Deanne Pittman, Centretown News
The city and the owner of the building at 370 Catherine St. are locked in a dispute over the price of the lease.The City of Ottawa’s lease for 370 Catherine Street, a privately owned office building that serves as a municipal hub for delivering social services to local residents, has expired.
The city is currently negotiating a lease renewal with the building’s landlord Oxford Properties – with the two sides far apart on a fair price – and local residents are wary at the possibility of losing the central location for many important social-assistance programs.
The current annual cost to lease the building is $16 per square foot for the first, second and third floors, and $6.50 per square foot for the basement.
With parking and other operating costs, this comes to an annual cost of about $1.6 million. If the city agrees to the landlord’s new price, it would result in a more than $1-million difference over a five-year lease renewal.
The city recently received a third-party cost appraisal indicating that the building is worth $13.50 per square foot for the first three floors, and $5 per square foot for the basement.
Oxford Properties also provided a third-party appraisal, which indicated a value of $17 per square foot for three floors and $7 per square foot for the basement.
The city would like to renew the lease for five more years, as it is the central office for the delivery of the Ontario Works program, says Coun. Eli El-Chantiry, and vice-chair of the city’s finance and economic development committee. Ontario Works provides employment assistance and financial allowances for food, shelter, clothing and other household costs for people in need.
The city has leased 370 Catherine since November 2000 for use as its central office for social services. The building contains 59,653 square feet of office and basement space, and is located on Catherine Street near the Queensway. Ottawa residents served there are typically those with the most barriers to employment. Many are single parents and new Canadians, says a finance committee report from April 5.
These programs are delivered at four centres across Ottawa that are “geographically located to facilitate access to these key social supports for clients across the city . . . The renewal of the CSSC Central office lease will allow clients to continue to access these important services in their geographic area,” the report states.
Somerset Coun. Catherine McKenney says she agrees with the committee’s decision to support the lease renewal rather than relocating the social-services headquarters.
“Having access to these services downtown is important,” she says. “The building provides an essential service to vulnerable residents in this area and serves an important function in the community.”
“Staff are currently negotiating the lease renewal, which currently is within a range of $13.50, the City’s position, to $17.00 the landlord’s position, for the three floors,” El-Chantiry says via email.
Amidst these negotiations, an administrative error has made the situation even more complicated for the city.
Last June, members of the city’s community and social support branch advised municipal property managers that they wanted to renew the lease at 370 Catherine for a further five-year term, beginning in November 2016, says the finance committee’s report.
After receiving these instructions, the city prepared a letter indicating its interest in renewing the lease. This letter was then sent to the landlord in July.
“Due to an administrative error, the letter did not state that the renewal was subject to the approval of City Council or its delegated authority,” the report states. This has caused a delay in the negotiations to renew the lease.
Discussions with the landlord are currently ongoing.