Planning context for Marine Museum site

Public Works and Government Services Canada (PWGSC) has declared the Marine Museum of the Great Lakes (Marine Museum) building, Dry Dock and Union Street Jetties (collectively, the Site) to be surplus to its needs and is offering the property for sale on the open market. The City of Kingston has prepared a document entitled "Planning Context for Marine Museum Site" to assist proponents that may be interested in purchasing and redeveloping the property.  This document includes: a description of the property; neighbourhood and historical contexts; a description of Marine Museum functions; a summary of the City's key strategic documents; a summary of relevant Official Plan policies, Zoning Bylaw regulations and historical designations; and, information with respect to a proposed amendment to the Brownfield Community Improvement Plan to include the Marine Museum Site in a new or expanded CIP Project Area.

Interested proponents are encouraged to contact the City for further details to discuss the proposed CIP Project Area and their plans for the redevelopment of the subject property.  Key City contacts are included in the Planning Context document.


What is the property being sold by Public Works Government Services Canada?

The land and water areas associated with the site comprise approximately 1.5 hectares (3.8 acres).  The site includes the original 1892 limestone dry dock and a 1929 concrete extension, as well as the east and west jetties and associated water lot.

The site is a significant heritage landmark and is associated with a record of First Nations activity in the early 1800s. The site is owned by Public Works and Government Services Canada (PWGSC).  

The Marine Museum of the Great Lakes is located at 55 Ontario Street. It is not for profit organization. The Museum boasts the largest single collection of Great Lakes historic material in Canada.

What is the history of the Kingston Graving Dock federal site?

The Marine Museum began on federal property and was moved by the federal government onto its current site. The building at the time was in extremely poor condition and the municipality and federal government were at odds with maintenance required for the building to meet property standards.

From 1977 to 2007, the City of Kingston leased the property upon which the Marine Museum sits from the Government of Canada and sub-let the property to the Marine Museum of the Great Lakes at no cost. The property had been used for industrial ship building and painting by the federal government, but by 1977 was no longer used for commercial uses.

That lease was in place for the 30-year period that expired in 2007. At that time the City could not continue to lease the site due to there being no value added by the City as an intermediary between the museum and the PWGSC and due to concerns over the poor condition of the dry dock and wharfs. PWGSC indicated that it would approach the City for the divestiture once health and safety issues were addressed while the lease with the Marine Museum would be extended for 10 years.

A 10-year lease was not provided to the Marine Museum.

PWGSC indicated it could only access emergency funding to address the existing health and safety issues of the wharves if the City did not lease the property, therefore, the lease was allowed to expire in November of 2007.

The Marine Museum became a tenant of the federal government.

After the lease expired, PWGSC made a number of investments to repair the dry dock and to bring the building to meet health and safety requirements. There have been many internal improvements to the building, removal of hazardous materials and upgrading of the HVAC and building systems.

The wharfs have not been maintained or rehabilitated and are fenced as there are sinkholes and failures along the waterfront that make them unsafe to access. They allow erosion of potentially contaminated soil and fill materials to the lake.

In April 2014, PWGSC declared the Kingston dry dock and complex to be surplus and offered the property to the City for the sum of $1 on an "as-is" condition. 

Studies conducted on the site assessed the structural condition of the original dry dock, the dry dock extension and the adjacent wharves.   This included engineering investigations and technical design to evaluate and enhance the safety of the infrastructure as well as sub-surface investigations to determine the general soil, bedrock and groundwater elevations to provide guidelines for geotechnical design aspects of the required works.  These studies identified the need for considerable investment in the property to address the deteriorating infrastructure and to enhance public health and safety throughout this valuable cultural heritage resource. 

What financial assistance has the City provided to the Marine Museum of the Great Lakes?

The City of Kingston has provided annual funding of $65,000 to the Marine Museum for a number of years.  In addition to the favourable sub-lease terms and annual funding, the City of Kingston also made the following investments in support of the Marine Museum and the site in the period leading up to the termination of the lease in 2007:

  • repairs to the physical plant and ongoing building maintenance costs;
  • waiving an outstanding 18 year-old loan to the Marine Museum of $65,000; 
  • additional funding allotment of $60,000 for the museum towards their 2007 budget;
  • capital expenditures including $110,000 for renovations to the building and $175,000 for permanent bollards and fendering for the Alexander Henry; and
  • engineering studies in the amount of $195,000 to enhance public safety around the site

The City of Kingston fund to support heritage and museums was introduced in 2014 with the Marine Museum being awarded $65,000 for operating funding.

Since 2007, Public Works and Government Services Canada has maintained the physical plant of the building and undertaken maintenance for the Marine Museum.

The Marine Museum does not pay rent to the federal government.

Previous reports to council and the recently approved Kingston Culture Plan recognize that the current levels of funding to the Marine Museum are not sufficient to maintain regular operations.  The current level of funding does not adequately address the long- term costs associated with the maintenance of the collections and the building.

In spite of municipal and federal investments in recent years, capital improvements will still need to be forecast to achieve the vision that has been articulated for the Marine Museum, including plans for the collection and the on-going maintenance of the Alexander Henry, the largest artefact in the collection.

The Marine Museum site is not in the City's ten-year capital plan and any costs to acquire, maintain and undertake a process to sell the property to a developer would require additional municipal funds that are not budgeted. City council has been consistent in indicating— since the 1970',s to both the Marine Museum and federal government – that they will not remediate the wharf structures as it is not a municipal priority and that the federal government should be responsible to make the site safe and to the standards of a national historic site.

What are the ongoing costs for the owner of the federal site?

The property still has significant environmental, structural, maintenance and heritage issues that need to be addressed.

A very preliminary level costing has been prepared by a consultant for the City of Kingston to assess the long-term costs of owning the site. These costs include studies necessary for regulators like the Ministry of Environment and Department of Fisheries and Oceans approve the ongoing uses of the property or remediation that may need to take place. These are only rough estimates of costs as further testing and due diligence would be required to complete the work necessary to stabilize the wharfs. 

Category: Estimate:
1.0 Design & Regulatory $2.40M
2.0 Construction Work  
2.11 Site Remediation/Public Safety Work $0.50M
2.12 Environmental Remediation Work $4.10M
2.20 East & West Wharfs $5.40M
2.30 Dry Dock $1.40M
2.40 Marine Museum/Dry Dock Pump House $0.75M
3.0 Operating Costs $0.20M
4.0 Contingency $4.40M
Total: $19.10M
6.0 Option with Maritime Heritage Centre and Tour Boat Docking Facility $3.00M
Revised Total: $22.10M

Any enhancements to the site to improve public amenities would cost considerably more and there would have to be additional analysis regarding any revenue potential as there have not been business cases developed that could recover the costs of this infrastructure.

There are significant financial implications associated with the Site. At this time the environmental risks and costs to remediate and repair the Marine Museum of the Great Lakes Building, Dry Dock and Union Street Jetty outweigh the public benefits for the City of Kingston to take on the ownership of the site. There are currently no funds budgeted in the 10-year capital budget to repair the infrastructure as the City does not own the property. 

Why is this property different than other properties sold by the City under its Brownfield program?

The property is not currently within a Project Area eligible for brownfield funding. Staff and council have been concerned about the precedent of paying for remediation of federal properties out of municipal taxes. The federal government has many properties they are divesting in Kingston and paying for remediation through tax incremental financing would defer municipal taxes for many years and is a shifting of responsibility from the federal government to municipal taxpayers.

In most brownfield applications, the City does not take ownership of the lands but will provide tax incremental financing if the properties are in an approved Project Area and redevelopment creates an increase in value and property taxes paid to the City. The owner must apply to the city with an application to remediate the property. The tax incremental funding is only rebated after the first tax bill is paid by the owner of the property and the City does not take on the responsibility or liability of ensuring a clean- up takes place. The owner has to pay all of the costs for clean up to the standards of the Ministry of Environment and Climate Change and any applicable federal regulations. The project must be completed and remediation costs are rebated from the owner's tax payments.

The City's brownfield program also allows the City to transfer ownership of properties where there are tax arrears. The City has some protection from liability through provincial regulations and does not assume the legacy issues related to remediation.

The tax sale process allows the City to undertake a process to sell the lands to a developer so that the land can be transferred without the City having to take on ongoing maintenance and care of the property.

If there has been no developer found for the lands, the City does not take ownership of the lands. The federal government is not prepared to offer these protections from liability to the City and is selling the land in its current condition.

The federal government will also not allow the time for the City to undertake a process similar to the brownfields program which would test the market to see if a developer would take on liabilities related to the site prior to the City taking ownership of the lands. 

The City of Kingston has determined that without these protections in place, purchasing the land is an unacceptable risk to municipal taxpayers.

What is happening next in the federal sale process?

Public Works and Government Services Canada has indicated they have not determined the process for sale but will be proceeding to sell the property on the open market.

City council has voted against acquiring the site as doing so would transfer significant financial risk to the taxpayers of Kingston.

City staff has been instructed to research and prepare options to assist the museum to remain at its current location or other aspects to help the museum. This report will be provided to council on January 27th.

The Marine Museum does not pay rent for the building or lands and has a lease that provides for 120-days' notice to vacate. These terms have been in place since 2014.

What are the risks of the municipality being required to undertake work on the property by Federal or Provincial Ministries?

The property is currently owned by the Federal Government and therefore Ontario's Ministry of the Environment and Climate Change (MOECC) does not have authority to require clean-up or assessment of environmental conditions.

Once ownership of the property moves to either a private developer, a not for profit organization or the municipality the Ontario Ministry of the Environment and Climate Change (MOECC) becomes the environmental regulator and has the authority to order work that might be needed.

The most common form of requirement from the MOECC involves clean-up of property when it is changed from less sensitive to more sensitive land uses (i.e. from industrial to residential).  Given the industrial history of the property it is likely that significant expense would be required to achieve soil and groundwater conditions suitable for a change to residential or parkland use.

Because of the property's adjacency to Lake Ontario, Environment Canada and the Department of Fisheries and Oceans also has the ability to regulate to prevent or remediate environmental damage to the lake from the property regardless of who is in ownership. Regulatory and civil action against a property owner could be taken if adjacent lands or waterways could be damaged.

Recent cases such as recent decision by the Ontario Court of Appeal in Kawartha Lakes v. Ontario as well as the ongoing risk of private prosecution under Federal law could draw any owner in the chain of title into a dispute regarding clean-up.

A diligent property owner takes steps to assess - and repair when necessary - the condition of lands before such actions or complaints might occur.