i would like your opinion on the penny lane towers
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Work to begin on $1B Penny Lane towers
to add two million sq. ft. of needed office space
Mario ToneguzziCalgary Herald Saturday, March 24, 2007
The developer hasn't decided when Cowboys nightclub will have to close. A billion-dollar project -- consisting of two commercial towers totalling two million square feet -- is going ahead on the site of the current Penny Lane Mall, after a new development permit and demolition permit were submitted to the city on Friday. Owners of the project hope to begin demolition work, pending city approval, at the downtown site in April or May with construction to begin in December. Occupancy for the first phase of the project is slated for 2011. The east tower will be 48 storeys and the west tower 37 storeys. Both towers will also include two mechanical floors. Wade Gibbs, of Gibbs Gage Architects which designed the huge project, said the look of the towers is a "geological metaphor for the Rocky Mountains." "It is important that the building reflect the unique condition that is Calgary and the influence that the Rocky Mountains has on our city," he said.
The Penny Lane Development ownership group consists of Alberta Investment Management, Matco Investments Ltd. and SITQ, a subsidiary of Caisse de depot et placement du Quebec. "I am certain that this project will become a landmark property that the citizens and business community of Calgary will embrace," said John Smith, vice-president of 20 VIC Management Inc., which is acting as the owners' representative on the development. The development team also includes Hines, a privately owned international real estate firm, as development manager, and the internationally recognized architectural firms Pickard Chilton and Kendall Heaton Architects. Gibbs said a development permit for the project was originally approved in 2002 and then renewed in 2005. In the past four months the project has been redesigned.The site is located in the block at 8th and 9th avenues S.W., between 4th and 5th streets. Christopher Ridabock, president of JJ Barnicke Calgary Inc., called news the project was proceeding "absolutely terrific," saying it shows confidence in the future of the Calgary and provincial economies. "It's going to be a very, very attractive building with tons of views of the mountains, and it's going to be a great building for the major oil and gas tenants in downtown," said Ridabock.
Calgary's downtown office market is the tightest in North America, sitting at about a 0.5 per cent vacancy rate at the end of 2006. "All of our projections that we have done, that basically takes us out to 2012, 2013, shows that the vacancy rate is not going to, under any set of circumstances, move ahead more than to about a six per cent vacancy. And a six per cent vacancy is considered to be kind of a balance point of the marketplace where there's a great balance between the tenant and the landlord," said Ridabock, adding that the Penny Lane ownership group is also showing confidence in the city's construction industry by proceeding with the project. According to CB Richard Ellis, in the downtown, 11 office developments are either underway or pending commencement, and seven of them are already 100 per cent pre-leased. These developments will add more than 5.5 million square feet to the downtown market by 2011. The existing downtown inventory is about 32 million square feet.
Four of the 11 projects are expected to be completed this year, representing just over 1.5 million square feet. The Penny Lane east tower will consist of just more than one million square feet, while the west tower will have 813,000 square feet. There will also be 53,000 square feet for retail/restaurant use at ground-floor level and on a Plus-15. Underground parking will total 1,149 stalls. Gibbs said the intent is for the first phase of the development -- east tower, underground parking, ground floor and Plus-15 -- to be completed by January 2011. It will also include an indoor winter garden and outdoor park. The second phase of development -- the west tower -- will have a completion date depending on the market. The entire project is being built on speculation, with no pre-leasing at this time. About 40 pieces of sandstone and some heavy timbers from the current building will be saved and used to create a historical, interpretive display within the new complex on the Plus-15 level. Smith said the owners of the project have been working with current Penny Lane tenants for several months. On Friday, about 24 businesses were told they would have to vacate by the end of this month. It's anticipated several will be relocated to nearby buildings, others will move elsewhere and some will close. As well, the timing of demolition for five businesses along 9th Avenue, including Cowboys, has not been determined.
The Penny Lane project is the second major one that will begin construction this year in the heart of downtown Calgary. The EnCana Corp. billion-dollar redevelopment at 6th Avenue and Centre Street S. will include a 58-storey office tower, The Bow, which will be the tallest building in Calgary. It is also scheduled for completion in 2011.
mtoneguzzi@theherald.canwest.com
PENNY LANE HISTORY
- The first Colonel Belcher Hospital, originally the Fairbanks-Morse warehouse, opened on the site in 1918.
- Penny Lane was created in 1973 when warehouses and office buildings were combined into a mall. Today, the block includes such well-known nightspots as Cowboys and Ceili's pub.
- A development permit was initially granted for the two-tower office project in 2002.
SOME MAJOR DOWNTOWN CALGARY TOWERS IN THE WORKS:
The Bow
EnCana's 58-storey office tower, on the north side of 6th Avenue at Centre Street S., and a seven-storey
retail and cultural building on the south side are expected to be finished in 2011, at a cost of $1 billion. At 236 metres, it will be the tallest building west of Toronto.
Centennial Place
40-storey office tower being built by Oxford Properties on the corner of 3rd Avenue and 4th Street S.W. A future 23-storey tower is also planned.
Estimated value
of Centennial Place Phase I is $208 million.
Le Germain
Calgary
Grenville Properties Ltd. and Le Groupe Germain are building the 20-storey, $110-million hotel-office-condo project at 9th Avenue and Centre Street S. -- directly across from the Calgary Tower.
Jamieson Place
38-storey, $300-million, office tower at 302 4th Ave. S.W., on the site of the former Hy's Steakhouse. The 880,000-square-foot tower is expected to be built by December 2009.
© The Calgary Herald 2007
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