City gets big discount to buy federal land in Little Italy

The city's plan to buy a prime tract of Little Italy property is nearly a done deal after a council committee unanimously approved the purchase lateTuesdayat a price that's a fraction of the land's estimated commercial value.

The $2.87-million acquisition could be a game-changer for the inner-city neighbourhood, which is starved for green space, since the property is largely earmarked for a large new park and a recreation centre expansion.

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The2.55 hectares of land at 1010 Somerset St. is bounded by Somerset Street W. to the north, the Trillium Line tracks to the west, Oak Street to the south and Plant Recreation Centre and the adjacent Plouffe Park to the east.

It's part of a former federal warehouse complex, originally built in the 1940s as a munitionsandequipment depot. The warehouse was demolished in 2015 and the federal government declared the land surplus.

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The southern part of the warehouse land a tract known as 933 Gladstone Ave. wassold in 2019 to Ottawa Community Housing, the city's social housing agency, for $7 million, as the planned site of a mixed-income communitydubbed Gladstone Village.

It will combine affordable and subsidized housing with market-value housing.

Now, PublicServices and Procurement Canada (PSPC) is selling the city the adjacent northern portion at a cut-rate price so it can be integrated into the Gladstone Village concept.

How city got a $22M discount

PSPC originally set the purchase price at $25 million, based on market appraisals and assuming the land, near a future LRT Phase 2 station,was going to be used only for a straight-ahead residential development.

But the federal government offers discounts if the land's future usealigns with its policy priorities.

In this case, the governmentended up applying sevenprice adjustments. They covered everything from the fact that most of the land would go to public uses including a one-hectare public park and a community centre expansion to the environmentally sustainable development plan.

The discounted price also credited the city's plan to address reconciliation by involving the Algonquins of Ontario, who will help provide Indigenous employment and economic development opportunities, as well as space forAlgonquin artists.

As well, the city saved $2 million by buying the land "as is," meaning the municipality is responsible for any future soil clean-up.

All in all, PSPC knocked $14 million off the price, leaving the city with a price tag of $11 million.

That left the city needing to convince Canada Mortgage and Housing Corp. that the land qualified for future discounts under a program that encourages usingsurplus federal property for affordable housing.

The land itself isn't earmarked for housing, but the city convinced CMHC that it would be used to support the affordable housing in Gladstone Village.

In the end, CMHC agreed, but the city had to commit toalso build 300 residential units at 1010 Somerset St. by 2038, half of them affordable. The combination was enough to shaveanother $8.25 million off the purchase price, in the form of a "forgivable mortgage" from CMHC.

Taking various taxes and fees into account, that leaves the city $2.87 million to pay. It will use $1.82 million from the city-wide park fund and $1 million from the Somerset ward park fund, with the rest from the municipality's real estate office budget.

Full council and the federal Treasury Board must still approve the sale.