FINANCE AND ADMINISTRATIVE COMMITTEE
	TO:	Mayor and Members of Council
	FROM:	Catherine M. Conrad, Town Solicitor
	PREPARED BY:	Brian Varner, Manager of Real Property
	DATE OF MEETING:	December 6, 2004
	SUBJECT:	Site Lease 8100 Warden Avenue Markham District Energy Inc.

RECOMMENDATION:

THAT the report dated December 6, 2004, entitled “Site Lease 8100 Warden Avenue, Markham District Energy Inc.” be received;

AND THAT Council authorize the Mayor and Clerk to execute a site lease with Markham District Energy Inc. for the land situated under the structure and related improvements on property located at 8100 Warden Avenue, including sufficient land to accommodate an expansion of the operation, together with a easement for egress and access over the existing driveway from Warden Avenue, in a form that is satisfactory to the Chief Administrative Officer and the Town Solicitor.

PURPOSE:

The purpose of this report is to request Councils permission to enter into a site lease with Markham District Energy Inc. (“MDEI”) for the land situated under the structure and related improvements on property located at 8100 Warden Avenue, including sufficient land to accommodate an expansion of the operation, together with a easement for egress and access over the existing driveway from Warden Avenue.

EXECUTIVE SUMMARY:

Markham District Energy Inc. does not own any real property in the Town of Markham. In order to be able to create valid easements, which form a vital part of its infrastructure, MDEI has obtained legal advice that it requires a parcel of land which benefits from the grant of various easements.

BACKGROUND:

Markham District Energy Inc. is an energy company wholly owned by Markham Energy Corporation (Town of Markham), a district energy system created to provide heating and air conditioning for the Markham Centre planning district. Its plant and equipment is situated on property owned by the Town of Markham, located at 8100 Warden Avenue.

The property, commonly referred to as the Markham Hydro or Powerstream building, is currently leased on a long term basis, save and except for the land occupied and utilized by MDEI.

DISCUSSION:

In order to be able to create valid easements, which form a vital part of its infrastructure, MDEI has obtained legal advice that it requires a parcel of land which benefits from the grant of various easements. MDEI prefers ownership of the lands but staff has determined that severance of a small parcel of land is neither highly practical nor feasible due to zoning constraints and necceciated site configuration. Alternatively, the Town can formalize the existence of the MDEI plant on the Town owned lands through a site lease. It is recommended that annual rent be based on market value of approximately two acres of land.

FINANCIAL CONSIDERATIONS:

The site area will be leased to MDEI from the Town at an annual rate that is consistent with typical market rent. Discussions with MDEI continue with respect to this and their available unencumbered cash flow, for rental payments. The anticipated annual rent is in the range of $50,000-$60,000 per year.

BUSINESS UNITS CONSULTED AND AFFECTED:

Development Services.

ATTACHMENTS:

Attachment “A”- Drawing – MDEI Plant Location

______________________________________ ___________________________________

Catherine M. Conrad Brian G. Varner

Town Solicitor Manager of Real Property

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