Draft Recommendations - Facility Leasing
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The following excerpt is from the Executive Summary of the Review of Services Report of Draft Recommendations. Detailed findings on this service are available in document downloads at right.
The City currently leases some surplus assets to the private, public and not-for-profit sector. Leasing to the not-for-profit sector meets the accessibility public policy objective in that it provides affordable space to select agencies. The current not-for-profit organizations benefiting from below market City leases, provided on an ad hoc basis, are not put through the same scrutiny, evaluation process or limitations on the amount of support provided as cash grants provided by the City through their Healthy Community Grant program. Leasing at below market rates which is the current practice for not-for-profit organizations are in fact, de facto grants and should be treated as such.
There are other ways for the City to provide support to not-for-profit organizations that should be evaluated against leasing to determine the most effective, fair and equitable approach. A cost/benefit analysis for evaluating opportunities to support not-for-profit organizations should compare the in-kind grant benefit against other forms of support that may be available.
With the exception of the airport properties, which cannot be sold as part of the terms of the transfer from the Federal government, there is no evidence to validate that leasing surplus City owned properties to the private and to other public sector organizations meets any Council defined public policy objective.
In general, exiting the leasing business is recommended. A number of steps should however be undertaken which would include adopting criteria to determine which buildings and properties should be identified as surplus and sold. For those assets that are not surplus (and those at the airport) or for those assets that do not attract a buyer, the City should determine what the market rent would be to lease the space; the marketability of the space; the costs/benefits of demolition and the costs/ benefits of leaving the space vacant to determine the most appropriate action.
