH approval. Halton Region Beachway Park is designated as a Regional Waterfront Park and an Environmentally Sensitive Area in the Region s Official Plan, and therefore is subject to various policies and regulations regarding use, development and protection. Water and sewer connections require the Region s approval. Full urban sanitary sewer connections are currently not permitted in this area. Staff will investigate the opportunity to connect to the beach pavilion septic system and determine if there is sufficient capacity to support uses identified for the pump house. Licensing Agencies The successful proponent will need to ensure that they can obtain necessary licenses to operate from the AGCO and the Region s Health Department for a food service establishment. Lease Agreement A lease agreement will have to be developed and executed. Nearby Waterfront Food Service Establishments Related to the idea of establishing a food service business at the pump house, staff note the following nearby waterfront food service businesses which may compete with the pump house depending on the market niche that is pursued: Beachway Park Pavilion Snack Shack (distance 50m) concession/snack foods The Bite at the Waterfront Centre (distance 1.4km) prepared fast foods e.g. burgers, fries, ice cream. Hutches on the Beach in Hamilton (distance 6.5km) prepared fast foods, sit down restaurant e.g. burgers, fries, fish and chips, ice cream. Baranga s on the Beach in Hamilton (distance 7.1km) casual dining, bar and patio

5 Page 5 of Report PR Capital Improvements Various capital improvements are needed to stabilize and prepare the building for lease and occupancy. The following provides a high level estimate of costs. Stabilization (structural and building envelope) Estimate $30-$40K Occupancy & Building Code Requirements Estimate $20-30K Servicing Upgrades Estimate unknown: related to Halton Region municipal water and sanitary sewer provisions and capacities Leasehold Improvements Estimate unknown: depending on tenant requirements The following table provides a general description of the work in each of the four categories: Category 1. Stabilization (structural and building envelope) 2. Occupancy/ Building Code 3. Servicing Upgrades 4. Leasehold Improvements Description of Work Masonry repairs brick re-pointing, front steps, window sills. Interior removals basement wall panelling, ceiling tiles, washroom fixtures, non-structural partitions. Structural demolition rear kitchen addition including asbestos containment. Windows and doors replace 2 windows and door at exterior wall to heritage specifications. Building accessibility improvements ramps, entrance thresholds Fire and life safety systems Water heater HVAC system remove and replace with new system including ductwork. Heritage restoration (interior/exterior) windows, doors, trim and millwork. Interior wall, floor, ceiling repairs and paint priming. Re-instate a basic functioning washroom facility. Sanitary system need for a force-main. Design and capacity depends on use. Approvals needed from Region and Conservation Halton. Water service upgrade existing 5 /8 service as needed. Natural gas service upgrade existing ½ service as needed. Telecommunication service upgrade cable, telephone, high speed telecommunication lines as needed. Interior layout modifications Plumbing modifications to suit new water supply and waste piping as required and to meet code Electrical wiring and end device modifications to suit Installation of operating equipment and millwork (kitchen) New washroom facilities per code including accessibility washroom. Interior finishing paint to suit, floor re-finishing, fixtures as needed. Ceiling refinishing remove existing acoustic tile ceilings and expose and refinish original heritage tin ceiling (optional) Exterior patios, decks, waste facilities, hard and soft landscaping, signage as needed and as approved by agencies.

6 Page 6 of Report PR The cost estimate to stabilize, restore and generally upgrade the safety and functionality of the building in preparation for a potential lease opportunity or basic City use is between $50,000 - $70,000 (as per categories 1 and 2). Currently there is $62,000 of funding approved in prior years under the Corporate Building Envelope account to address most of the items. Categories 3 and 4 list additional improvements that would be needed to support a food service business. These costs are unknown at this time and depend on the type of use proposed. Servicing costs (category 3) would likely be absorbed by the City as it may be unreasonable to expect a tenant to pay for something that they will not benefit from beyond the term of their lease agreement. Recommended Process for RFEI/RFP Staff recommend the following process to solicit interest for the lease and operation of the pump house. Stage Activity Timeline RFEI RFP Implement a. CSC consideration of Report PR Oct 3, 2012 b. Council consideration of Report PR Oct 15, 2012 c. RFEI development, issuance & analysis of results Oct-Dec, 2012 d. Consult with Beachway Park Master Plan Team to discuss feasibility, preferred uses and to inform RFP. Nov-Dec 2012 e. Report to CSC only if feasibility is in question or if staff feel that further Council consideration is required. Pending f. RFP development, issuance and analysis, including Master Plan Team consultation. Jan Mar 2013 g. Report to CSC>>>Council Apr 2013 h. Lease agreement development and execution Apr Jun 2013 i. City capital improvements (subject to budget approval) Apr July 2013 j. Tennant improvements Jun Sept 2013 k. Business opening Oct 2013 Staff recommend a rolling process to expedite and maintain momentum for this initiative. The RFEI process is intended to gauge market interest and feasibility. If prospects look good through the RFEI stage, then staff will proceed to the formal RFP stage. At the conclusion of the RFP stage, staff will report back to Council on the results and recommendations for moving forward. If prospects do not look good, or if staff encounter serious technical issues that affect the viability of this initiative at any time during the process, staff will pause and report back to Council. It should be noted that any hold-up in agency approvals could delay the schedule outlined above. As previously noted, a major risk at this time relates to the study being performed by Halton Region related to municipal water and sanitary sewer provisions. Staff will notify Council of any delays in the timelines via memorandums.

7 Page 7 of Report PR With respect to the RFEI stage, staff feel that it would be prudent to widen the scope of this opportunity to other potential uses as market should identify what opportunities may exist. Too narrow of a scope may limit opportunities that may not be known to staff or Council at this time. Should Council feel this is a reasonable approach, a staff direction should be approved. Staff offer the following draft direction for Council s consideration: Direct the Director of Parks and Recreation to expand the scope of the Pump House Lease RFEI to include food service operations as well any other retail or commercial operations that would provide complimentary services for Beachway Park. Financial Matters: In order to generate market interest for this lease opportunity, the City will have to invest money towards the improvement of the pump house. As noted earlier $62,000 is already set aside for building stabilization and functional improvements. Additional capital funding will be required for servicing upgrades and mechanical systems (HVAC and water heater). Staff will investigate the cost and funding for these aspects as part of the 2013 capital budget process. Related to the decision making moving forward with a potential tenant, the return on capital investment as well as the coverage of on-going baseline operating expenses will both be considered. If the City is successful in securing a solid tenant, then the pump house will become primarily a revenue source with some operating expenses. Operating expenses would be limited to staff administration and some operational services related to landlord responsibilities. In order to ensure the sustainability of the asset the City should ensure sufficient capital repair and renewal funding over the long term. Environmental Matters: The pump house is located within the Dynamic Beach Regulated Hazard Area as defined by Conservation Halton and is identified as an ESA under the Halton Region Official Plan. Building and site improvements will have regard to the natural beach environment and character. Approvals will be needed from Conservation Halton and the Region. Tenants will be expected to adopt environmentally focussed operational practices related to waste management, the use of green products and materials where possible, and energy saving initiatives where possible. Communication Matters: The RFEI and RFP opportunities will be advertised through local newspapers, the City s web site, BIDDINGO and restaurant associations. Staff will ensure consultation with the Beachway Park Master Plan Team to ensure the feasibility of this initiative and to establish a use for the pump house that will compliment future park plans.

8 Page 8 of Report PR Conclusion: The Burlington Beach pump house is an underutilized city building. Council expressed interest in exploring the possibility of leasing the building for a food service business. This report recommends a process to solicit market interest for the lease of the building. The report also identifies a number of technical, financial and jurisdictional matters that will need to be addressed as the City proceeds with this initiative. Respectfully submitted, Jim Seferiades Planner, Business Services (905) ext Appendices: N/A Notifications: (after Council decision) Name Mailing or Address Approvals: *required *Department City Treasurer General Manager City Manager Committee Disposition & Comments Council Disposition & Comments To be completed by the Clerks Department 01-Approved 02-Not Approved 03-Amended 04-Referred 06-Received & Filed 07-Withdrawn 01-Approved 02-Not Approved 03-Amended 04-Referred 06-Received & Filed 07-Withdrawn

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