City lease amendment lets in-house contracts

Summary#

Montréal city council unanimously set the city’s position on an amendment to the existing 23-year lease with the Société d’habitation et de développement de Montréal (SHDM) for 303, rue Notre-Dame Est, which houses the édifice Chaussegros-de-Léry. The amendment would let the City award contracts for renovation work itself and then seek reimbursement from the SHDM; the agglomeration council makes the final decision at a later meeting.

  • The amendment changes the lease’s money-allocation clause. The City may award the work contracts, pay the contractors and invoice the SHDM for those costs.
  • The allocation is paid out progressively, on detailed invoices from the professionals or contractors who did the work.
  • Any cost above the $22.5 million allocation is entirely the City’s responsibility.
  • The City also authorized a $22.5 million revenue-and-expense budget for the allocation over the lease’s 23-year term.

What it means for you#

  • City administration: The Service de la gestion et de la planification des immeubles may use the City’s existing framework agreements to contract for the renovation work. This is permission, not a requirement that the City award every contract itself.
  • Residents and taxpayers: The decision does not directly change taxes, fees, or public services. The City would be responsible for renovation costs above the allocation.
  • SHDM: If the City awards the contracts, it would receive invoices from the City for reimbursement. The amended clause also allows the landlord to award contracts and pay their costs after receiving an invoice approved by the City.

Money#

The decision authorizes a $22.5 million budget for revenue and expenses over 23 years; it does not provide a separate estimate of the City’s net cost.

  • The decision summary lists revenue of $22.5 million before taxes and expenses of $22.5 million, net of tax rebates.
  • The work is reimbursable by the SHDM, but any costs above the allocation are entirely the City’s responsibility.
  • City staff say the change would let the City use its existing framework agreements, which they describe as offering competitive prices.

What is unclear#

  • The materials do not describe the renovation work, its schedule, or how many contracts will be awarded.
  • They do not say whether the City will award all the contracts or whether the SHDM may award some.
  • The full terms of the lease amendment are not included in the materials, beyond the change to the allocation clause.

Case for#

  • The change could give the City more flexibility to arrange the work.
  • City staff say using the City’s existing framework agreements could provide access to competitive prices.
  • Reimbursement against detailed invoices links the allocation to work that has been carried out.

Case against#

  • The City bears the full cost of any work that exceeds the $22.5 million allocation.
  • The materials do not give a renovation cost estimate or explain how the City would manage the risk of cost overruns.