Item - 2025.GG25.10

The General Government Committee:

1. In accordance with Section 71-11.1C of the City of Toronto Municipal Code Chapter 71 (Financial Control By-law), authorized the Executive Director, Corporate Real Estate Management to amend the Purchase Order Number 6055480 with Rossclair Contractors Inc., for General Contracting Services for the renovations of the building located at 2299 Dundas Street West, in the amount of $2,500,000 net of all taxes ($2,544,000 net of Harmonized Sales Tax recoveries) increasing the current Purchase Order value from $15,356,111 net of all taxes ($15,626,379 net of Harmonized Sales Tax recoveries) to $17,856,111 net of all taxes ($18,170,379 net of Harmonized Sales Tax recoveries).

The purpose of this report is to seek authority to amend the value of Purchase Order Number 6055480 issued to Rossclair Contractors Inc., for general contracting services at the City-owned building located at 2299 Dundas Street West (the “Property”). The total amendment being requested is $2,500,000 net of all applicable taxes and charges ($2,544,000 net of Harmonized Sales Tax recoveries), increasing the current Purchase Order value from $15,356,111 net of all applicable taxes and charges ($15,626,379 net of Harmonized Sales Tax recoveries) to $17,856,111 net of all applicable taxes and charges ($18,170,379 net of Harmonized Sales Tax recoveries).

In September 2018, the Property was acquired by the City as one of the transition sites to support the relocation of clients from the Seaton House Annex Program, as part of the George Street Revitalization project. The City is currently converting the Property into a City-operated men's shelter with capacity for approximately 80 beds.

Following a planning process delay of over two years (end of 2019 to end of 2021) due to the onset of the COVID-19 pandemic and its disruption to the Toronto Local Appeal Body hearing schedule, renovations of the Property commenced in April 2024 with Rossclair Contractors Inc. serving as the general contractor.

Site due diligence and environmental assessments were conducted as part of standard practice during the acquisition and early design development phases of the project. Provisions to address findings from these preliminary assessments were included in the original scope of work. However, the full extent of the site’s impaired conditions became apparent once full demolition and underground work on the Property had commenced. These issues were beyond what could have been detected through standard due diligence activities in earlier phases. Three major unforeseen site conditions were discovered between May and August of 2025. In addition to these significant issues, several other unanticipated conditions also emerged, although relatively minor in nature. For example, there was insufficient space to expand the existing hydro duct bank, which houses electrical and communications conduits underground, to support the expanded utility demand. As a result, additional conduits had to be routed through alternative pathways.

The major unforeseen site conditions include:

1. Unexpectedly high groundwater table in the area of the Property that led to infiltration of groundwater in the basement during below grade work;

2. A substantial amount of hazardous materials found throughout the Property that necessitated legislatively required abatement prior to work continuation; and

3. Unanticipated severity of building deterioration during the two-year planning process delay, when the Property remained vacant, required additional rehabilitation work.

Staff have taken a proactive management approach to address and mitigate the impacts of various unforeseen site conditions. However, proactive management alone cannot fully address the significant impact of the site conditions uncovered during construction.

This amendment will cover the scope of additional work arising from the unexpected site conditions and enable the contractor to proceed without delay. Occupancy of the Property is anticipated in the second quarter of 2026. Timely completion is critical to support the transition of clients from the Seaton House Annex Program and advance the George Street Revitalization project.