On the subject of sprawl... Ottawa seriously has to start looking at options not to lose out in the core. It's as if we hooked ourselves years ago.
Public Works sets timeline for Elgin property redevelopment
By Peter Kovessy, Ottawa Business Journal Staff
Mon, Oct 5, 2009 12:00 AM EST
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The Lorne Building on Elgin Street. (Etienne Ranger, OBJ)Federal government falling behind provinces in building P3 capacity, observer says
The federal government plans to tear down one of its aged downtown office buildings and erect a new structure by 2014, Public Works officials say.
The redevelopment project will take place on the site of the seven-storey Lorne Building, located on Elgin Street beside the Lord Elgin Hotel, and the 32,000-square-foot surface parking lot behind it.
The Crown-owned lot is one of the last remaining downtown building sites, and its pending development is renewing calls to review current height restrictions that limit density in Ottawa's core.
The 48-year-old Lorne Building, formerly home of the National Gallery of Canada, could be completely or partially demolished as part of the project, said Public Works spokesperson Nathalie Betote Akwa.
The mechanical systems inside the 195,000-square-foot building have reached the end of their useful life and it is becoming increasingly difficult for the federal government to ensure it meets accommodation standards for public servants.
Public Works said earlier this year that the office building would be vacated by the summer. The department now says the several hundred bureaucrats working in the Lorne Building will be relocated by the middle of next year.
While the federal government has not yet defined the scope of the project, pressure is already building on Public Works to ensure the new building is befitting of its prestigious address, just steps away from East Block and the National War Memorial.
"This is prime real estate," said Geoffrey Gilbert, a business law partner at Ogilvy Renault.
"This is on Elgin, the gateway to our downtown ... One would think there are lots of interesting opportunities for development there."
The level of private-sector involvement in the project will depend on the procurement model selected by Public Works. It could be as straightforward as a hiring a general contracting firm to construct a new building, or a more complex public-private partnership, or P3, where more risk is passed to developers.
The federal government demonstrated its increasing interest in P3 developments earlier this year when it announced plans to build an 890,000-square-foot building in Gloucester for Canada's national cryptologic agency.
The new headquarters for Communications Security Establishment Canada will be built on a sprawling 89-acre, Crown-owned greenfield site at Blair and Ogilvie roads using a P3 model known as "design-build-finance-maintain."
CSEC, which collects foreign intelligence and protects the government's electronic information and communications, will pay an annual fee to the successful vendor for the 30-year contract. The Crown will own all the buildings constructed under the agreement.
Mr. Gilbert said the CSEC project is well-suited for a P3 development because the tenant, and its needs, is clearly identified. For example, it may not be appropriate to have large, open exterior windows, given the clandestine nature of CSEC's operations.
"I don't think in the generic office space world, it is that easy," said Mr. Gilbert.
"If they want it to be a success, they've got to talk early and often and plan this thing out so it is going to meet somebody's need and not just be a faceless building."
In this case, Mr. Gilbert said the federal government is falling behind some provinces in establishing a Crown corporation or agency dedicated to public-private partnerships. While PPP Canada is in its early stages – a $1.2-billion fund was established last month to support public infrastructure projects – the federal government lacks a single vision and defined set of rules found elsewhere, such as Infrastructure Ontario and Partnerships British Columbia, he said.
Such organizations can talk to the ministry clients that will occupy the building to ensure plans reflect their needs, and then find the best resources and uses for a site.
"It is unfortunate that Public Works is not really there," said Mr. Gilbert.
Although Public Works is still working to define the scope of the Elgin Street project, municipal zoning rules offer a hint of the site's potential. The city's new comprehensive zoning bylaw caps building heights on the property to approximately 150 metres above sea level. Ottawa is roughly 114 metres above sea level, creating an effective height limit of 36 metres or 12 storeys, assuming each floor is three metres high.
This height is keeping with the rest of the buildings on the block, including the 12-storey NavCan Building at Albert and Metcalfe streets and the 12-storey Capital Hill Hotel. However, it is shorter than some of the other buildings in the vicinity, such as the 22-storey Sixty-Six Slater building to the south and the 16-storey Manulife Place to the north.
"The height restrictions we have right now are a hindrance to development in the downtown," said Kelvin Holmes, managing director of commercial real estate service firm Colliers International Ottawa.
"We are running out of development sites in the core and, if we want to continue the growth of the core, you have to build up."
Mr. Holmes said the new building is unlikely to have a significant impact on the federal government's ongoing need for office space, noting Public Works is starting to take a serious look at expanding outside the core.
They are already leasing some space in Kanata and are advancing a strategy of creating public-sector employment "nodes." Earlier this year, the federal government purchased a 29.6-acre development site at St. Laurent Boulevard and Highway 417 and released initial solicitation documents to plan the redevelopment of the Tunney's Pasture complex. The federal government is also widely expected to eventually occupy Nortel Networks's massive Carling Avenue campus.
"They will always have a certain requirement to be (close) to the Hill," said Mr. Holmes.
"But I wouldn't be surprised if we start to see more departments move out of the downtown core ... It is very expensive to build downtown and it's a lot easier to pick up a site in the suburbs and develop out there."
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SIZING UP THE PROSPECTS
Location: Elgin Street, between Slater and Albert streets, owned by the federal government
Lorne Building: Currently seven storeys with a total of 195,000 square feet
Adjacent surface parking lot: 32,355 square feet
Height restrictions: Approximately 150 metres above sea level (official city website lists Ottawa being 114 metres above sea level)
Timeline: Project is to be completed by 2014