Memorandum

Public Works Energy, Fleet & Facilities Division

Date: To: From: Subject:

September 11, 2008 Chris Murray, Housing Division Director Rom DAngelo, Manager, Corporate Buildings & Technical Services Declaration of Surplus Property: 52-56 Charlton Avenue West, Hamilton

OBJECTIVE The City owned property located at 52-56 Charlton Avenue West, also known as Charlton Hall is maintained and operated by the Energy, Fleet and Facilities Division of the Public Works Department. The property is comprised of an area approximately .32 acres, with 2 three-storey semi-detached residential style buildings along with a school house at the rear of the property. As the building is not currently in use for a mandated municipal program, nor earmarked for a future municipal facility that has been identified in the long term capital plan, the property will be declared surplus to the requirements of the City of Hamilton in accordance with the Procedural By-law for the Sale of Land, being By-law No. 04-299. Prior to declaring the property surplus the Energy, Fleet and Facilities Division are exploring opportunities and synergies by transferring the asset to the Housing stock with a condition of preserving the long standing relationship with Charlton Hall and Family Centre non-profit group. EXECUTIVE SUMMARY The City of Hamilton is the owner of 52-56 Charlton Avenue West. The site is currently occupied and leased by the Charlton Hall and Family Centre, a non-profit corporation. This group has had a long standing relationship with the City of Hamilton since the early 1960s. Todays leasing arrangement between the tenant and the City of Hamilton is below fair market value, the rate has been established since 1979 and is still in effect; compounded by an aging infrastructure and increasing operating costs; the asset is not financially sustainable. The property at 52-56 Charlton Avenue West is not a core facility within the City of Hamiltons corporate stock. Consequently, the City must look at divesting itself from this asset. The City can no longer support the maintenance and the capital cost for the subject property, as a result, the Energy, Fleet and Facilities Division has requested through the Real Estate Portfolio Management Committee that the site be deemed surplus in accordance with the Procedural By-law for the Sale of Land, being By-law No. 04-299. CityHousing Hamilton staff has shown great interest in the property and in light of, the capital needs to the aging infrastructure and the appraised value of the property has proposed that the asset be transferred to the Housing stock at a value of $2.00.

Subject: Declaration of Surplus Property: 52-56 Charlton Avenue West, Hamilton

As well, CityHousing Hamilton staff identified the surplus city-owned lands at 52-56 Charlton Avenue West as an opportunity, where by, in keeping to the Council policy that states a property may be leased or sold for other than market value if such an arrangement is deemed by Council to be in the public interest, CityHousing Hamilton staff believe that the continuation of the current tenant and the services offered by Charlton Hall Child and Family Centre, are well within the scope of the provision. As well, as the subject properties are listed in the Citys Inventory of Buildings of Architectural and/or Historical Interest, CityHousing Hamilton is well positioned to ensure a continued land-use and property standard of this historic property. Charlton Hall Child and Family Centre is an accredited children's mental health centre providing a range of residential and day treatment services for children and youth 6-21 years of age who are experiencing social, emotional or behavioural challenges. Of specific note, Charlton Hall is a residential treatment program providing a live-in therapeutic milieu for 10 adolescent girls aged 12-18. Day Treatment/School Programmes are operated in partnership with the Hamilton Wentworth District School Board, which focus on remediation of social, emotional and behavioural challenges which have interfered with the student's learning and functioning in a mainstream school setting. This is the only such program of its kind within the City of Hamilton, such services fill a need within the community, and there are no service agencies outside of Charlton Hall that have expressed an interest to step into fill this gap in community services. It is unlikely that any potential purchaser of the property outside of CityHousing Hamilton would take possession of the property with the existing tenant and use. Further, there is limited ability for the current tenant to endure significant increases in rent. Therefore, any provision that places the property outside of public ownership would severely threaten the community services that Charlton Hall has provided for many years. CityHousing Hamilton is well positioned to take over the ownership and property management of the property. As the Citys municipally owner municipal housing provider, the services rendered by the existing tenant fit the intent of the CityHousing Hamiltons real estate portfolio, the property would fit within its property management model, and it fits well within its mandate as the Citys provider of affordable housing and tenant services. As stated, financial restraints of the limited potential rental income and the financial risk associated with a property containing aging infrastructure make this property necessary for a price well below market value. The continuation of public ownership which in turn would ensure the continuation of the vital services provided by Charlton Hall Child and Family Centre, is well within the public interest, and is adequate justification for the transfer of the property to CityHousing Hamilton. BACKGROUND In 1960, Edith Olmstead donated 56 Charlton Avenue West to the City of Hamilton. The City of Hamilton acquired the property for the Big Sister Association for the purpose of establishing a residence for girls as recommended by the Social Planning Council of the day. The City leased the property to the Association for a sum of $2.00 per year until May 1979. In addition, the City assumed responsibility for property maintenance during this period. In May 1967 the City of Hamilton acquired 52 Charlton Avenue West for the purpose of expanding the Big Sister Associations residential service. The City purchased the property from Ralph Cooper, whose wife was a member of the Association and Honorary President until her

Subject: Declaration of Surplus Property: 52-56 Charlton Avenue West, Hamilton

death. The expansion was recommended and actively supported by the Social Planning Council. The City also undertook and completed substantial renovations to both houses including construction of a hallway to link the two homes and necessary renovations to meet provincial fire code and local building code. Charlton Hall Child and Family Centre: Charlton Hall and Family Centre is a non-profit corporation with over 80 years of service to vulnerable, young women and their families. In 2003, the agency became an accredited childrens mental health centre under the corporate name, Charlton Hall Child and Family Centre. Charlton Hall is a residential treatment program available to girls 12-17 years of age who are experiencing serious emotional, mental health, behavioural problems or developmental difficulties. Anxiety, attachment, attention deficit, conduct and post traumatic stress disorders are common diagnostic features among the residential population. Charlton Hall is a structured therapeutic environment operating seven days a week in a residential neighbourhood. Service components include individual, family and group counselling, life skills training, outdoor challenge programs, day treatment / Section 20 schooling, preparation for independence, and transitional after-care. Service is delivered by a multi-disciplinary team drawn from child and youth work and social work using a goal focused milieu treatment approach. Psychiatric and psychological resources are accessed as required. Service philosophy emphasizes the primacy and preservation of family, connectedness to community, and youth as active self-managers. The Transitions Section 20 Classroom is operated in partnership with the Hamilton-Wentworth District School Board. This co-ed program serves a core group of eight secondary level students between 12 and 17 years drawn from residential treatment and the Board of Education. Eligible students are those whose serious socio-emotional difficulties have interfered with their abilities to function and progress within mainstream educational facilities. Less intrusive interventions through the education sector will have been exhausted. The program operates from a self-contained building on-site at the Charlton Hall residential facility (detached structure at rear of 52-56 Charlton Ave W school house). Professional resources include a special education teacher, child and youth work, social work and a range of Board consultants. The classroom is structured as a small group therapeutic milieu with a focus on skill buildings and cognitive development related to conflict resolution, problem-solving and social functioning. Individualized, goal-oriented treatment plans are developed with the participation of the student and the facility. Students reintegration in community schools is facilitated through phased and supported re-entry. FINANCIAL INFORMATION Leasing Arrangements: Since the early 1960s the rent remained a nominal $1.00 per year until 1979 when the City initiated a formal one-year lease agreement at the rate of $1,300 per month. The Association had applied for and received provincial designation as a Childrens Institution in approximately 1970 and was therefore receiving provincial funding for the residential service by this time. Since the expiry of this lease in April 1980, there has been no lease agreement between Charlton Hall and Family Services Centre and the City of Hamilton. The rent has remained unchanged despite numerous efforts by the City to increase the rate in the mid90s, which were successfully forestalled. The City has continued to assume responsibility for the capital and maintenance costs to the facility.

Subject: Declaration of Surplus Property: 52-56 Charlton Avenue West, Hamilton

Property Appraisal: On May 14, 2008 an appraisal report was prepared by the Citys Real Estate Section to estimate the fair market value of the subject property. It had been concluded that the estimated market value as of May 14, 2008 is $600,000. Capital Life Cycle: In June 2006, the City carried out a Facility Condition Assessment of 52-56 Charlton Avenue West, aided by a consulting firm specialized in Project & Facility Management to prepare a Capital Planning Report. Based on the finding of the Facility Condition Assessment Report an Order of Magnitude budget was developed which includes, construction costs, project overhead costs like permit fees, Architectural/Engineering Design fees, inspection and testing fees etc. The order of magnitude project budget is estimated at $900,000 based on the overall condition of the building and the intended functionality of a care & schooling facility. An alternative option would be to carry out only the very critical items that pertain to building code compliance, and health and safety items within the report, the estimated budget would be approximately $460,000. Recent upgrades: In the Fall of 2007 the City replaced the roof system, the fascia, soffits and eavestroughs at 5256 Charlton Avenue West at approximately $318,000. Annual Operating Budget: The Energy, Fleet and Facilities Management Division oversee the day-to-day maintenance of the building and grounds, which includes but not limited to the following; mechanical systems, electrical systems, plumbing, building envelope and grounds (ie, concrete repairs of walkways etc). The annual operating budget is in the range of $10,000 - $15,000. In closing, Energy, Fleet and Facilities Division are looking for support from your management team along with the support of the CityHousing Hamilton Board of Directors before a staff report goes forward to City Council. If you wish to discuss this further, please contact me at 905-546-2424 Ext. 7006 or 905-9715783. Sincerely,

____________________________________________ Rom D'Angelo, A.Sc.T., CFM Manager of Corporate Buildings and Technical Services Energy, Fleet and Facilities Division Public Works Department cc John Mater, Director of Energy, Fleet and Facilities Chris Phillips, Program Manager, Housing Development and Partnerships Deborah Filice, Manager of Operations Marla Adams, Manager, Tenant Support Services