Building August September 2013

real estate development

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construction

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architecture

63

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63 04

CONTENTS

what’s on BUILDING.ca

FEATURES

16 > Build, Rebuild or Restore? /

The recovery stories of two small Canadian towns illustrate how community-focused land development builds better towns and stronger relationships.

By Andrew Sobchak

22 > Here Comes The Rain Again /

A new engineering protocol is attempting to provide a framework for assessing and responding to the risk that future climate change may have on the built environment.

By Jeremy Carkner

READ > The Green Municipal Fund’s leftover cash Many municipalities lack the tools to facilitate brownfield redevelopment, according to stakeholders.

25

25 > The 51st State? /

The road is historically littered with the corpses of American retail brands that attempted to expand into Canada.

But that hasn’t stopped the current invasion. Is Canadian retailing at a productivity tipping point?

By James Smerdon and David Bell

TOUR > TELUS Sky The newly unveiled 430,000-sq.-ft. mixeduse tower in Calgary.

28 > ‘Co’me together /

ARK believes a community centre’s primary responsibility is to support a community’s wellness, a sentiment illustrated by the integrated experiences within the UJA Federation Community Complex.

By Peter Sobchak

EXPLORE > McGregor Community Centre Lounge Bortolotto creates a bright, open and lofty new community centre lounge.

ABOVE IMAGE:

IN EVERY ISSUE

5 > Editor’s Notes 6 > Developments 12 > Market Watch 14 > Legal 30 > Viewpoint

Fashion retailer Simons has gone west and opened a new retail space in the West Edmonton Mall. Their first foray outside of Québec, Simons tasked Torontobased figure3 with the 115,000-sq.-ft. store design. Photo

by Ben Rahn.

building.ca

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Volume 63

04 Number Editor / Peter Sobchak Art Director / Roy Gaiot Legal Editor / Jeffrey W. Lem Contributors /

David Bell, Jeremy Carkner, William J. Ferguson, Megan Lem, James Smerdon, Andrew Sobchak

Circulation Manager / Beata Olechnowicz (416) 442-5600 ext 3543 Reader Services / Liz Callaghan

Hurricane Sandy drenches the North Atlantic shore; a tornado rips through Oklahoma; wildfires set Arizona forests ablaze; flood waters cover Minden, Ont., Toronto and, of course, Calgary. All these major disasters have happened in North America just within the last year and caused billions of dollars in damages. Calgary’s clean-up alone is currently estimated at “well over” $5 billion. If it hadn’t crossed their minds before, it probably has now, as many builders and owners are beginning to realize that they need to plan for extreme weather events, even if they have never come close to experiencing such an event in the past. The economic consequences of failing to do so can be devastating.

How devastating? Ask Guangzhou, Nagoya, Shenzen, Guayaquil, or Abidjan. Don’t recognize those cities? Try New Orleans, Miami, New York, Tampa-St. Petersburg, Boston, Osaka-Kobe, and even better, Vancouver: these cities are geographic cousins in that they are all coastal cities, and will be cities likely to be hit by major flood damage over the next 37 years, according to a study conducted through the Organisation for Economic Co-operation and Development and published in the journal Nature Climate Change. Worldwide, damages to major coastal cities will reach $1 trillion by 2050. The rise in annual costs, from $6 billion in 2005 to a projected $52 billion by mid-century, is attributed to rising sea levels and extreme weather due to global warming.

And here’s a shocker: scientists are now 95 per cent certain that global warming is caused by human activity, according to the U.N.’s updated Intergovernmental Panel on Climate Change Fifth Assessment Report. While this underscores what we already know (but some still refuse to accept), science is still incapable of predicting what will hit where, data that regional planners would surely love to have.

While scientists don’t expect us to feel the full effect of global warming and climate change for a few more decades, only a fool would ignore the warnings and advice.

We’re getting more and more studies and reports, like the PIEVC Engineering Protocol discussed in this issue, that assess the variety of risks, in addition to things like sea level rise, that the built environment will likely face as we feel Mother Nature’s wrath at our selfishness. Many combine both adaptation and mitigation strategies and set priorities for investments going forward. But they are investments that many can’t seem to wrap their heads around. As John McIlwain pointed out in an assessment of post-Sandy studies in Urban Land, “there are plenty of excellent recommendations on what to do to reduce damage in the future. [But] the costs of many...are significant, controversial, and often considered unaffordable in today’s constrained economy.”

The fact is that we will be facing more natural disasters in the years ahead —whether they come in the form of tornados, wildfires, flooding or hurricanes — and we need to start developing a psychology that accepts it and is ready to deal with it. This is not to say we should drop everything we’ve been doing to green the building industry and turn now to disaster mitigation, but getting a head start on early warning systems, evacuation planning, more resilient infrastructure and financial support to rebuild economies, say researchers, could end up being highly cost-effective, not to mention life-saving. The bottom line is cities need to incorporate disaster resilience and sustainability into their existing infrastructure while at the same time into their plans for growth. Because the more cities grow, the more they have to lose.

Advertising Sales / Greg Paliouras (416) 510-6808 / gpaliouras@Building.ca Senior Publisher / Tom Arkell Vice President, Publishing Business Information Group / Alex Papanou President, Business Information Group / Bruce Creighton Building magazine is published by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd. 80 Valleybrook Dr. Toronto, ON M3B 2S9 Tel: (416) 510-6845 / Fax: (416) 510-5140 E-mail: info@building.ca Website: www.building.ca SUBSCRIPTION RATE: Canada: 1 year, $30.95; 2 years, $52.95; 3 years, $64.95 (plus H.S.T.) U.S.: 1 year, $38.95 US, Elsewhere: 1 year, $45.95 US. BACK ISSUES: Back copies are available for $8 for delivery in Canada, $10 US for delivery in U.S.A. and $15 US overseas.

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AUGUST SEPTEMBER 2013

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06

DEVELOP-

MENTS

20 per cent more respondents experiencing increasing rather than decreasing workloads during the latest quarter. Encouragingly, the survey indicates this positive trend is broad based across the industry’s sub-sectors during Q2, with the strongest, in terms of momentum, being public non-housing, private industrial and private commercial.

Weakest performers (compared with the preceding quarter) were the public and private house building sectors. The results show that respondents, on average, forecast over the next 12 months total workloads to increase by 5.6 per cent, News headcounts to increase by 3.3 per cent and profit margins to widen by 2.5 percentage points.

Global construction market Survey respondents indicated large infrastructure proto reach $15 trillion by 2025 jects are still driving the construction market, including the sanctioning of LNG and oil pipelines to the coast and through the U.S., and the LONDON, U.K. | A new report by Global Construction Perspectives and Oxford Ecomain factors limiting building activity nomics forecasts the volume of global construction output will grow by more than 70 are financial (61 per cent) and regulaper cent to US$15 trillion worldwide by 2025. The global study shows the meteoric tory constraints (53 per cent). In terms growth, which outpaces that of global GDP, will be concentrated in three countries: of skills shortages, survey respondents China, the U.S. and India. China overtook the U.S. to become the world’s largest constated the main areas of concern were struction market in 2010, and is expected to increase its global share from 18 per cent quantity surveyors and other constructoday to 26 per cent in 2025, despite an expected slowdown. “China and India will tion professionals at 58 per cent and 55 need to build another 270 million new homes by 2025 — mostly affordable homes,” per cent respectively. says Mike Betts from Global Construction Perspectives.

“There are now more convincing Significant opportunities have arisen for a new generation of ‘Asian Tigers.’ Indosigns that economy is picking up but nesia, Vietnam and the Philippines are becoming increasingly attractive for exportwith inflation below target, no change oriented manufacturing and represent a $350 billion construction market growing at in interest rates is likely over the next 12 more than six per cent annually. India will overtake Japan as the third-largest conmonths. This should help to support the struction market with annual growth averaging 7.4 per cent annually in construction construction sector, underpinning furexpected to exceed that of China. The construction market in Western Europe is ther gains in both workloads and jobs. expected to be almost five per cent smaller in 2025 than its pre-recession peak in Although access to finance remains an 2007, whilst North America is forecast to be almost 40 per cent larger. issue for some developers, the overarch“By 2050, there’ll be two billion additional city dwellers. Sustainable urbanization ing picture emanating from the survey will be a major construction challenge and the industry must strive to find innovative is pretty encouraging,” said Simon Rubnew products and solutions, to contribute to building better cities,” says Bruno Lainsohn, RICS chief economist. font, chairman and chief executive of Lafarge.

“World construction markets are at a tipping point already with 52 per cent of all construction activity in emerging markets today. We expect to see this increasing to 63 per cent by 2025, with China and India contributing most to growth in emerging markets.” – Graham Robinson, executive director, Global Construction Perspectives

Canadian construction growth remains strong TORONTO | The maiden RICS Canadian Construction Market Survey indicates that momentum in building activity was firm with nearly all the sectors covered registering increases in activity during Q2. This is likely to remain the same in the near term, as forward-looking indicators on workloads, employment, and profit margins suggest this positive trend will persist over the balance of this year and into 2014.

Total workloads at the headline level increased during Q2 where the net balance registered a positive reading, with AUGUST SEPTEMBER 2013

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Global partnership to accelerate green building growth

WASHINGTON, D.C. | IFC, a member of the World Bank Group, and the World Green Building Council (WorldGBC) announced a collaboration intended to rapidly scale up the construction of green buildings in emerging markets by connecting WorldGBC’s network of national green building councils to IFC’s investment and advisory program. WorldGBC’s local affiliate councils will certify green buildings through IFC’s EDGE, a new web application that reveals solutions at the early design stage to reduce energy, water, and material consumption by 20 per cent.

The partnership will focus on rapidly urbanizing countries with surging population growth that need to build

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TELUS Sky

sustainably to avoid emissions growth, bolster energy security, and minimize resource depletion. The built environment is expected to double by 2050; China alone has the potential to add 53 billion square meters of building space, which is equivalent to the building stock of Latin America today. To date IFC has invested more than $570 million in resource-efficient buildings, including directly and through financial intermediaries. IFC has also worked with the governments of Colombia, Indonesia, the Philippines, and Vietnam to help develop their regulatory environments.

House Toronto (LEED Gold certification in Core and Shell and LEED Platinum in Building Operations & Maintenance); TELUS House Ottawa (LEED Gold); and Place TELUS Québec in Québec City (LEED Silver for retrofitted buildings). It also makes TELUS the largest current lease holder of LEED Platinum space in North America.

07

Project Announcements TELUS coming to Calgary TORONTO | Calgary received a piece Lassonde School of Engineering of good news in the post-flood wake when it was announced that they will York University unveils designs for new be the recipient of a new TELUS towEngineering Building er. The telecommunications giant, in joint venture with Allied ProperTORONTO | York University has unveiled plans for a new ties REIT and Westbank, will de$85-million Engineering Building at that will be home to velop TELUS Sky on the northeast the Lassonde School of Engineering, which aims to graduate “entrepreneurial engineers with a social conscience and corner of 7th Avenue SW and Cena sense of global citizenship.” Measuring 169,000 square tre Street SW. Designed to a LEED feet over five stories, the building, will open in 2015, will acPlatinum standard, the developcommodate academic space for the electrical, civil, and mechment will be comprised of apanical engineering disciplines. Design workshops, project proximately 430,000 square feet of office space, 275,000 square areas, classrooms and laboratories will feet of rental apartments, 15,000 square feet of retail be included in the five floors of space. space and 285 underground parking spaces. TELUS Special emphasis has been placed on social and public areas that will encouris expected to lease approximately 155,000 square age undergraduate, graduate and postfeet of space in the office component of the developgraduate students to mix with faculty ment. Allied will contribute its property at 100 - 7th members and researchers. Currently a Avenue SW to the joint venture, and TELUS will parking lot, the site for the new Engincontribute its adjacent property at 114 - 7th Avenue eering Building is in the southwest SW. This is expected to occur in June of 2014. Each quadrant of York’s Keele campus, west of TELUS, Westbank and Allied will have an unof the Scott Library and overlooking the divided one-third interest in the joint venture.

Stong Pond and Arboretum to the south Westbank will act as development manager, and west. with Bjarke Ingels Group (BIG) and DIALOG reThe Ministry of Training, Colleges tained as architects for the development. Construcand Universities has invested $50 miltion is expected to commence in July of 2014 and be lion and York University is investing complete by 2017. TELUS Sky builds upon an im$35 million in the project, including a pressive track record of developing LEED Platinum recent $5 million gift from Ignat Kanand Gold buildings across Canada, joining: TELeff, chairman and CEO of the Kaneff US Garden, which is currently under construction in downtown Vancouver (LEED Platinum); TELUS Group of Companies. The design of the building.ca

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DEVELOPEngineering Building, by ZAS Architects + Interiors in Toronto, is conceived of as a cloud and will hover over a landscape that combines artificial and natural landscape features. A prominent feature of the landscape, a rock inspired by the geology of Georgian Bay, will provide a roof over design workshops and project areas.

Unfortunately, on the heels of this unveiling came the sad news of the sudden passing of Greg Woods, OAA, MRAIC, NCARB, principal at Gregory Woods Associates and as a consultant to ZAS Architects the design-lead for the future home of the Lassonde School of Engineering. He was an avid champion of great architecture and chose a path that inspired many.

Always brilliantly creative, he challenged those around him to do things differently and take the road less travelled. Greg advocated a playful discovery process in design, which endeared him to clients, colleagues and students. Greg was also a good friend of this magazine: beyond being a regular sounding board and font of creative ideas, he also served as judge at our fourth annual Outside the Box Awards in December 2008.

Oxford to add to Toronto’s office tower crop TORONTO | Downtown Toronto’s skyline will grow and change yet again, thanks to an announcement by Oxford Properties Group. The Ernst & Young Tower, named after the lead tenant, will be a 900,000 square foot, 40 storeys, class AAA, LEED Platinum office tower located at 100 Adelaide Street West.

Designed by the international firm of Kohn Pederson Fox and assisted locally

by WZMH Architects, it will form part of Oxford’s full-block Richmond Adelaide Centre mixed-use complex. The development is slated for completion in June 2017, and is currently 45 per cent pre-leased.

Ernst & Young Tower will feature 28,000-sq.-ft. floorplates on the fivestorey podium. At ground level, the building will retain the historic Concourse Building façade including the mosaics designed by Group of Seven artist J.E.H. MacDonald. In addition to

“A house is not a home unless it contains food and fire for the mind. We’re creating a home for what we call Renaissance Engineers, not a pristine academic palace with gleaming lecture theatres – we don’t have any in fact!

Students will be writing on walls, building robots, brainstorming business plans, and huddling in project groups.

This building won’t create great ideas but it will give our students a home to do just that.” – Dean Janusz Kozinski, Lassonde School of Engineering

MENTS

Ernst & Young Tower

multiple outdoor spaces, including a 5,000-sq.-ft. terrace on the sixth floor, and other various building envelope and mechanical features intended to achieve a LEED Platinum certification, the leases at the building represent Oxford’s first official use of a “Green Lease,” which incorporates commitments on how the building is to be occupied, operated and managed in a sustainable way.

09

Awards By the numbers: 5468796 / $50,000 / Table for 12 / 8 cities

OTTAWA | The Canada Council for the Arts has awarded Winnipeg-based 5468796 Architecture the $50,000 Professional Prix de Rome prize for their project Table for 12, which will allow hosts from eight cities to “set the table for informal conversations about architecture.” The aim of the project is to promote Canadian architecture, identify synergies between cities and provide opportunities for global exchange. These ‘tables of 12’ will include architects and their clients, journalists, politicians, artists and engineers among others. They will discuss the state of design in their respective city as well as their policies and what it takes to create a strong design culture.

The host cities span four continents. Table for 12 will launch at the Winnipeg Design Festival in September 2013, followed by discussions hosted in Mexico City, New York, Lisbon, Eindhoven, Copenhagen, Tokyo, and Sydney. In June 2014, the journey will conclude in Winnipeg, where the project’s findings will be shared during the RAIC Festival of Architecture.

Founded in 2007, and in just six years, 5468796’s projects have received every significant Canadian design award there is, including the 2013 RAIC Emerging Architectural Practice Award and a 2012 Governor General’s Medal in Architecture for Bloc_10, in addition to a number of important international prizes. Last year, they were Canada’s official representation at the 2012 Venice Biennale in Architecture with Migrating Landscapes. b

5468796 Architecture

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“A year ago, office landlords and tenants – who are not inclined to see eye to eye – would have agreed that downtown office vacancy rates were too low. With 22 downtown office towers now under various stages of construction across the country, one has to wonder if the pendulum is beginning to swing too far in the opposite direction.”

Developers remain committed, tenants take pause

WATCH

AUGUST SEPTEMBER 2013

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— John O’Bryan, chairman of CBRE Limited

TORONTO | Two new reports from CBRE Limited are telling in terms of where the Canadian commercial real estate market has been and how the future is shaping up. The recently released Global Prime Office Occupancy Report compared markets across the globe over the past year and found that two Canadian cities were amongst the top performers in terms of rent growth and asking rents for prime office space. The National Office and Industrial Second Quarter 2013 Statistical Summary however, points to softening demand for office space and the emergence of dynamics that may not produce the impressive office statistics that Canada has come to enjoy in recent years.

“A year ago, office landlords and tenants – who are not inclined to see eye to eye – would have agreed that downtown office vacancy rates were too low,” said John O’Bryan, chairman of CBRE Limited. “With 22 downtown office towers now under various stages of construction across the country, one has to wonder if the pendulum is beginning to swing too far in the opposite direction.”

Class A downtown office vacancy rates below 5.0 per cent had become the norm across Canada, which produced some daunting rental rates for tenants in the market. According to CBRE’s Prime Office Occupancy Report, Calgary recorded the

eighth largest increase in prime office rents in the world on a year-over-year basis as of the first quarter of 2013, while Toronto was the 50th most expensive office market and the top Canadian city on the list. Landlords have responded to these conditions by launching new office projects across the country, which currently total 11.6 million square feet. Pre-leasing in the new towers continues to be healthy and has allowed construction to start on 22 downtown office towers, with additional starts expected; however, market conditions are changing.

The only North American market to make the top 10 list was Midtown Manhattan in New York, which ranked 10th. Demand for prime space from the financial services industry is increasing for the first time since the recession ended, although prime rents in high-end buildings that cater to boutique financial firms have yet to reach their pre-global financial crisis market highs.

It is expected that recent investment activity for Park Avenue and Madison Avenue trophy buildings at aggressive capitalization rates will continue to put upward pressure on prime rents.

“There was some surprise last quarter when office leasing was almost entirely confined to the new towers. We now have a second quarter of data indicating soft demand for existing office space and some significant increases in vacancy,” said Ross Moore, Director of Research for CBRE Limited. “While the Canadian office market is strong in comparison to almost any other country in the world, there are new dynamics at play which could have implications for the market once the wave of new supply comes on line in the years ahead.”

The second quarter of 2013 marks the second consecutive quarter in which more office space was returned to the market than was absorbed by tenants. There was a total of 718,330 square feet of negative absorption in downtown office markets across the country, which caused the overall downtown vacancy rate to climb 30 basis points (bps) quarter-over-quarter to 6.5 per cent. Over one million square feet of downtown office space has been vacated so far in 2013. Five downtown markets, including Vancouver, Calgary, Toronto, Montréal and Halifax, have sublet as a percentage of vacant space above 20 per cent. This forward looking indicator of tenant intentions is highest in Calgary at 48.5 per cent.

“The months ahead will help to confirm some of the trends that are establishing themselves and allow us to better forecast how this construction cycle plays out,” Moore suggested.

“Halfway through 2013, we are seeing moderate employment growth being counterbalanced by the push for office space efficiency, and existing stock is at a significant disadvantage compared to the new builds.”

All the major markets recorded an increase in vacant downtown office space. After a relatively strong performance last quarter, Toronto joined Calgary and Montréal by posting significant negative absorption this quarter. The slowdown in the Calgary office market, which started in the back half of 2012, continues. Vacancy in downtown Calgary climbed 30 bps quarter-over-quarter to 6.0 per cent, up from 5.0 per cent a year ago. Landlords appear to have responded to the loss of momen-

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Source: CBRE Research, Q1 2013

12

MARKE T

Source: CBRE Research, Q1 2013

tum in the Calgary office market as the average downtown asking rent in Class A buildings fell $1.16 per square foot (psf) to $39.37 psf ­— a significant change for a market that had been a global leader in prime office rent growth.

There was slightly better news for the suburban office market. Over 700,000 square feet of construction was completed in the suburbs across the country this quarter, much of it was leased. The suburban vacancy rate climbed 40 bps to 11.9 per cent; however, the overall average asking rent in Class A buildings increased $0.93 psf to $18.56 psf quarter-over-quarter. This market is showing moderate strength compared to downtown office markets due in part to the decrease in construction over the last two quarters. The amount of suburban office space under construction is now 1.0 million square feet below the peak that was recorded in the fourth quarter of 2012.

National downtown office construction on the other hand, rose 290,000 square feet quarter-over-quarter to 11.6 million square feet. Toronto leads the way with 5.5 million square feet under construction, followed by both Calgary and Vancouver at 1.7 million square feet.

Calgary has another 2.7 million square feet of office space either announced but yet to start construction or likely to be announced soon. In total, downtown office construction is very near the highwater mark that was set in the 2009 office construction cycle.

“It’s a bit like déjà vu really. There were concerns in 2009 as to how that construction cycle would play out and in the end, the new stock was pre-leased and the vacated existing stock was absorbed without any heroic effort,” said O’Bryan.

“This time, however, developers look poised to get a little ahead of the market. Recent leasing activity should bring focus back to the fundamentals and the outlook for existing office stock.”

Industrial The Canadian industrial market continues to exhibit strong fundamentals overall; however, construction is putting some upward pressure on indus-

Largest Increases in cost of prime office space 12-month % change increases - as of Q1 2013

1

Jakarta

Indonesia

38.9% 2

Houston (Suburban) U.S.

21.2% 3

Boston

(Downtown) U.S.

15.4% 4

Houston

(Downtown) U.S.

14.9% 5

Manila

Philippines

14.9% 6

Beijing

(Finance Street) China

14.7% 7

San Francisco (Downtown)

U.S.

14.3% 8

Calgary

(Downtown) Canada

12.0% 9

Seattle

(Suburban) U.S.

10.5% 10

Hong Kong

(West Kowloon) Hong Kong

9.5%

trial availability rates in Western Canada. The pickup in the U.S. economy and signs of economic stability in China are supporting demand for industrial space in Eastern Canada.

“The industrial market continues to adjust to decreased capital spending in the resource-dependent markets in Western Canada,” said Moore. “Industrial construction activity as a percentage of existing inventory in the west is over three times that in the east and markets will likely need time to recalibrate to tempered growth in the energy sector.”

The national industrial availability rate was unchanged at 5.8 per cent this quarter, but there were some significant changes locally. Four markets had availability rates climb and five had availability fall. Increased industrial availability was limited to Western Canada, with some big moves occurring in Calgary and Edmonton where availability rates climbed 170 bps to 6.3 per cent and 110 bps to 5.2 per cent, respectively, quarter-over-quarter. Markets in Eastern Canada continue to tighten and the Greater Toronto Area (GTA) industrial market recorded impressive leasing activity in the second quarter of 2013 as the availability rate fell 30 bps to 4.5 per cent. The GTA has recorded 7.7 million square feet of positive absorption in the first two quarters of 2013, an amount that would normally require three quarters to achieve based on the quarterly historical average. Rental rates were up in both Western and Eastern Canada to an average $5.89 psf nationally, which reflects the strength of the industrial sector across the country despite some course correcting in resource-dependent markets.

“The second quarter office and industrial data shows markets making adjustments to economic developments and ongoing construction cycles,” said O’Bryan. “Balance is difficult to achieve and thankfully none of the Canadian markets are too far off the mark at the moment. Now is the time for the commercial real estate industry to remain vigilant in order to ensure that this equilibrium is maintained.” b

Most Expensive prime office space occupancy costs in USD/ sq. ft./annum - as of Q1 2013

13

1

Hong Kong (Central) Hong Kong

$235.23 2

London - Central (West End) United Kingdom

$222.58 3

Beijing

(Finance Street) China

$194.07 4

Beijing

(Jianguomen - CBD) China

$187.06 5

New Delhi

(Connaught Place - CBD) India

$178.96 6

Hong Kong

(West Kowloon) Hong Kong

$173.90 7

Moscow,

Russian Federation

$165.05 8

Tokyo

(Marunouchi/Otemachi) Japan

$161.16 9

London - Central (City) United Kingdom

$132.94 10

New York

(Midtown Manhattan) U.S.

$120.65

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14

LEGAL

Toronto may ultimately decide to raise development charges, but this “growth pays for growth” notion is by no means a one-size-fits-all solution, and may in fact be more like biting the hand that feeds you.

By Megan J. Lem

Toronto City Council recently deferred a decision to almost double the development charges that it currently imposes on new building permits. Readers of Building are probably cynical enough to expect little hope that Toronto, even with a generally tax adverse mayor, will be able to resist the additional revenue that doubling development charges would bring, especially with renewed talk of a Scarborough subway in the news. While you’ll get no argument about the dire need for new infrastructure spending in Toronto (and in most of Canada’s major cities), many are saying with varying degrees of force that increasing development charges might not be the right way to go.

The legal framework of “modern” development charges began when the Development Charges Act, 1989 was passed, ostensibly “to regularize a diverse system of municipal charges or levies imposed on development” and to bring “certainty, uniformity and predictability” to the funding of municipal and school capital infrastructure.

The statute provides municipalities with a financing tool premised on the principle that “growth pays for growth” ­— new demands on municipal infrastructure should be paid for by new building permits rather than the existing tax base.

In Toronto, the “growth,” and hence the burden of increased development charges, has been almost exclusively in residential condominium construction (both high rise and townhouses), and the development charges on a typical two-bedroom condo unit in Toronto are set to increase dramatically from approximately $12,000 to $24,000 per unit if the new by-law is passed.

Although many developers and builders feel that they may as yet escape large increases in development charges because their particular developments do not in fact require any new infrastructure capital, this is false comfort. Development charges do not need to be tied to or limited to the services required by a specific project. In fact, development charges are not a payment for specific services needed to facilitate the development of specific lands (unlike, for instance, Section 37 contributions which are supposed to be relevant and tied to the specific project being charged). Accordingly, even if no new municipal infrastructure capital spending is needed for a project, development charges may still be imposed on that project to fund infrastructure capital spending generally needed elsewhere in the community.

Municipalities anxious to impose development charges should keep in mind a few things. First of all, development charges are not at all that easy to calculate. There is a fairly strict budgeting and financial modeling protocol that the municipality needs to go through to establish, in detail, its projected municipal infrastructure needs and compliance with the legislation which prescribes exactly what infrastructure can be charged for and to what extent. It isn’t just a AUGUST SEPTEMBER 2013

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back-of-a-napkin sort of process, and it can be costly and time consuming.

Municipalities also have to remember that, certainly in a residential setting, the development charges are almost always paid for by the purchaser and not the builder, all as part of the closing adjustments to the purchase price. Although recent amendments to the Tarion addendums make the flowthrough of development charges more apparent to prospective buyers, these Tarion amendments do not prevent builders from passing on development charges, almost always in their entirety, to their buyers. This is a fairly wellknown and universal practice in the industry, and buyers of new commercial and residential properties (especially in areas outside of the City of Toronto, jurisdictions which have always relied heavily on development charges) are quite aware that development charges will be a sizeable “transaction cost” to be budgeted for on closing. Of course, developers and builders are adversely impacted whenever any of their costs are increased, even if such additional costs can be passed to their buyers, but the irony is that increasing development charges ultimately ends up mostly taxing the very new residents that many of these mu-

Even if no new municipal infrastructure capital spending is needed for a project, development charges may still be imposed on that project to fund infrastructure capital spending needed elsewhere in the community.

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nicipalities are desperately trying to attract in the first place.

Also, the “growth pays for growth” theoretical paradigm that underpins development charges is hardly a “one size fits all” solution. While in some circumstances, growth (new home buyers) should perhaps be funding the capital costs of new municipal infrastructure, there are just as many examples where it makes no sense to require new home buyers to be funding, howsoever marginally, the costs of new municipal infrastructure. As and by way of a hypothetical example only, consider the new Scarborough subway. How can it be said that new condo buyers should be paying to fund subway development when the benefit of that subway will obviously accrue to all taxpayers in the City, both existing and new?

Finally, as both developers and homebuyers in Toronto know all too well, while Toronto may indeed have the lowest development charges in the GTA (even after doubling the current development charges), Toronto is also still the only jurisdiction in Ontario (and one of only a handful in all of Canada) that charges a municipal level land transfer tax in addition to the land transfer tax already paid to the Province, effectively doubling the land transfer tax payable for properties in Toronto. Toronto also happens to be one of the most aggressive municipalities in Ontario in terms of collecting capital contributions from developers under Section

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Megan J. Lem is a student in the Faculty of Law at the University of Western Ontario.

37 of the Planning Act (cash for “community benefits”). Between its municipal land transfer taxes and its Section 37 income, Toronto is not exactly a lightweight in terms of forcing growth to pay for growth!

It is trite to conclude that there is no one silver bullet solution for funding much needed municipal infrastructure, but drastically increasing the development charges in Toronto needs thorough consideration before the bylaw is voted-upon. The building and construction industry in Toronto and elsewhere in this country has truly been an engine of growth, and will likely continue to provide such economic stimulus for years to come — unless singled-out for industry specific overtaxation by local municipalities. There is a very real risk that municipalities, anxious to fund growth, could, in their misguided enthusiasm, kill the proverbial goose that lays the golden egg. b

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16

BUILD REBUILD RESTORE

By Andrew Sobchak

The recovery stories of two small Canadian towns illustrate how community-focused land development builds better towns and stronger relationships.

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seconds is not a lot of time to prepare for disaster, but that’s all they got. On August 21, 2011 at 3:48 pm the +7,500 residents of Goderich, Ont. were issued a warning of dangerous weather brewing over Lake Huron. Then at 3:55 pm an F3 tornado touched down in the town’s harbour. The twister tore into a portside salt mining complex and then raced up the Maitland River valley to dissect the community’s renowned eight-sided downtown, eventually dissipating in a Huron County farm field 20 kilometres inland. Damage estimates topped $115 million and a town once dubbed

by Queen Elizabeth II as Canada’s prettiest now bore an ugly scar.

Historically awash in quaint architecture and postcard-perfect sunsets has made Goderich a magnate for tourists, attracting 500,000 of them a year, and the $50 million this cohort spends while here has made tourism a vital pillar in the town’s economy. In

A store on West Street in Goderich, Ont.’s historic downtown before the tornado hit (above), the damage (right), and in August 2013 (below) after the town’s rebuilding efforts.

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the days that followed the tornado, The Town faced a delicate balancing act of rebuilding at a rate that was fast enough to not cripple commerce but slow enough to respect and preserve what remained of the town’s physical heritage. Deciding to build, rebuild or restore would define the future of Goderich.

And they’re not alone in the search for the best recovery strategy. Critical land development decisions always follow disaster, and across Canada each year dozens of small towns see the ugly side of Mother Nature. The Insurance Bureau of Canada estimates that in 2011, the year of Goderich’s tornado, catastrophic losses due to natural disasters cost Canadians $1.1 billion, with the wildfires that swept through Slave Lake, Alta. accounting for $700 million of this total. For these small towns, the funds entering their borders through insurance claims, government relief programs or private donations represent one-time capital injections whose magnitude have never been seen and likely won’t be again. The emotional scars disasters leave are their tragedy, but their legacies are defined by how communities rebuild in their wake.

Scratches on a Postcard Twilight at Goderich’s Harbour Park is spectacular. Soft and seemingly impossible arrays of pinks and purples wash the evening sky like a watercolour while Great Lakes freighters float silently in the distant cool waters of Lake Huron.

Stunning vistas coupled with historic charm have always made Goderich a haven for the quaint and quiet, justifying its reputation as a tourist gem on Ontario’s left coast.

But the past few years have been tough on this storied community. A heavy manufacturing plant closed, erasing 400 jobs, and 200 more evaporated with a failed youth centre on the southern fringe of town, perhaps emblematic of a general depopulation of the area that has been drawing young people out of the community.

With a growing decline in industries like manufacturing, Goderich’s reliance on tourism became more acute, so when the most powerful tornado Ontario had experienced in 15 years touched down adjacent to Harbour Park in 2011, it not only threatened residents’ lives, it threatened their livelihoods.

In 15 minutes the twister damaged 283 buildings and left the community’s largest remaining industrial employer, the Sifto Salt mine, in shambles. 54 buildings around town would eventually require complete demolition, 13 in or near the heritage district of the octagonal downtown, known as The Square. Among the wounded were the Victoria Street United Church, the town’s vaunted opera house, the Masonic Lodge and many other shops and galleries.

“This scale of damage to a heritage district was unprecedented in the province and arguably the country,” suggests Denise Van Amersfoort, the Huron County Planner assigned to the town. “We also lost about 1,000 trees,” she notes, referring to the denuding of several main streets, Harbour Park and the public space at the centre of The Square known as Courthouse Park.

It was a shocking and emotional time for residents, many of whom had grown up with the town and known it only as the green oasis it had been just minutes earlier. “One resident commented to me that with the loss of all these old trees he would never in his lifetime see his street the same way again,” recalls Van Amersfoort. “It was a significant loss of canopy...and character.” Town leaders now had to decide if and how they would rebuild in weeks what took decades to create.

The Square would remain closed for three weeks after the tornado as crews worked by day to clear debris, repair infrastructure and re-establish utility service.

But in the evenings of late summer, a time when the heart of Goderich would typically pulse with life, it was now guarded by police and silent. Already feeling the

pressure of recessionary forces, Mayor Delbert Shewfelt, known as Deb to his local constituents, believed the key to recovery would be found in getting the businesses that populated The Square operational as soon as possible. With support from leaders at the BIA and Chamber of Commerce, Town Council instituted policies of administrative easing to make this happen.

Two by-laws were passed, a Temporary Use By-Law and Tornado Rebuild By-law, which relieved certain restrictions on from where in town affected businesses could operate and how they could rebuild damaged properties. “People could rebuild on the same footprint without requiring committee of adjustment approval, business victims could set up any place to get up and running regardless of the zoning, and we fasttracked heritage permits,” says Shewfelt. But it was the last measure that would generate the most contention.

In a town whose character rested on history, many residents were alarmed at the speed damaged heritage structures were demolished in the name of recovery. Building conservationists from across the country were consulted in the hopes that their opinions on salvagability might delay or halt this approach. In an October 11, 2011 interview with the Goderich Signal Star, the manager of the Architectural Conservancy of Ontario, Rollo Myers, suggested the Town was turning its back “on buildings that [could] be repaired.” A life-member of the Huron County Historical Society, former Town Councillor and Reeve, Paul Carroll, severed all his professional and volunteer ties with the Town in an open letter in the London Free Press over the tearing-down of the opera house and the studio of photographer R.R. Sallows.

Several restoration experts claimed these structures could be saved, but likely at a large financial cost and delay in fully re-opening The Square for business. Heritage, here, is a serious issue and the appearance of business being prioritized above it was divisive.

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Classification of building damage

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GODERICH reconstruction required structural damage severe damage requiring demolition

pat

Yet Shewfelt’s economy-friendly approach did generate some immediate returns. The Community Economic Revitalization Committee reported that in the first year following the storm, 88 per cent of the impacted businesses chose to stay in town and rebuild while 16 new businesses opened their doors.

Also, the value of commercial building permits jumped from $500,000 in 2011 to $10.6 million in 2012, representing 45 per cent of all building permit value in the first full year after the storm.

With each new permit application, Van Amersfoort applied statutes of the new and existing development by-laws to help improve the visual appeal of The Square. One storey commercial buildings in the core were rebuilt with two to enhance sightline continuity around the octagon. “There are many great examples. The whole north end of West Street has entirely changed — and for the better,” she says, citing one enthusi-

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ho f th e

astic business owner who built an 1870’s replica structure, replete with two commercial storefronts, four apartments above and an elevator to update site accessibility. “My main message as Planner was to ‘slow down,’” says Van Amersfoort.

“There is a human need and desire following a disaster to put everything back the way it was, but if we did [just] that, we’d be losing the opportunity to make improvements.” Van Amersfoort applied her measured pace to the redevelopment of the parks and public spaces. One week after the downtown re-opened and four weeks after the tornado, a community meeting was convened to engage residents and exchange visions in an informal but collective setting.

“There was an acceptance that we wouldn’t be able to fix everything all at once,” she recalls, “but there was a renewal of belief that the immediate focus should remain on The Square.”

As a result of the meeting, Town Council commissioned Toronto-based The Planning Partnership to conduct a six-month Master Plan study of the downtown core, examining heritage, transportation routes and walkability. The goal was to create an urban vision for Goderich’s downtown and a landscape plan to re-energize Courthouse Park. On November 10, 2012, this $2.6 million plan started to come to life. For many of the residents and those intimately involved in Goderich’s rebuild, this was a special and long-anticipated day. Led by an honour guard of police, fire and hydro vehicles, six flatbed tractor trailer trucks filed into The Square, bearing the first of 153 trees to be planted in Courthouse Park. The project would still take weeks to complete as the redwoods, oaks, beech and hard maples — some reaching up to 60 feet tall — required careful installation, but this signalled a turning of the page; a restoration of canopy and a restoration of character.

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13-09-04 2:44 PM

torn

ado

Goderich had been shaken metaphorically and literally by 280 km/h winds.

With damage to its beloved heritage buildings and tourism industry at risk, residents were forced to examine their goals as a town and how to move forward to achieve them, as evidenced by a new study initiated in June 2013 to build upon two heritage plans from the 1970s and 1990s — whose at-times incongruity led to confusion during the tornado rebuild — and enhance protection of the unique downtown character while meeting the future development needs of property owners.

“I think Goderich is better in a lot of ways,” says Van Amersfoort, citing the improved walkability in the core and updated gateways to the town along Highway 21 as just a few physical examples. But she believes the most important change may have been a shift in mindset: “The tornado took away the status quo.”

Trial by Fire

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ho f th e

torn

ado

Only a few charred trees on the western outskirts of Slave Lake remain as a reminder that the town, now bustling with new construction, recently lay in ruin.

An arsonist, a spark, a bone-dry landscape and 100 km/h winds all contributed to Canada’s second costliest natural disaster as two wildfires converged on the community on May 14, 2011. 10,000 area residents evacuated to nearby towns or 250 kilometres south to Edmonton and waited as firefighters battled the stubborn flames for two days. One third of the town burned. 502 homes, three churches, 10 businesses and the local government centre were in ashes. In the nearby Sawridge First Nation and surrounding Municipal District of Lesser Slave River, 56 homes and a fire hall were also consumed. “It looked like a war zone,” three-term mayor Karina Pillay-Kinnee recalls. “It was like a bomb had been dropped here.”

Seeing this destruction was especially hard for Pillay-Kinnee, who in recent years had watched her town flourish in its role servicing the resources sector.

The population was young, skilled and wealthy, buoyed by the prosperity of the northern Alberta oil boom. But Slave Lake now needed to catch its breath and the unrelenting pace of the regional economy was poised to pass it by, taking with it any shallow-rooted businesses or residents.

“Our first goal was getting [evacuated] residents back to town within two weeks and then people back to work and back to their lives as soon as possible,” she says, hoping a speedy return to normalcy could thwart any deviation of the town’s recent progressive trajectory. With over 95 per cent of the fire-damaged structures being residential, the main barrier in her way was an extreme and immediate housing shortage. “40 per cent of our RCMP officers, 20 per cent of our firefighters, 30 per cent of our educators, 80 per cent of our physicians and several town Councillors all lost their homes,” Pillay-Kinnee notes. “When this happens, there is a significant reduction in our community’s capacity to continue to work, impacting all residents, not just the ones that lost their homes.”

Displaced from the razed government centre and working in a temporary office, Pillay-Kinnee and the town administration formed a Tri-Council committee with elected officials from the Municipal District and Sawridge First Nation. The committee’s principal outcome was a four-stage rebuilding strategy including disaster recovery, community stabilization, interim housing and a regional recovery plan.

The total price tag: $289 million.

Physical development projects of public assets accounted for approximately $160 million of the budget and included $10 million for site remediation, $30 million to rebuild Town infrastructure and $9 million to grade and service the town’s baseball field to accommodate 245 temporary modular homes being shipped in from Western Canada and the U.S. Residents not housed in the modular homes found alternate accommodation in town with friends or family, bought

a house or condominium instead of rebuilding or moved into the senior lodge.

Pillay-Kinnee admits the town did lose some residents who decided not to return to Slave Lake: “I am going to estimate less than 10 per cent [of the displaced population], but we also had many new families move to our community for work as well.”

Many of those flocking to town were from the building trades that had arrived to help specifically with rapid rebuild. 519 household units were constructed in 2011 and 2012, a 48 per cent increase over the combined number of residential starts in the previous eight years. The value of construction in 2011 and 2012 was $169 million with residential, institutional and commercial construction comprising 79 per cent, 15 per cent and three per cent of the total, respectively.

When examined in a land development context only, the physical rebuild of Slave Lake was adopting the personality of a new subdivision development, just one completely out of scale for a town this size. The challenges faced by the town administration would be less about complexity and more about urgency and capacity.

“Other municipalities [sent] planning personnel to assist with processing the multiple requests for information and development permits in a timely manner,” says Town Recovery Manager Gordon Lundy, also citing cooperation between the Town and insurance companies as a significant factor in keeping the wheels of the rebuilding process greased. “[It was needed] to ensure the properties were ready to commence re-construction at the soonest possible opportunity.” Mayor Pillay-Kinnee echoes the importance of cultivating positive relationships with the insurance companies. “Once the situation was stabilized, our role [as a government] quickly transitioned to one of advocacy and education, helping our residents deal with insurance companies and engaging contractors,”

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A p K

20

In Slave Lake, 95 per cent of fire-damaged structures were residential. In one year, the rapid rebuild saw 519 household units constructed

says Pillay-Kinnee. “I’ve built a home before and it is an incredibly consuming task, but when you are forced to do it, it can be a very stressful situation.”

Much of the stress felt by the municipal administration and residents was absorbed by attentive and compassionate support from Canadians across the nation, the resources sector and the Alberta provincial government, which bankrolled the entire $289 million Tri-Council recovery budget. “The support we received from the Stelmach government was unwavering, they were in constant communication and their expertise was brilliant,” Pillay-Kinnee effuses. “They were always reaching out to make sure we were not disadvantaged at all socially, environmentally or economically.”

The seeds of all the town’s hard work and collaborative partnerships are now starting to bear fruit. Pillay-Kinnee estimates 80 per cent of the town’s damaged areas have been rebuilt including the fire halls in both the industrial neighbourhood of Mitsou Park and the Municipal District. “A lot of apartment complexes are currently going up and more permits for house construction continue to be issued,” she explains (from her office in the new government centre, which also opened in February of this year).

Also in development are several legacy projects including a day care, community hall and theatre complex funded by the Canadian Association of Petroleum Producers; a regional water supply project; and, most notably, an initiative to establish Slave Lake as the province’s first FireSmart model town. “This area has tremendous

AUGUST SEPTEMBER 2013

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potential,” Pillay-Kinnee adds, “and [we want to] leverage dollars that come in to make us a greater service region for the future.” With fire-related construction expected to conclude in 2014, PillayKinnee is pleased with the progress but knows there is still a lot of work to do.

Two years have passed since natural disasters touched Slave Lake and Goderich, and leaders in both communities report recovery is ongoing. Physical rebuilding may subside in the months ahead, but emotional scars will take longer to heal. For both communities, getting to this point has been a challenge whose parameters are defined by who and when, not just what the disasters hit. When these events become pages in a history book, only those affected by disaster will able to judge if or how their communities are better.

Mayor Pillay-Kinnee insists there have been many wisdoms gained along the way in Slave Lake. “We are still learning,” she says. “Disasters and rebuilding from them accentuate and test relationships. Those that are strong become stronger and work well.” Soon, one third of Slave Lake will have been replaced. Thanks to the hard work and strong relationships in the community, with the provincial government and industry, residents will enjoy fresh residential developments, a new government centre and various legacy projects.

In Goderich, Mayor Shewfelt believes the tornado ignited passionate discourse, and getting residents talking about the future will make his town better in the long run. “[In a time when] the Town needed upgrades to Courthouse Park, sewer and water infrastructure, sidewalks and roads, the tornado provided an opportunity for people to come together. We had a process and long-term vision come out of this, and people bought in to making Goderich a better place.” Being known for just beauty is no longer acceptable to the residents of Goderich. The town website now reads “Canada’s Prettiest and Strongest Town.” b

building.ca

13-09-04 11:44 AM

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A new engineering protocol is attempting to provide a framework for assessing and responding to the risk that future climate change may have on the built environment.

By Jeremy Carkner P. Eng., LEED AP BD+C

R

ecent extreme weather events around the globe have generated both awareness and discussion of weather patterns and the effects of climate change. But the notion of climate as what one expects and weather as what is experienced is an important distinction to make in the study of climate risk for the built environment. The performance level of buildings is dictated by how they are able to function within their environment. They are an important infrastructure asset affected by a changing climate and fall within the scope of the Protocol developed in 2009

by Engineers Canada and Natural Resources Canada for climate adaptation. The PIEVC Engineering Protocol, developed by Engineers Canada’s Public Infrastructure Engineering Vulnerability Committee is a tool based on a structured risk assessment process and is used to assess the engineering vulnerability of public infrastructure to climate change. The Protocol has been applied to nearly 30 public infrastructure assets across Canada as well as to infrastructure systems in Costa Rica and Honduras. Case studies implementing the PIEVC protocol cover a broad range of infrastructure categories such as roads, stormwater management systems, dams and buildings, and are intended to identify best engineering practices for climate change adaptation, influence the updating of infrastructure codes and standards, and result in “no regrets adaptation planning” by relevant decision-makers.

The use of the Protocol is a multi-disciplinary, multistakeholder process that uses the collective wisdom and professional judgment of these stakeholders to identify climate-infrastructure interactions and assess the risk associated with each interaction. The experience and judgment of senior practitioners and professionals is required and strengthens the robustness of the risk assessment. With this in mind, the Protocol is a screening level risk tool inAUGUST SEPTEMBER 2013

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tended to identify high, medium and low risks due to the projected climate change. It helps identify where more detailed risk assessment may be required as well as point the way towards immediate actions to adapt the infrastructure to address high risks.

Between 2010 and 2012, Golder Associates and Morrison Hershfield were engaged by Infrastructure Ontario (IO) to apply the Protocol to three buildings in southern Ontario.

This case study added to Engineers Canada’s general body of knowledge for infrastructure assets on which the protocol has been applied, while at the same time enabling IO to evaluate climate risk within a small sampling of their building portfolio.

The selected buildings from IO’s portfolio have contrasting uses, age and building types and included a commercial mid-rise office property in St. Catharines built in 1998, a lowrise regional police headquarters in London built in 1982, and a courthouse, jail and land registry office, which forms a historical complex in Brantford built in 1850.

Objectives of the case study included identifying potential changes in key climate parameters; estimating the probability and effect of significant climate events on building infrastructure; and quantifying risk from these climate events through a vulnerability assessment workshop.

Building components reviewed were distilled to those that are at highest risk of failure, damage and/or deterioration from more frequent severe weather events or significant changes to baseline climate design values. Key outcomes of the case study were recommendations on what remedial action might be necessary to respond to climate change risks at each facility as well as recommendations on possible revisions to building code requirements that would reduce climate vulnerability.

In order to complete the probability assessment required by the Protocol, two data sets were prepared for each build-

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13-09-04 2:18 PM

ing; a local climate and weather data set which identified the historical climate and weather variability that the building experienced from the period from 1971 to 2010 as well as a future climate data set that documents the range of future predictions from a multi-model assessment for a future period from 2041 to 2070. These two data sets provide an indication of how the climate may change and feed into the risk assessment process. Specific climate parameters (e.g., rainfall, snow, wind intensity and associated combinations thereof, freeze-thaw cycles, temperature and humidity) were used to identify trends in broader climate event categories, which were then applied as part of the vulnerability workshop to determine the probability and dynamics of climate and infrastructure interactions. The Protocol assigns a probability score ranging from zero to seven for current and future climate parameters.

Using data gathered during Building Condition Assessments (BCA) including a review of drawings, building maintenance and repair history, a framework for the vulnerability assessment was developed based on guidance from the Protocol. The framework translated to a risk matrix forming the basis for the vulnerability assessment workshop.

The vulnerability assessment workshop enabled participants to understand and evaluate the probability and consequence of climate events affecting each building’s infrastructure components. For this assessment and within the Protocol, probability referred to the likelihood of the event happening based on weather and climate, while consequence or severity referred to the impacts from the specific climate-infrastructure interaction. The Protocol provides

guidance to assign both probability and severity scores through a combination of available data and projections along with professional judgment of the evaluators.

During the workshop, each building was assessed by a different group of project stakeholders and subject matter experts. Selected examples of medium- and high-risk climate-infrastructure interactions included the following: Greater frequency of freeze-thaw cycles resulting in faster brick and stone failure particularly if coupled with higher rainfall; Hotter temperatures and corresponding higher solar gain causing thermal comfort problems and premature glazing failure; Higher precipitation (rain or rain on snow) events resulting in reduced site drainage and flooding; Extreme hot temperatures and humidity overwhelming the capacity of cooling systems to support facility demands; Increased rainfall or snowfall leading to greater water retention on roofs and accelerated membrane degradation; Higher temperatures increasing electrical demand and leading to system outages; and High winds causing damage to electrical transmission and distribution networks.

The overall vulnerability assessment workshop results revealed differences in scoring between the three facilities. The St. Catharines site had the highest range of scores and was the only facility that identified high-risk interactions. The London site identified very few medium-risk and no high-risk

Climate change risk mitigation through adaptation 0

7

14

21

28

35

42

49

6

hazardous

0

6

12

18

24

30

36

42

5

serious

0

5

10

15

20

25

30

35

major

0

4

8

12

16

20

24

28

moderate

0

3

6

9

12

15

18

21

2

minor

0

2

4

6

8

10

12

14

1

measurable

0

1

2

3

4

5

6

7

0

no effect

0

0

0

0

0

0

0

0

negligible

improbable

remote

occasional

moderate

probable

frequent

continuous

5

6

7

4 3

severity

catastrophic

Extreme weather event

Climate change / Development

Adaptation

7

23

probability 0

1

2

3

4

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24 LEFT to RIGHT: OPP Southwest Region HQ, London; Garden City Tower, St. Catharines; Courthouse, Brantford.

scores, but had a large number of low-risk interactions. The historic buildings at the Brantford site identified an almost equal amount of low-risk and medium-risk interactions, consistent with the BCA results on the existing buildings.

As a result of the analysis and risk assessment, recommendations were made to address identified vulnerabilities in each of the buildings categorized under either management action or re-engineering and retrofit. Some recommendations were directly apparent during the vulnerability assessment workshop since key building stakeholders were active participants in this process. The range and type of recommendations varied for each building but generally included near-term and medium-term enhancements to building maintenance and monitoring with a specific focus on high-vulnerability components (e.g., those contributing to or affected by thermal comfort, water penetration, and backup redundancy of critical systems). Re-commissioning of building mechanical systems was also highlighted to ensure effective building operation for both current and future needs under increased climate stress, as well as the use of higher trends for temperature and humidity levels integrated into system replacement design. Follow-up assessments of existing building components and systems were recommended to obtain additional detail pertaining to cladding, roofing, and electrical systems that could potentially be affected by extreme climate events As a means of continuous improvement, one of the mandates of the case study was to subject the Protocol to process-related recommendations arising out of the individual buildings’ analysis. Specific attention was paid to the need for additional guidance to develop improved options to make qualitative assessments within the protocol when numerical assessment was not possible, particularly since quantification of climatic loads and infrastructure capacities can pose a significant challenge. Another important element identified was related to the need for additional guidance on high consequence but low probability climate-infrastructure interactions such as tornadoes and hurricanes, and their related importance to other climate-infrastructure interactions.

A commentary on building code implications was also included as part of the case study’s overall recommendations, with the following elements representing a few examples: 1 While current losses in Canada as a result of hurricane weather are minimal, a higher frequency of extreme thunder storms and hurricanes is expected in Ontario, and therefore a review of the Ontario Building Code’s ability to address the surAUGUST SEPTEMBER 2013

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vivability of our buildings in such events should be conducted.

2 Provincial and National Building Codes that currently con-

tain provisions for energy conservation should track future climate trends to allow them to adapt to the forecasted changes in temperature extremes.

3 Current air leakage, wind resistance, and water penetration ratings for component performance standards should be re-evaluated to accommodate expected greater rainfall and higher frequency of extreme rain events.

4 Changing climates may lead to a change in invasive and potentially damaging insect species, including greater exposure to these species which could then result in significant impact on buildings that were not designed to mitigate these concerns.

The study of climate change and building performance is multi-faceted and requires a broad base of expertise and practical application. The Protocol is focused on enveloping the range of future climate predictions with infrastructure components to identify specific consequences leading to failure, all with a view of encouraging climate adaptation. Engineers Canada has also recently expanded the protocol to include adaptation scenarios and costing via a triple bottom line module that examines and defines social, economic and environmental factors for assessing adaption options.

While the PIEVC protocol has been applied to the design of new infrastructure in two cases (a sewage treatment plant in Nova Scotia and rehabilitation of a bridge in Edmonton), it has not yet been applied to the design of new buildings. As such a case could be made to apply similar thinking to yet-tobe-designed building assets as a means of increasing redundancy and improvJeremy Carkner is a ing resilience within the infrastructure principal at Morrison sector. As with any adaptive process, Hershfield and oversees this entire exercise takes time, effort a team of green building and commitment to move through, and sustainability however the end result provides an efprofessionals in the fective means of addressing the signifiGreater Toronto Area cant challenge of climate change within working on dozens of the built environment. The Protocol is projects relating to LEED, a robust and replicable tool for screensustainability, and ing-level assessments of climate risks building durability. and should be considered for further He can be reached at: application to all building types, providjcarkner@ ing benefit to the wider industry. b morrisonhershfield.com

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25

The

$T

State?

By James Smerdon and David Bell

M

etropolitan centres across Canada are The road is experiencing a retail building boom. historically littered Over 57 million square feet of shopping with the corpses centre leasable area has been added of American since 2007, or an average of almost 11.5 million square feet per year. Over eight retail brands that million square feet of shopping centres attempted to expand were added last year in Canada cominto Canada. But that pared to 15.6 million square feet in the hasn’t stopped the U.S., all while high profile retailers are closing or scaling back stores because of current invasion. a switch to online retail. As Canada welIs Canadian retailing comes more U.S. retail brands, we may at a productivity also be welcoming U.S. retail productivity rates, which are 25 per cent lower tipping point? than Canadian rates on average. Canadian retailers, which have become adept and efficient at the logistical feat of east-west distribution networks, will nevertheless be hard pressed to compete against large U.S. chains with their buying power and smaller north-south distribution networks. Does this mean Canada is facing a retail bubble? building.ca

Caption Ilibus. Cesti in re ditatemqui tempore sed undentia BLD Aug-Sep 2013.indd 25 saperum et explicias andus

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sq. ft.

26

Total leasable shopping centre square foot per capita

25 20 15 10 05 00

US

Canada Austalia Norway UK Finland Germany Mexico Brazil

2000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

2011 2012

Shopping Centre Supply In recent years, much of the discussion has revolved around the disparity between the Canadian and U.S. shopping centre floor area (square feet) per capita. Some reports have even attributed the latest U.S. retailer influx into Canada to the notion that Canada is significantly under-served by its 14.6 SF/cap shopping centre supply compared to 23.8 SF/cap in the U.S. The entrance of new retailers like Marshalls and J. Crew to the Canadian market, and the expansion of retailers like Walmart and Montréal’s Simons have contributed to stable or rising lease rates and stable or declining vacancy rates in regional malls in major markets across the country.

Shopping centre owners and developers have responded, and tens of millions of square feet are being added to the development pipeline. Target’s acquisition of the Zellers leases allowed it to enter Canada with a national presence, but without adding to the national inventory. New inventory including enclosed malls, outlet malls, hybrid centres, mixed-use projects, new neighbourhood convenience shopping centres, expanding centres, and growing high street and free-standing stores need sustained population growth and consumer confidence to maintain low vacancy and cap rates, and strong lease rates.

The chart above shows that over the last decade or more, Canadian and U.S. shopping centre gross leasable area (GLA ) per capita has increased in virtual lockstep. Canada’s shopping centre inventory per capita has been flat since 2010, meaning that population growth has been matched by shopping centre inventory growth. Shopping centre GLA in Canada increased from 505 million square feet in 2011 to The Shops at 513 million square feet in 2012 — a moderate increase of 1.7 Westwood Square in Mississauga, the per cent. During the same period, Canada’s population grew brainchild of Fieldgate by 1.9 per cent according to Statistics Canada. Contrary to Commercial and Plazacorp, is being fears that Canada’s per capita supply of shopping centre billed as the largest space is approaching that of the U.S., the chart shows Canindoor South Asian ada has consistently had 10 SF/cap less shopping mall in Canada

AUGUST SEPTEMBER 2013

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centre supply than the U.S. for the past decade. Globally, no other countries come close to Canadian and American per capita supply levels. If supply growth outpaces demand growth for a sustained period, the implications for shopping centre productivity in Canada would be harmful to the Canadian retail industry.

A drop in Canadian shopping centre productivity from the current $605/SF for non-anchor tenants would not likely concern the average U.S.based shopping mall retailer (the average U.S. shopping centre productivity is approximately $455/SF), provided it was still profitable. However, crossing Canada’s vast, unpopulated areas, incurring higher costs to import goods, paying higher average lease rates and more expensive labour costs add up.

U.S. retailers expecting to add Canada to their network as if they were adding a 51st (and contiguous) state could find themselves at the end of the list that includes Sam’s Club, Marks & Spencer, Kmart and others — successful retailers that have made unsuccessful expansion efforts into Canada.

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U.S. retailers have a lot to gain from entering the Canadian market, provided they understand the logistical, regulatory and real estate challenges that national retail chains in Canada have overcome, all of which are built into the higher productivity rates for retailers north of the border.

Canada’s Shopping Centre Landscape From a supply per capita standpoint, fears of “the Americanization of Canadian retail” are overblown. Canada is producing retail floor area that serves a growing population. International Council of Shopping Centres data showing Canada’s number and total floor area of shopping centres appear to support the notion that much of the recent development in this sector has been neighbourhood/community shopping centres, keeping pace with population growth. Actually, since 2009, Canada’s average shopping centre size has been dropping.

Some of the high-profile shopping centres under development are the largest ones such as Quartier Dix30 in Brossard, Québec (2.7 million square feet), the Seasons of Tuxedo project in Winnipeg (1.5 million square feet) and the Tsawwassen First Nation retail developments (combined 1.8 million square feet) in Metro Vancouver. These projects have super-regional trade areas and serve as destination retail and entertainment centres. By contract, shopping centres with food stores, convenience services and local-serving retail are more abundant, smaller and serve more local areas in residential neighbourhoods. Since 2009, the average new centre added to Canada’s inventory was only 150,000 sq. feet — a far cry from a typical Walmart, Lowe’s or Bass Pro-anchored super-regional mall.

Looking Ahead Canadians should recognize that retail market conditions are not just something that happens to us — we as consumers, developers, builders and retailers are active participants in the retail story that is unfolding. U.S. retailers’ expansion into Canada is a response to some of the healthiest overall retail market conditions in the world. Looking ahead, retail will continue to be one of the most dynamic industries.

Here are some of the factors that will continue to change the face of retailing in Canada: >C anada’s cities have seen strong population growth recently as a result of Canada being a stronger economic and employment generator than the other G8 nations. If the Canadian economy slows while the American, European or Australian economy gains ground, population growth could slow and the current pace of retail development would likely exceed demand growth. The longterm implications of over-building would be lower retail productivity, higher vacancy rates and competitive challenges for Canadian retailers that have built their networks in part based on Canadian sales per square foot productivities. Fortunately, Canada remains one of the most stable countries globally — both in terms of economics and politics — and is a destination for the world’s economic migrants. >T he shift in spending from in-store to online has had a noticeable impact on several high-profile retailers in CanJames Smerdon is vice ada, including Staples and Best Buy. Large format retailers president and Director — and the shopping centre formats that cater specifically to of Retail Consulting, and them — face disproportionately higher impacts from online David Bell is a senior retailers that can offer lower prices, better selection, and inassociate, Planning and creasingly responsive and convenient delivery options. U.S. Retail Consulting for retailers looking to come to Canada quickly may seize Colliers International opportunities to acquire space from retailers that are nain Vancouver. tionalizing their networks. >T arget’s acquisition of the Zellers leases could be a model for other international retailers to enter the Canadian market. Canadian retailers with a national network of properties and/or time remaining on their store leases could be acquired for their real estate value, irrespective of brand or even product similarities. For some retailers, there may be more value in their real estate than in their core business. >P roduct pricing strategies in Canada are more immediate and will ultimately be more influential than increasing floor area supply in changing the look and feel of Canadian retail. As retailers in Canada try to keep Canadian shoppers north of the border by holding Black Friday sales and implementing other discount pricing strategies, the resulting lower retail productivities could disproportionately affect Canadian retailers and eventually lead to softening commercial land values in Canada. b

27

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‘Co’me together ARK believes a community centre’s primary responsibility is to support a community’s wellness, a sentiment illustrated by the integrated experiences within the UJA Federation Community Complex

By Peter Sobchak

Photos by Tom Arban (interior) / Shai Gil (exterior)

Salutogenesis is a term coined in the 1970s by Aaron Antonovsky, an Israeli professor of medical sociology.

A tongue-twister that melds the Latin for “health” (salus) and the Greek for “origin” (genesis), it describes an approach focusing on factors that support human health and well-being, rather than on factors that cause disease. Antonovsky’s theories reject the “traditional medical-model dichotomy separating health and illness,” and instead describe the relationship as a continuous variable, what he called the “health-ease versus dis-ease continuum.”

Supporting health and well-being is clearly at the heart of all healthcare enterprises, but strategies rooted in integration, rather than separation, still seem somewhat innovative to the medical profession, and not immediately embraced. Perhaps, then, it is no surprise that while the rigidly-structured medical world flirts with concepts of integration, it finds a fuller expression in a building type whose name uses a Latin prefix spiritually related to Antonovsky’s etymological progeny: community centre (“co” = together, mutually, jointly).

The UJA Federation Community Complex, by Toronto-based ARK (Architects + Research + Knowledge Inc.), quite remarkably showcases what can be achieved by philosophically grounding a project in the principles of health-promoting community design. Intended to unite and create synergies between a broad array of community-based services including child and health care, sports and recreation, arts and culture, and even community and spirituality, ARK integrated the diverse agencies of the UJA Federation Community Complex within a highly transparent 365,000-sq.-ft., three-storey complex that links four built masses via a pedestrian streetscape.

Central to the design was the desire to support the community from early childhood to old age. The architects achieved this by partnering services (childcare with fitness classes, Mount Sinai Hospital clinical health care with swimming, language classes with art studios, etc.) and designing a high degree of transparency into the buildings. “We felt that the goal of the architecture was to make meaningful connections between the diverse uses,” says ARK principal, Guela Solow-Ruda. “TransparenAUGUST SEPTEMBER 2013

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Since its opening in late 2012, the Complex has garnered attention locally and abroad, and received an award in July in the International Salutogenic Design category at the Design & Health International Academy Awards in Brisbane, Australia.

Culture and Creativity Advice, Care, Support Physical Fitness Celebration and Gathering

cy was the solution: views and vistas between the building and the surrounding neighbourhood, between varying community groups build bonds and create a sense of community that crosses perceived boundaries of age, race or gender.”

It is perhaps surprising to discover that the Complex is located north of Toronto in the suburb of Vaughan, an area not exactly known for ambitious urban integration. However ARK saw the Complex as an opportunity to highlight the power of connectivity through design, and achieves these connections via a design that brings urbanity to suburban Toronto through diversity, while maintaining a contextual scale. Its north/south, east/west pedestrian circulation creates a busy thoroughfare amidst the predominantly glazed buildings in which visitors are sharing in physical, cultural, artistic and spiritual endeavours or utilizing heath and childcare facilities.

Integrating uses wasn’t the only focus of the design. Environmental considerations were central to the urban design concept and cultural identity as well. Increased densities were achieved with a compact infrastructure reducing the overall carbon footprint; shared and diverse programming allows for a reduced demand for parking; and a shared central plant provides a more effective energy system and opportunities to reduce water consumption. Still growing and evolving, work on the Community Complex continues. The upcoming phase of construction is a Performance Box that will bring together performance spaces and workshops in the context of cultural identity. This phase will more-fully establish an urban presence for the Community Complex on Bathurst Street and act as a beacon to the whole site. Not coincidentally, the Complex has been a development catalyst and property prices in the surrounding area have risen sharply since its construction.

Just as Antonovsky’s “salutogenic model” is concerned with the relationship between health, stress, and coping, so too was ARK’s approach to re-define the paradigm of a healthy community with this project. For them, health and wellness are not abstract concepts that should be addressed only when things start to go wrong. Instead, with the aid of architecture, they should and can be woven into the patterns of daily living. b building.ca

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30

V I E W -

Sam Kolias: Success means a commitment to quality

By William J. Ferguson

Boardwalk REIT is focused on the multi-family sector of the market. For Sam Kolias, chairman and CEO, his brother Van, and their team of associates, the guiding principles behind their execution are summed up in the company’s mission statement: “to serve and provide our residents with quality rental communities.”

This commitment to service was instilled in the Kolias brothers from childhood by their father, Gust Kolias, a Greek immigrant who had turned his bricklaying craftsmanship into a successful masonry contracting business. Gust started buying old houses in Calgary, renovating them into triplexes and selling them. After amassing a small portfolio of houses, he leveraged those holdings into small apartment buildings, with his sons providing the general labour and maintenance.

In the process, Sam also exhibited an aptitude for bookkeeping and managing the operations side.

The Boardwalk REIT story began in 1984, when 22-yearold Sam and 17-year-old Van purchased a drab 16-unit walk-up in Calgary using a down payment from savings and a loan guaranteed by their father. 15 of the units were empty and in various states of disrepair. The only occupied apartment was home to the resident manager, an older woman who traded rent for providing a human presence in the building. No matter that the landscaping was overgrown, the grass was knee high, windows broken, and the concrete sidewalk was cracked and heaving, the Kolias brothers saw something beautiful under the grime and disrepair. They went to work renovating the building, focusing on creating the kind of clean, quality environment they would feel comfortable living in themselves. Sam marketed the property, offering reasonable rental rates and personal, friendly customer service. The newly-improved building quickly filled with quality residents.

Within six months, the brothers sold the fully-occupied property to fund their new enterprise and other acquisitions of undervalued properties. As they transformed these properties, Sam and Van realized there was strong demand AUGUST SEPTEMBER 2013

BLD Aug-Sep 2013.indd 30

for well-kept apartment homes, offering friendly service and great value. And so, Boardwalk was born. In 1994, Boardwalk Rental Communities went public on the Alberta Stock Exchange, giving employees an opportunity to own part of the company for just $0.0675 per share. By 2004, Boardwalk had expanded into Eastern Canada and owned and operated properties in Alberta, Saskatchewan, Ontario and Québec.

Kolias converted the company to a REIT. Boardwalk REIT remains more focused on qualitative growth than quantitative growth; the objective is to offer the best quality and service in the market, not be the biggest. The mission is to not only be the friendliest landlord, but also to be a responsible corporate member in the communities in which they operate. Judging by their quarterly report at the end of 2011, the business model is working quite well. Boardwalk REIT’s liquidity balance was in excess of $452 million, comprised of William J. Ferguson is $256 million of cash and $196 million chairman and CEO of from the Trust’s undrawn revolving Ferguson Partners Ltd. credit facility. These are respectable and co-chairman and numbers for someone focused solely on co-CEO of FPL Advisory the multi-family niche in Canada.

Group. The preceding was Neither Sam nor Van takes a salary an excerpt from his new from the Trust. They do not have stock book Market Discipline, options nor are they paid bonuses. 25 The Competitive per cent of the ownership of the comAdvantage: Lessons from pany was distributed among BoardCanada's Real Estate walk’s employees (called “associates”) Leaders, published by the in 1994 for just $0.0675 per share. The REAL Property Association Kolias brothers annually award twenty of Canada (REALpac), $10,000 scholarships to help pay for available at realpac.ca the secondary education of the children of their associates. The core values of work-life balance and serving the community that energize everything Sam Kolias does seems to build better communities and a better company. b

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