City responds to Auditor General Audit of Pier 7 lease agreement

HAMILTON, ON – The City of Hamilton is committed to addressing the findings and recommendations outlined in the Office of the Auditor General’s (OAG) Corporate Real Estate: Audit of Lease of Space at Pier 7 located at 121 Haida Drive, currently occupied by Williams Fresh Café.

“This audit report is a valuable tool that will help strengthen the City’s procedures and policies related to lease agreements,” said Arvin Prasad, General Manager, Planning and Economic Development. “The City welcomes the Auditor General’s conclusion that the rent negotiated with the tenant was reasonable, however we are committed to take action on the Auditor General’s recommendations and making the necessary improvements to increase transparency and accountability.”

To address the recommendations, the City’s Corporate Real Estate Office (CREO) has initiated efforts with Procurement staff to ensure there is clarity related to transactions where staff do not have delegated authority. CREO staff will also assess criteria for when Council is to be informed and approval required in advance, as part of ongoing work related to the development of broader Centralized Lease Administration procedures. 

CREO staff continue to follow public sector best practice and Appraisal Institute of Canada requirements for the valuation of rents by leveraging its database of comparable lease deals and financial analysis to make sure the City is securing the most competitive rents and bringing the most value for residents. 

“The City is committed to delivering more accountable and transparent policies and procedures related to lease agreements for City-owned properties,” said Ray Kessler, Chief Corporate Real Estate Officer. “We thank the Auditor General for their comprehensive efforts to continue to identify improvements, and the City’s Corporate Real Estate Team for their dedication to continued improvement and service excellence.”

Quick Facts:

• In the years leading up to 2024, Hamilton Waterfront Trust (HWT) was operating a restaurant as a franchisee of Williams Fresh Café. In late Fall 2023 HWT decided they would not renew their franchise agreement and formally notified the franchisor on January 5, 2024.
• CREO staff began negotiating terms and conditions of a new lease that would see the City leasing the restaurant space directly to the Williams Fresh Café corporate entity for them to continue to operate the restaurant. 
• At the May 8, 2024 Council meeting, authorization for the lease arrangement was given, with Councillors voting in favour of the staff recommendations. 
• The negotiated agreement, based on fair market value, also allowed for the uninterrupted use and enjoyment of the restaurant and associated public amenities in the West Harbour.