Item - 2024.GG14.18

The Executive Director, Corporate Real Estate Management, and Chief Purchasing Officer recommend that:  

1. City Council, in accordance with Section 71-11.1C of the City of Toronto Municipal Code Chapter 71 (Financial Control By-law), grant authority to amend Purchase Order Number 6034062 issued to Adamson Associates Architects by an additional amount of $40,000, net of all taxes and charges, revising the current purchase order value from $6,951,199 to $6,991,199 net of all taxes and charges ($7,114,244 net of Harmonized Sales Tax recoveries), for ongoing contract administration services and expertise for the duration of the St. Lawrence Market North Redevelopment project.

The purpose of this report is to provide an update on the status of the City of Toronto's St. Lawrence Market North Redevelopment project (the “Project”) and advise City Council, pursuant to Chapter 195 of the Toronto Municipal Code (Purchasing By-law, Section 195-7.4), of a non-competitive contract with the General Contractor, The Buttcon Limited / The Atlas Joint Venture (“BA-JV”), for the non-exclusive supply of construction services both already completed and still required to attain substantial completion, occupancy, and operational readiness of the St. Lawrence Market North Redevelopment, for a total value of $9,335,692 net of all applicable taxes and charges ($9,500,000 net of Harmonized Sales Tax Recoveries). These additional costs were primarily driven by unforeseen cost escalations from the COVID-19 pandemic, client-driven changes including the incorporation of updated workplace modernization standards, evolving information and technology requirements around the delivery of court services, security and police radio system infrastructure, and errors and omissions from the Prime Architect.

In consultation with the Purchasing and Materials Management Division (“PMMD”), the non-competitive contract was issued on the basis of emergency in order to meet immediate legislated payment requirements and avoid further Project delays that would have resulted in additional Project costs. Reporting back to City Council is required in accordance with Municipal Code Chapter 195, Purchasing, Article 7, Section 195-7.4(B) where a non-competitive contract over $500,000 is entered into on an emergency basis.

This report also requests that City Council grant authority to amend Purchase Order Number 6034062 issued to Adamson Associates Architects (“AAA”) for an additional amount of $40,000 net of all taxes and charges, revising the current purchase order value from $6,951,199 to $6,991,199 net of all taxes and charges ($7,114,244, net of Harmonized Sales Tax recoveries), for ongoing contract administration services and expertise. The requested amendment will restore sufficient value to the contract to ensure that contract administration services are available for the duration of the Project.

Approval of the purchase order amendment for continued contract administration services will allow construction to continue, with the Project expected to be completed and the facility ready for tenant fit-up in September 2024. 

The total non-competitive contract identified in this report is $9,335,692 net of applicable taxes and charges ($9,500,000 net of Harmonized Sales Tax recoveries).

Approval is also being sought for the amendment of Adamson Associates Architects' Purchase Order Number 6034062 for $40,000 net of all taxes and charges, requiring an amendment to the current purchase order value from $6,951,199 to $6,991,199 net of all taxes and charges ($7,114,244, net of Harmonized Sales Tax recoveries), for ongoing contract administration services and expertise for the duration of the Project. The amendment value will be funded from the Corporate Real Estate Management Division’s Cost Centre CCA193-01 in 2024.

Total Project Budget

The current approved total project budget for the St. Lawrence Market North Redevelopment project is $118,821,000.

Due to the factors that are driving the need for the non-competitive contract and the contract amendment noted above, the revised total forecasted Project cost is $128,021,000, or $9,200,000 over the current approved total Project budget. Table 1 below details the updated cost estimates compared to the current budget, and identifies the incremental funding required to complete the Project.

Table 1: St. Lawrence Market North Redevelopment - Updated Project Cost (net of Harmonized Sales Tax)

To address the Project cost increase of $9,200,000, a budget adjustment will be brought to City Council through the Capital Variance Report for the Four Months Ended April 30, 2024 that will be before Council at the same time as this staff report at the July 24 to 26, 2024 meeting. The budget adjustment will increase the project budget for the St. Lawrence Market North Redevelopment project by $9,200,000 reallocating debt funding from existing projects within the Corporate Real Estate Management and Chief Information Security Office Divisions’ 2024-2033 Capital Plans.

Funding Sources

The total revised funding sources for the St. Lawrence Market North Redevelopment project, after the pending budget adjustment, are outlined in Table 2 below.

Table 2: St. Lawrence Market North Redevelopment Funding Sources - After Budget Adjustment (net of Harmonized Sales Tax)

*Includes $9,200,000 in additional debt funding to be added pending the Council approval of the Capital Variance Report for the Four Months Ended April 30, 2024.

The Chief Financial Officer and Treasurer has reviewed this report and agrees with the financial impact information.