City plans to sell old main library for $20M in no-bid contract
Sole-source contract would see the building at Laurier and Metcalfe sold to its next-door neighbour
The City of Ottawa wants to sell its old downtown library branch for $20 million to the company that leases the office tower next door.
The city is selling the land in part to help fund construction for the new central library, which is set to be built near Lebreton Flats and open in 2024 at a cost of $174.8 million.
In a report going to council's finance and economic development committee next week, city staff recommend selling the building to Slate Properties, which owns the attached office building.
Complicated deal
Selling the library is complicated by a collection of existing agreements between the city, the Ottawa Public Library Board and Slate Properties.
Slate has a lease for the attached Sir Richard Scott Building that runs to 2034, as well as air rights over the three-storey library building and control over the parking garage under the building.
In the report going to council, city staff wrote that it made sense for Slate to buy the library.
"Slate Properties' knowledge of the building, together with the associated value uplift for the acquisition of all the property interests, made them the most logical purchaser," the report reads.
Ordinarily, properties being sold by the city go on the open market, but the report said it would have been difficult in this case.
"Exposing the 120 Metcalfe Street and 191 Laurier Avenue West property to the open market carries risks to the city's ability to attract a third-party purchaser willing to acquire only partial interests in the property until 2034 and within the timeframe desired by the city and Ottawa Public Library," the report states.
The $20-million price tag is in line with the appraisal the city received.
If the sale goes through, the city will lose the $486,000 a year it is currently getting from Slate for the air rights and the parking garage, but it also won't have to pay the $399,600 it currently pays to Slate for office space in the fourth and fifth floor of the building.
The proposed sale would see the city get $10 million this year and another $10 million when the library actually moves out, which is expected in 2024 — though they would have until 2026 in case of construction delays.
Cost, space split agreed upon
The new library is being built by the city and Library and Archives Canada. The update going to council also spells out a new governance arrangement for how the project will be built and operated.
City staff have worked out cost splits and a governance arrangement with the archive. The city would be responsible for 61 per cent of the costs and the archive on the hook for 39 per cent, which would correspond to how space in the new facility will be allocated.
The city will be solely responsible for a proposed 200-space underground parking garage that comes with an $18.1-million price tag, but city staff say it will be funded through parking revenues.
Later this year, a design competition will see a winning bidder picked from among a shortlist of five design teams.