The legal battle between the City of Orillia and Metro is not over just yet.
The municipality, which owns the mall at 70 Front St. N. in which the grocery store is a tenant, and Metro ended up at the Superior Court of Justice in Owen Sound in December over several legal issues related to the property and its eventual sale.
Justice J. Conlan issued a 30-page ruling on Dec. 20.
Essentially, Conlan had to rule on four key matters. He was tasked to determine the expiration date of the existing lease and to determine if the city was responsible to replace the roof and parking lot - two things Metro deemed necessary.
He was also asked by Metro to grant an injunction against the municipality that would stop the city from selling the ‘triangle land’ adjacent to the store on the northern tip of the property they own, amid fears that such a sale would cause the grocery store hardship around receiving stock at the rear of the store. That injunction was denied.
Conlan also ruled the city was not responsible for roof repairs and determined the city fulfilled its obligation when it made repairs to the parking lot.
On the term of the lease, Conlan sided with Metro and determined the lease will expire Feb. 28, 2039 - not Feb. 28, 2029 as the city had interpreted. The decision extends the current lease by 10 years.
The city is appealing the decision about the lease.
According to a report from city staff, members of the staff Waterfront Development Team and members of the Waterfront Working Group carefully reviewed the decision in collaboration with the city’s solicitor, Robert Wood of Borden Ladner Gervais (BLG).
“After much discussion with the waterfront working group and the city’s solicitor, staff has pursued an appeal of the lease term decision for three key reasons,” said Laura Thompson, the city’s manager of real estate and commercial development.
“We believe an error in law was made, a 2039 date has the potential to limit redevelopment of the site and the 2039 date has the potential to impact the purchase price,” said Thompson.
On Jan. 28, Metro served notice that they are cross-appealing in response to the city’s appeal. Metro is appealing the decision as it relates to the roof and triangle land matters.
According to the staff report, the earliest possible hearing date in Oshawa (the jurisdiction for local judicial review cases) would be late June or early July.
The city requested to transfer the judicial review to Toronto, where there are more court dates scheduled for this type of hearing.
The application to transfer the application has been approved and the hearing has been scheduled for May 26, 2020, in Toronto.
“We currently estimate the cost of the appeal and the defence of the cross appeal may incur legal costs of approximately $30,000,” Thompson told city councillors.
“The waterfront working group believes this direction is consistent with council’s direction in jan 2019 to proceed with final determination of the Metro lease term date through arbitration and/or civil litigation as required.”
The staff report noted the city has not yet exceeded the $390,000 in consulting/legal fees that council had previously approved for this project.
“While the direct impact that a successful appeal could have on the overall purchase price is not yet known, it is estimated to far exceed the costs of the appeal,” noted the staff report.
The municipality became the owner of the Front Street Plaza at 70 Front St., home to Metro, in January of 2016.
The primary reason behind the purchase was to bulldoze a portion of the mall (not Metro) to punch Coldwater Road through there and to open up a “viewscape” to the lake.
“Then, around the council table, we started taking a harder look at the property,” said Orillia Mayor Steve Clarke, noting the former Ossawippi lands and other city-owned land in the area, in addition to the mall property amounted to an almost 10-acre site.
He called this site “a really key piece of property” that, if developed, could remedy “the disconnect” between the waterfront and the downtown.
Ultimately, the city worked to ‘de-risk’ the property and, eventually, created a request for proposals that would lay out a vision for the property that aligned with city council’s goals.
The city has now pre-qualified three companies that will present their vision for the property - which would include purchasing the site from the city - later this year.
“The four items were adjudicated just to help give us and Metro clarity as to where we stood, so that we’re moving ahead solidly with the RFP,” said the mayor. “It doesn’t materially affect the RFP process.”
