Ontario Construction News staff writer
Hamilton’s Office of the Auditor General (OAG) says the city’s lease of commercial space at Pier 7 was reasonable compared with market conditions, but the audit identified gaps in transparency, administration and council oversight.
The report reviewed the Corporate Real Estate Division’s lease at 121 Haida Drive, a waterfront property now occupied by Williams Fresh Café. Auditor General Charles Brown engaged a third-party expert to benchmark the lease against market standards. The review found that the rent and conditions were fair “in the circumstances.”
Still, the OAG cautioned that the city’s approach to negotiating the lease—particularly its reliance on a single-source procurement process—should have been disclosed to council before talks began. “The use of single-source procurement in this case should have been proactively presented for council’s decision at the outset,” the audit stated. “Clearer processes and earlier transparency are necessary for high-profile leases of this nature.”
In a statement, the City of Hamilton said it accepted the Auditor General’s findings and has already begun making changes. “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 of 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.”
The City said the Corporate Real Estate Office (CREO), working with procurement staff, is clarifying procedures for transactions where staff do not have delegated authority. Officials are also reviewing criteria to determine when council must be informed and approvals secured in advance, as part of broader centralized lease administration reforms. “The City is committed to delivering more accountable and transparent policies and procedures related to lease agreements for City-owned properties,” said Ray Kessler, Hamilton’s 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.”
The city noted that CREO continues to follow public sector best practices and the Appraisal Institute of Canada’s standards to ensure rents are valued competitively and provide value for residents.
According to the city, the lease arrangement followed changes at the site in late 2023. The Hamilton Waterfront Trust, which had been operating the restaurant as a Williams Fresh Café franchisee, chose not to renew its agreement and formally notified the franchisor on January 5, 2024. CREO staff negotiated directly with Williams Fresh Café corporate to lease the space. Council approved the agreement on May 8, 2024, voting in favour of staff recommendations. The city says the new lease, negotiated at fair market value, ensured uninterrupted operation of the café and continued public access to waterfront amenities.
The Pier 7 audit is part of the Auditor General’s continuing review of Hamilton’s corporate real estate activities. While the report concluded that the city secured reasonable terms in this instance, Brown stressed that stronger oversight and clearer reporting to council will be vital in future transactions. “Going forward, the City needs to demonstrate that these decisions are made openly and with proper council authority,” the audit concluded.
