Building April May 2009

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URBAN WATERFRONTS REDUX

PLUS: The sale-leaseback comeback

Tenant bankruptcies, Part II Integrating universal design

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Make a Statement.

Be Bold.

Volume 59 Number 2

april/may 2009

Editor

Peter Sobchak Legal Editor

Jeffrey W. Lem Contributors

Stephen Carpenter, Ian MacCulloch, Rhys Phillips, David G. Reiner, Susan Ruptash Art Director

Ellie Robinson Circulation Manager

Beata Olechnowicz Tel: (416) 416-442-5600 ext 3543 Reader Services

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Bruce Creighton Building magazine is published by Business Information Group, a division of BIG magazines LP 12 Concord Place, Suite 800, Toronto, ON M3C 4J2 Tel: (416) 510-6780 Fax: (416) 510-5140 Email: info@building.ca Website: www.building.ca SUBSCRIPTION RATE: Canada: 1 year, $28.95; 2 years, $51.00; 3 years, $62.95. (including G.S.T.) U.S.: 1 year, $36.95 (U.S. funds) Elsewhere: 1 year, $43.95 (U.S. funds).

BACK ISSUES: Back copies are available for $8 for delivery in Canada, $10 US for delivery in U.S.A. and $15 US overseas. Please send prepayment to Building, 12 Concord Place, Suite 800, Toronto, ON M3C 4J2 or order online at www.building.ca For subscription and back issues inquiries please call 416-510-3543, e-mail: circulation@building.ca or go to our website at www.building.ca Please send changes of address to Circulation Department, Building magazine or email to addresses@building.ca NEWSSTAND: For information on Building on newsstands in Canada, call 905-619-6565 Building is indexed in the Canadian Magazine Index

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ISSN 1185-3654

19 Features 11. Legal: Tenant Bankruptcies in the Twenty-First Century: Part II, The Flip Side / What happens when Canada’s landlords go bankrupt? By Jeffrey W. Lem and David G. Reiner 13. Welcome back, Sale-leaseback / The new economic reality of tight credit brings a renaissance to an old real estate strategy. By Ian MacCulloch 15. The Thin Blue Line / Urban waterfronts -- usually huge tracts of underutilized industrial lands just minutes from a downtown core -- offer many Canadian cities an opportunity not only for growth and redevelopment but a chance to redefine themselves. By Rhys Phillips 19. Usable by All / Successfully integrating the principles of universal or inclusive design will help our communities work for all stages of the lifecycle. By Susan Ruptash

Departments 6 Editor’s Notes

9 Upfront

21 Infosource

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Cover image courtesy of WATERFRONToronto Above images courtesy of: WATERFRONToronto, Quadrangle Architects

22 Viewpoint

editor’s notes

The blueing and graying of our cities The English Romantic poet Samuel Taylor Coleridge once famously lamented “Water, water, everywhere.” Clearly the Ancient Mariner did not live in cities, because as the late Norwegian theorist Christian Norberg-Schutz, in his seminal book Genius Loci: Toward a Phenomenology of Architecture, makes abundantly clear, waterfronts inform our “sense of place” and what is built on the waterfront -- from buildings to streets to parks to public art -- influences the architecture and built environment of the rest of a city.

Yet for decades, Toronto has had numerous false starts with redeveloping its waterfront. Over the years, there have been many people with good intentions and ideas about what to do with Toronto’s waterfront -- task forces have been struck and numerous studies have been published -- but not a lot of major redevelopment has taken place. One exception is Harbourfront Centre, Queen’s Quay Terminal and the area around it which were the result of one effort to redevelop the area in the early 1970s.

But to be competitive and to attract residents and the creative workers that are driving economic growth, cities need to offer quality of place, and as Rhys Phillips illustrates in our cover story, cities such as Toronto and Thunder Bay are aggressively trying to leverage waterfront infrastructure projects into a catalyst for

economic and social renewal, because today more than ever there is a real need to use waterfront revitalization to catapult Canadian cities into the kind of place Richard Florida espouses.

But waterfronts aren’t the only gargantuan hurdle Canadian cities must tackle to provide its citizens with quality of space.

Over the next quarter century, the face of Canada will develop deeper wrinkles and grayer hair (forgive the simile). By 2031, there will be more than eight million Canadians over the age of 65. There will also be many more seniors over the age of 85, sufficient to populate the cities of Victoria, Quebec City and St. John’s combined.

How are designers and builders planning to meet the rising demand for aging-in-place lifestyles, and are there lessons to be learned from other countries where the aging phenomenon is further advanced?

There are no quick fixes but the conversation needs to start now to begin forging the partnerships necessary to create agefriendly cities, and in this issue Susan Ruptash, a principal at Toronto-based Quadrangle Architects, discusses how communities can be designed to successfully integrate the principles of universal or inclusive design so that our communities work for all stages of the lifecycle. B

Peter Sobchak

Building welcomes your opinions.

E-mail your comments to editor@building.ca

WATCH Kingston: Marketing brownfields / Michael Lavelle, producer and host of the television series Going Green for Green, explores what methods Kingston used to attract developers interested in brownfield properties.

READ Getting a lease on green / Dr. Mir Ali explains how green leases could be instrumental in measuring and improving the overall performance of sustainable commercial buildings.

ExPLORE AGO Transformed / Finally completed, the newly re-built – at the hands of Frank Gehry — Art Gallery of Ontario has a lot to show off. Take a look inside and out.

ATTEND SIDIM 2009: Montreal International Interior Design Show / May 21-23 / Montreal National Green Builders Products Expo / May 27-29 / Las Vegas, Nevada Transforming and Revitalizing Downtown Summit / June 2-3 / Toronto District Energy: A Made in Canada Solution / June 17-19 / Halifax

Life after the back cover...

what’s on BUILDING.CA

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upfront

Construction is underway on a $30-million mixed-use project called The Tannery, designed by raw Design, which will reinvent an industrial site in downtown Kitchener, Ont.

OAA names raw Design Best Emerging Practice

TORONTO — The new architectural studio raw Design has been awarded the Best Emerging Practice Award by the Ontario Association of Architects (OAA), most notably for their approach to how architecture is practiced, with no hierarchical job distinctions and staff share in all profits. “raw Design demonstrated innovation in all aspects, not just architecture and design but in all aspects of their practice, including their business model, firm structure and even their office layout. raw Design demonstrates a desire to go back to first principles, to question the industry standard and identify a better way of doing things”, says Antonio Gómez-Palacio, founding partner of Office for Urbanism and chair, OAA Best Emerging Practice Award, 2009.

For more information visit www.rawdesign.ca

2009 RAIC Gold Medalists

OTTAWA — The Royal Architectural Institute of Canada (RAIC) has awarded the 2009 RAIC Gold Medal to Vancouver-based architects John Patkau, FRAIC and Patricia Patkau, FRAIC. They founded Patkau Architects in Edmonton in 1979 and relocated to Vancouver in 1984.

Both are Fellows of the Royal Architectural Institute of Canada, Honorary Fellows of the American Institute of Architects and the Royal Institute of British Architects, members of the Royal Canadian Academy of Art, and Members of the Order of Canada.

As part of this recognition, John and Patricia Patkau will be the featured speakers at the Saturday June 20th luncheon during this year’s Festival of Architecture and Forum being held June 17-20, 2009 in Montreal.

Visit www.raic.org for more details.

Commercial real estate vacancies rise

TORONTO — The recession and credit crunch combined led to a rise in commercial real estate vacancy rates across the country in the first quarter of 2009, especially in western Canada, a report from property firm CB Richard Ellis shows. Vacancy rates in both downtown and suburban markets across Canada rose to 7.5 per cent in the first quarter of 2009, up from 6.3 per cent the year before.

The report said net absorption went from 2.6 million square feet to negative two million year-over-year “aided by increased commercial inventory and rising unemployment,” the report said. Sublet space in the quarter increased to 6.3 million from 3.8 million square feet “as more companies nationwide have begun reconsidering their need for underutilized office space.” Calgary showed the biggest year-over-year hike in the quarter with a vacancy rate of 8.1 per cent, or nearly double from 4.3 per cent for the same quarter last year. Sliding energy prices have meant less demand for office space in the oil company capital, the report said.

Vacancy rates in Vancouver rose to 7.3 per cent from six per cent year-over-year, Toronto rose to 7.7 per cent from 6.8 per cent and Ottawa’s rates rose to 5.1 per cent from 4.9 per cent.

Montreal vacancy rates remained the highest at 8.8 per cent, up from 7.9 per cent last year.

Visit www.cbre.ca for more information.

CaGBC introduces LEED Canada for Homes

VAUGHAN, Ont. — After a year of working with a committee of green builders, technical experts, and other industry stakeholders to adapt the U.S. Green Building Council’s LEED for Homes program, the Canada Green Building Council (CaGBC) has launched, simultaneously in Ontario and Quebec, a version that fits with Canadian building codes and climates.

The group used a Case Study program to gain concrete examples on how to best adapt the U.S. version for Canada, enrolling over 400 homes from 50 participating builders across the country. For a new home to gain the new LEED Canada for Homes certification, it must achieve performance measures in eight categories: Innovation & Design Process (ID); Location & Linkages (LL); Sustainable Sites (SS); Water Efficiency (WE); Energy & Atmosphere (EA).

For more information visit www.cagbc.org building

april/may 2009

First full-service Canadian hospital gets the “green” treatment

FREDERICTON, N.B. — The Upper River Valley Hospital (URVH) in Waterville, N.B. has become the first fullservice hospital in Canada to be LEED certified. The 70bed URVH achieved LEED Silver certification by improving indoor environments, particularly air quality, and minimizing the impact of hospital construction and operation on the local air and water quality. To achieve this, New Brunswick Department of Supply and Services worked with LEED consultant Enermodal Engineering and Frederictonbased architectural firm ADI Limited to select materials that do not add volatile organic compounds and urea formaldehyde to the indoor air. Low-emitting materials include adhesives, sealants, laminate adhesives, and wood composites. Natural linoleum flooring was selected whenever

possible, and low-emitting carpet was selected where carpet was functionally required. Also, regional and recycled materials were used in construction whenever possible.

To minimize the impact on the surrounding environment, URVH was designed to consume 34 per cent less energy than a similar building. Measures include, among other things, a thermally enhanced building envelope (walls, roof, and windows), efficient lighting design with extensive use of occupancy sensors, high efficiency boiler and chiller plants, and energy recovery wheels to precondition the ventilation air. Also, a cistern collects rooftop rainwater for use in toilet flushing and mechanical systems. It is estimated that the cistern, together with water-conserving urinals, toilets, faucets and showerheads, reduces the quantity of potable water consumed annually by at least 56 per cent.

For more information visit www.enermodal.com

mailbox

Oops…

I found David Lasker’s article regarding the recent expansion of the AGO (Building, February/March, 2009) both courageous and “on the money.” I think it is a case of the emperor having no clothes. Many of the beautiful spaces in the building have been brutally altered, to say nothing about the degradation of the Grange. For the record though, I do want to say that John Parkin had the idea that school buses and tour groups would enter the building from a lower level access, and that his “grand stair” would connect that access to the principal or formal entry to the gallery; and while it is true that the washrooms were (are?) at this level, so too was art rental, children’s reception and orientation, cafeteria, etc. Parkin’s idea may have been flawed, but it was an era of endeavouring to cultivate and accommodate school and group tours to enhance gallery attendance, and it was his thought that this traffic had to be taken off Dundas Street and somehow accepted on site.

L. Frederick Valentine, RCA, FRAIC Principal Stantec I work for Barton Myers and a copy of David Lasker’s piece on Frank Gehry’s do on the AGO was posted in the office. This may sound like some loyal support for Barton, but it is not. It is more a critique of the indifference of an architect for another architect’s work. For starters, I recall how Gehry cried about the Anshen & Allen addition to Kahn’s Salk Institute, which in fact, was not an addition, but a separate building. No modifications to the original building were made. One can argue that Myers is not Kahn, but he is one of today’s recognized architects of note, substance or importance, whichever fits. Gehry has argued that he only did what the client wanted. Wasn’t this Eichman’s excuse? I believe Mr. Gehry has brought shame to our profession.

David Karp, AIA Associate Barton Myers Associates Inc.

10 building

april/may 2009

In the December 2008January 2009 issue the members of Team 15 from Ryerson University who participated in the World House Costa Rica design charette were incorrectly listed. The members of Team 15 include: Jordan Dawson, Steven Hoang, Jordan Matchett, Araz Piroozfard, and Melody Taghi-Poor. We regret the error.

legal

By Jeffrey W. Lem and david G. reiner

Tenant Bankruptcies in the Twenty-First Century: Part II, The Flip Side

What happens when Canada’s landlords go bankrupt?

In Part I of the series on tenant bankruptcies (Building, February/ March 2009) , we discussed the landlord’s preferred claim against a bankrupt tenant. This article considers briefly the opposite issue of what happens when Canada’s landlords go bankrupt.

The abrupt flip to the landlord side of the equation was spurred, in part, by the plight of General Growth Properties, the second largest shopping mall owner in the United States, which filed for bankruptcy protection in April. Of course, you wouldn’t know it from walking into one of its malls. Why is it that when a tenant goes bankrupt, the lights go off but nothing seems to change when a landlord suffers the same fate? The answer lies in the nature of real estate financing.

Owners of shopping centres (indeed, owners of all income producing properties) typically finance by way of mortgages.

They may be gussied-up as sophisticated bond financings or other exotica, but lenders to the real estate industry are invariably secured creditors under the Bankruptcy and Insolvency Act. As a general statement, secured creditors might be delayed by insolvency proceedings, but will not ultimately be prevented pursuing their foreclosure, power of sale, and possession rights and remedies (although all of these remedies are quite distinct from one another, they are referred to in this article collectively as “foreclosure”). A bankruptcy of the landlord rarely results in the shuttering of an income producing property or any particular tenant in such property. Here’s why.

While trite, a lease is best understood as a contract between a landlord and a tenant. As against the landlord, the tenant can expect to retain possession of the premises for the whole term of the lease so long as it pays its rent regularly to the landlord and observes the conditions and provisos described in the lease.

At common law, what happens to that lease if the landlord’s mortgage lender forecloses depends totally on when the mortgage financing is put in place vis-à-vis the date of the lease. If the mortgage financing precedes the lease, then, on any foreclosure, the mortgage lender is entitled to ignore the lease and evict the tenant. What many landlords and tenants forget is that, at common law, if the mortgage financing preceded the lease, then on any foreclosure, the tenant is also entitled to ignore the lease and can legally walk away from the premises and all of its rent obligations under the lease! The exercise of this “flight right” is precisely what happened in Goodyear v. Burnhamthorpe, the leading Ontario case in point which saw Goodyear walk away from millions of dollars of over-market office rents in Toronto when its landlord’s mortgage lender made the strategic error of foreclosing against the landlord.

These reciprocal eviction and walk-away rights do not exist, however, when the lease comes ahead of the mortgage financing, but this is actually quite rare. Most leases require the tenant to “subordinate” to any mortgage lender with whom the landlord may from time to time finance. Furthermore, most mortgage lenders force their landlord borrowers to enforce such subordination obligations against all major tenants at the time of a financing or re-financing, so it is rare to find anything other than perhaps a long term ground lease, where the lease actually comes ahead of the mortgage financing.

So, if mortgage financings almost always precede leases (or at least achieve such priority because existing tenants are forced to subordinate to the mortgage lending), does that mean that all mortgaged properties are at risk of mass eviction/abandonment every time a landlord declares bankruptcy or a mortgage lender

Jeffrey W. Lem, B.Comm. (U of T), LL.B. (Osgoode), LL.M. (Osgoode), practises in the areas of commercial real estate and finance with the law firm of Davies Ward Phillips & Vineberg LLP, and has been called to the bar in Ontario, England and Wales. He is an executive member of the Real Property Section of the Ontario Bar Association and is editor-in-chief of the Real Property Reports, published

by Carswell Thomson Professional Publishing.

David G. Reiner, B.Comm. (Concordia), LL.B. (Osgoode) is an associate practising in the area of commercial real estate at Davies Ward Phillips & Vineberg LLP and is called to the Bar in Ontario.

This article provides general information only and is not intended to provide specific legal advice.

Readers should not act or rely on information in this article without seeking specific legal advice on their particular fact situations. building

april/may 2009

11

legal

forces the issue by foreclosing? As General Growth Properties’ situation currently demonstrates, the answer is “no”. This is because the common law priority rules are often contractually abrogated through the use of a specific contract between most major tenants and mortgage lenders.

This contract, a “Subordination, Non-Disturbance and Attornment agreement,” almost universally known as simply a “Non-Disturbance Agreement” or (more commonly by American mortgage lenders and tenants) by its acronym, the “SNDA,” replaces the volatile common law eviction powers and flight rights with a more orderly and commercially reasonable arrangement governing mortgage lenders and tenants in the case of landlord foreclosures.

The SNDA is an agreement between the tenant and the mortgage lender pursuant to which the parties acknowledge that the mortgage precedes the lease (regardless of when the mortgage and lease are actually registered). The SNDA then requires the mortgage lender to agree not to “disturb” (i.e., not to evict) the tenant, even if the landlord is bankrupt and/or the mortgage lender is otherwise entitled to foreclose. In exchange for this concession, the tenant typically also waives its “flight right” by agreeing to “attorn” (i.e., agreeing to recognize the mortgage lender or new purchaser under power of sale as its landlord and paying all future rents accordingly).

It is rare to find any modern leased-up buildings with financing that do not also have SNDAs governing the relationship between the major tenants of that building and the building’s

What many landlords and tenants forget is that, at common law, if the mortgage financing preceded the lease, then on any foreclosure, the tenant is also entitled to ignore the lease and can legally walk away from the premises and all of its rent obligations under the lease! owners’ mortgage lenders. With the mortgage lender agreeing not to disturb and the major tenants all agreeing to attorn, most landlord bankruptcies and/or mortgage lender foreclosures are really “much ado about nothing” as far as mass shutterings or other public disruptions are concerned.

The General Growth Properties bankruptcy is but one example of this commercial stalemate. Presumably because SNDAs are in place throughout the portfolio, major tenants cannot abandon the malls just because mortgage lenders are foreclosing, nor can such foreclosing mortgage lenders evict the major tenants. There will no doubt be other examples, both in the United States in Canada, as this recession worsens and landlords face lots of maturing mortgages with no take-out financing in sight! B

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Welcome back, sale-leaseback

By Ian MacCulloch

The new economic reality of tight credit brings a renaissance to an old real estate strategy

As the global financial crisis continues to linger and lending capital becomes challenging for many businesses that are feeling the economic pressure, a sale-leaseback strategy of the company’s real estate asset(s) might be the most viable — and sometimes the only — solution for Canadian companies looking for a creative solution to redeploy capital.

The sale-leaseback is a strategy that can help maximize the deployment of assets for many operating businesses. In this type of transaction the business owner sells their property to an investor and remains as a tenant, typically through a lease agreement of 10 or 20 years.

For an operating business that has acquired real estate during the course

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TM

of its evolution, the value of those assets may have become substantial and the upside through unlocking that equity can be quite compelling. Some of the potential benefits of a saleleaseback include: 1. Unlocking equity that can be used to reduce debt.

2. Redeploying equity from real estate into the core business, allowing for expansion or re-investment.

3. Property lease payments are a deductible operating expense.

4. Operations remain in place with no disruption to employees, suppliers or customers.

5. A strengthened financial picture by moving a fixed asset — that is likely carried below market — off the balance sheet and replacing it with cash.

Assessing the opportunity Before going too far down the road it is important to perform an assessment of the opportunity by reviewing the marketability of the real estate asset, and the strength of the financial covenant a company can provide on its Lease. The very motivation to undertake a sale-leaseback — raising capital in a tight credit environment — may also make the transaction more challenging. The underwriting of the financing for the buyer will require a stronger lease covenant today than was required when credit flowed more freely. It is expected that some will come to the party a little late, as some of those needing to unlock the equity in the real estate asset, due to other business challenges that they are facing, may no longer be viewed as financially strong enough to meet the covenant requirements.

The real estate asset should be well located for its purpose, functional by today’s standards and well maintained. In simple terms, it needs to be marketable in the future to prospective tenants or purchasers as a part of the acquirer’s investment strategy.

As mentioned, the lease covenant provided by business is the next major component. The financial strength and track record of the operating business, without the real estate asset on the balance sheet, will need to be healthy enough to provide comfort to both the potential purchaser, and the financial entity that underwrites the loan for acquisition.

In today’s economic environment there are two forces at play that make the sale-leaseback worthy of consideration and prompting business owners to entertain the sale-leaseback approach: (1) Challenging lending conditions for businesses wishing to finance expansion or re-investment into their core businesses and; (2) Demographic shifts that see many baby boomers who own small-to-medium sized businesses looking for strategies to capitalize on the value of their company as they prepare to exit the workforce.

14 building

april/may 2009

1) Challenging lending conditions The global financial crisis is restricting the availability of credit for real estate, equipment and other commercial loans.

Companies that require immediate capital may determine that the equity tied up in a real estate asset could produce a higher return if invested into the business. This is where a sale-leaseback can be an excellent approach. It allows the organization to extract capital from real estate, and redeploy it where needed, while creating zero disruption for operations and allowing employees to remain in place.

2) Demographic shifts and the exit of baby-boomers Demographics tell us that many business owners are currently in the process of engineering their exit from the workforce. A sale-leaseback can work well for those that wish to maintain ownership of the business, but want to monetize the value built up in their real estate, as part of their retirement fund. For business owners looking to dispose of their business and real estate, many are bundling them as package deals. This approach warrants careful review, as it is important to have a current market value of your real estate and a separate valuation for the operating business, to ensure full value is realized for both.

Further to having separate valuations, it’s important to maximize the value of the real estate through market timing. In the case where it has been determined that the real estate market is soft, and when the equity is not needed immediately, there is an upside to riding out a soft market and selling in healthier conditions. In a scenario where the business is sold and the real estate retained, a further consideration is whether the acquirer of the business is substantially larger than the seller, and if it brings financial strength to the lease covenant. If this is the case, a derivative of the sale-leaseback can be effective, where the acquirer becomes the tenant in the lease-back and by virtue of their strong covenant, add value to the real estate. In this scenario when the time comes for a sale of the real estate it will likely be both easier to execute and attract a higher price.

The ebb and flow of both financial and real estate markets will dictate strategy and timing, as well as warrant in-depth analysis for each asset in the context of its market and timing of the transaction. Like all major financial and legal transactions, this should be reviewed with tax and legal experts, as well as real estate advisors to ensure it is a prudent and is strategically sound approach for your unique business situation. B Ian MacCulloch is the Canadian Vice President of Research with Colliers International and is based in Toronto. He can be reached at ian.macculloch@colliers.com

U r b a n wa t e r f ro n t s — u s u a l ly h u g e t r a c t s o f u n d e rutilized industrial lands just minutes f r o m a d o w n t o w n c o r e — offer many Canadian cities an opportunity not only for growth and redevelopment b u t a ch a n c e t o r e d e f i n e themselves.

Water runs deep in the human psyche, and few Canadian metropolises are not profoundly influenced by their relationship to water, whether an ocean, lake or river. Even in Regina, the only provincial capital not built astride a major waterway, Saskatchewan’s legislature building sits beside a large artificial lake.

This being said, the modern industrial age posited a regrettable ideology of moving away from the natural world. As a consequence, much of our city life lost its close relationship to their waterfronts. Even ancient gathering places like The Forks in Winnipeg became inhospitable industrial sites or working ports that discouraged casual contact with the water’s edge. As early as the 1950s efforts were made to restore some shorelines, frequently as linear parks that emphasized access over any form of built engagement. The result was often a new “barrier” of unfocused openness.

Two Ontario cities at opposite ends of the size spectrum,

Thunder Bay and Toronto, are currently undertaking major waterfront-centred initiatives, both with an eye on tapping into the emerging knowledge-based economy.

THUNDER BAY Thunder Bay is a small, geographically isolated and historically resource-based city with only 122,000 in its metropolitan region. But as Katherine Dugmore, the city’s Waterfront Project Manager ruefully states, it has been less traumatized by the current economic downturn because northern Ontario has been in perpetual recession for years. Economic uncertainty notwithstanding, the Lakehead city is grounding its future on a savvy understanding of Richard Florida’s economy of the creativity imperative, with increasingly successful efforts to establish or attract such enterprises.

For example, the Paleo-DNA Laboratory at Lakehead University was the first Canadian laboratory to develop mitochondrial DNA

The thin blue line

By Rhys Phillips

© Thunder Bay Historical Museum Society

Image courtesy of City of Thunder Bay

Above: Thunder Bay’s waterfront as it looked during its industrialized heyday. Above right: Phase one of the waterfront’s redevelopment is Prince Arthur’s Landing Marina Park. building

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15

analysis techniques and is the only facility in the world that trains in the extraction, amplification, sequencing and analysis of ancient nucleic acids (aDNA). The Lake Superior Centre for Regenerative Medicine and the recently established Molecular Medicine Research Centre, the latter in conjunction with the medical technology firm Philips Medical Systems, represents the type of “triple helix” partnerships — government, university and business — that has made Helsinki, Finland so successful. The NWO Innovation Centre at Lakehead University plays an important role in this process while the Northwestern Ontario Technology Centre provides a state-of-the-art, fibre optic equipped incubation facility designed to nurture high tech businesses.

But what does this have to do with the city’s plans to develop its waterfront? Quite a lot, states Dugmore. As Florida maintains, “creative people don’t just cluster where the jobs are. They cluster in places that are centres of creativity and also where they like to live.”

The requirement for Thunder Bay, she continues, is to create a built environment that can engage the output of highly trained graduates from Lakehead University and Confederation College as well as attract similarly creative outsiders looking for a mix of a vibrant urban lifestyle, excellent natural environment and small town intimacy.

Like most port cities, the waterfront of Port Albert (amalgamated with Fort William in 1970) was a heavily industrialized site of manufacturing, grain elevators, shipping piers and warehouses.

During the 1960s and ‘70s, a significant section was converted to linear parkland with three piers transformed into a recreational marina. By 1998, however, community groups were advocating a less passive year-round approach. In 2006 the city endorsed a Highest and Best use Study for Marina Park prepared by O&Y Enterprise Real Estate Services that called for an expanded park program but also recommended a new urban village to extend the built core onto the waterfront.

This was followed by the development of a Master Site Plan and Urban Design, Guidelines, prepared by Toronto’s Brook McIlroy Planning and Urban Design/Architects with MSAi Architects, Urban Marketing Collaborative and Noel Harding Studio and approved in 2007. The guidelines preserve and upgrade existing parkland and the festival site on the northeast side of the 35 acre site. A new, larger marina on the site’s southwest side will eventually emerge between Spirit Centre Head, an existing isthmus, and proposed elaborate park and cruise ship pier on decommissioned Pool 6 industrial lands. The plan calls for the redevelopment and greening of the existing piers as well as the introduction of public art, outdoor furniture and signature lighting.

The most significant intervention, bracketed by these parks, is Port Arthur’s Landing, a mixed-use village connected to the existing business and entertainment district by Red River Road and Pearl Street. “While we wanted very animated destination spaces, we also wanted more than the ‘festival square’ model pioneered by Baltimore,” says Dugmore. “We wanted people living and even working in a new community.” Thus negotiations are currently underway with Man-Shield Construction to develop three seven storey, stepped back towers — two condominiums and a hotel — which will add 104 residential units and 106 hotel suites.

To the towers’ east, the development group will renovate

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Thunder Bay’s designated CPR train station into a restaurant and spa overlooking a multi-use farmer market square and waterfront plaza.

An artisan retail building beside a canal-like set of pools will also be built and operated by the developers as part of the $60 million project.

The new community will link to the north with Thunder Bay’s first “skyscraper,” the eight storey neo-Gothic Whalen building (1913) which has now been adapted to house technology and other knowledge-based industries. According to Ian Ross in Northern Ontario Business (September, 2008), the objective is to create “a modern business and education corridor amidst a fine collection of heritage buildings along Cumberland Street and Red River Road.” In addition to the Magnus Theatre, the city’s successful performing arts centre, the area already houses biotechnology and health sciences companies while the university is converting the heritage Port Arthur Collegiate Institute into its law school.

This emerging knowledge-industry and entertainment quarter, once linked with its re-energized, year-round waterfront will be a vibrant urban component centring a spectacular 53 kilometre shoreline comprising picturesque islands, wetlands teeming with wildlife and diverse river estuaries.

TORONTO Toronto’s waterfront has a checkered history over the last three decades. During the wide open development years of the ‘80s and ‘90s, improved public access and the innovative Plant Gallery were literally overshadowed by countless architecturally banal condo and business towers with limited urban design sensibility.

Bottom left: The Central Boardwalk is a small part of a much larger vision for Toronto’s waterfront rebirth. Left: A WaveDeck at the foot of Simcoe Street and a neighboring one at the Rees Street slip are under construction with completion scheduled for summer 2009.

process, implementation is well on the way. Despite the area’s environmental toxicity — an issue that in part aborted the 7,000 unit Ataratiri housing project proposed in the 1990s — the Ontario Brownfields Statute Law Amendment Act of 2004 now permits the required level of contaminate clean-up to be mediated by the specific use intended for the site.

East Bayfront Throughout this time, the city’s central waterfront eschewed the type of dense but well-scaled urban fabric that flourished during the city’s brief urban laboratory heyday in the 1970s.

Since 2001, however, the tripartite Toronto Waterfront Revitalization Corporation (WATERFRONToronto), governed by a 12-member Board of Directors appointed by the federal, provincial and city governments, is accomplishing what for decades seemed impossible. It is repairing Toronto’s damaged core waterfront while pushing ahead with the transformation of the toxic brownfields stretching east to the much-abused mouth of the Don River. The strategy started with a transformation of the waters edge in the developed core area with the 2006 international competition-winning proposal of the Dutch and Toronto consortium of West 8 + DTAH to knit together the frayed central waterfront. A 3.5 kilometre-long boardwalk is taking shape that includes five “wavedecks” at major points “where the city kisses the lake.” Development is also well underway on three sustainable, fully mixed-use urban quarters laced with parks, wetlands and naturalized buffers, public squares endowed with art, educational and cultural institutions and bountiful access to the water, all served by layers of public transit and a dynamic street-based life.

The vision is huge, constituting one of the largest such projects in North America. Almost 800 hectares along the protected waters of Toronto’s inner harbour will be developed over the next 25 years. The projection is for 40,000 new residences, 40,000 new jobs and 300 hectares of parks and public spaces costing an estimated $17 billion in investment including a not-unreasonable $1.5 billion of government funding. “The result,” states WATERFRONToronto, “will be a dynamic and integrated series of 21st century showcase waterfront communities” that will strengthen Toronto’s reputation as a global city focused on knowledge-based industries, world class research facilities and a superior quality of life. It is a promise made numerous times before but it may well be on track this time to happen.

Plans for the three eastern harbour sites envisage the creation of significant but well-scaled, design conscious, water oriented and mixed-use (and income) urban communities built to LEED Gold standards. With both substantial direction from WATERFRONToronto and an exhaustive public consultation

The East Bayfront community is just south of the elevated Gardner Expressway and Toronto’s historic St. Lawrence Market neighbourhood and stretches 22 hectares along the waterfront.

Once completed (urban plan by Koetter Kim & Associates with Phillips Farevaag Smallenberg, BA Group, LEA Consulting, GHK Sustainable Edge), East Bayfront will accommodate 6,000 residential units (including 1,000 affordable units), 8,000 jobs and an unbroken 1.5 kilometre water’s edge promenade.

Sherbourne Park, part of the area’s 5.5 hectares of parks and squares, will cleave the site while Sugar Beach, to be designed by Montreal’s Claude Cormier Architectes Paysagistes, will mark the west boundary on Jarvis Slip. Contrary to the inhospitably-scaled architecture along the core waterfront, buildings will be scaled down as they approach the water’s edge.

WATERFRONToronto, following Helsinki’s development model, makes no bones about the fact that 50 per cent of East Bayfront lands are in public hands. The intent is to ensure that development partnerships that emerge result in a built environment that integrates a full range of commercial and residential uses, a light rail transportation system, architectural excellence and an extensive open space network. Of the three publiclyowned parcels — Bayside, Parkside, and Dockside — Dockside is under construction. First Waterfront Place, slated to be home to the Toronto Economic Development Corporation, is an indication of the quality architecture sought. In addition, George Brown College’s Centre of Health Scie nces, designed by Bruce Kuwabara of Toronto-based KPMB Architects, together with Stantec Architecture, will start construction in 2010.

Lower Don Lands East of Bayfront lies the tortured estuary of the Don River, now reduced to the industrialized Keating channel. In 2007, the entry titled Port Lands Estuary by Boston landscape architect Michael Van Valkenburgh Associates (MVVA TEAM) was selected as the model for the reconstruction and naturalization of the river’s channel. The plan calls for four well-scaled, mixed-use communities separated by the river, flood planes/open spaces and the channel which will be adapted as an urban waterside gathering building

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17

Images courtesy of WATERFRONTornto

Above: Designed by Phillips Farevaag Smallenberg of Vancouver, the south portion of Sherbourne Park will feature an open lawn area while the north portion will include a children’s playground and seating areas. Right: The 80-acre West Don Lands district (the same size as London’s Canary Warf) runs from Parliament Street to the Don River, and from King Street down to the rail corridor.

place. “The Lower Don Lands” reports WATERFRONToronto, “will be transformed from port to sustainable ‘green’ city; a new type of territory where city, lake, and river interact in a dynamic and balanced relationship — an urban estuary.”

In April 2008, work began on the extensive environmental assessments required by the Ontario Environmental Assessment Act and the Planning Act. At the same time, however, widespread public consultations have been taking place on all aspects of the proposed development. This spring, further stakeholder consultations will take place with the recommended Precinct Plan, Infrastructure Class EA Master Plan and Zoning By-Law plan tabled to council in fall 2009.

West Don Lands North of the Lower Don Lands, the West Don Lands is a 32hectare industrial site stretching from Parliament Street and the historic Distillery District on the west to the Don River on the east.

Originally public parkland for the Town of York (1793), the site was industrialized in the 1830s, and partially detoxified in the 1990s.

Since 1996, the provincial government has owned most of the land and in 2005 the city of Toronto formally approved the West Don Lands Precinct Plan. Work has already advanced on the signature 7.4-hectare Don River Park that will suture the community to the river as well as provide a required flood protection berm.

Once fully built out over the next 12 years, an estimated $2 billion investment (of which approximately $250 million is public) will provide 5,800 residential units, including 1,200 units of affordable rental housing as well as one million square feet of employment space. Similar to the Dutch term woonerf, meaning ‘living street’ (an approach increasingly common in Europe), a tight, moderately scaled urban typology will be augmented by pedestrian-oriented streets that erase the standard boundary between sidewalk and street.

The first of four phases of West Don Lands development

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includes flood protection work, Don River Park, the River Square Neighbourhood and the construction of phase one starting in 2010. The selection of Toronto’s Urban Capital Property Group and Dublin, Ireland’s Redquartz Development as developers, along with Montreal’s Saucier et Perrotte Architectes and Toronto’s ZAS Architects as the project designers, suggests something innovative. If Urban Capital was the first developer of new(ish) industrial lofts in Toronto, Saucier and Perrotte are arguably Canada’s most evocative architects, while ZAS is the competition winner for the spectacular Water Front project in Dubai (Building, August-September 2008). WATERFRONToronto has also selected renowned New York architect Steven Holl to design the community’s District Energy Centre.

After a 30 year hiatus, Toronto may be on the verge of once again demonstrating that it can be a world trendsetter in building a fine grained, liveable metropolis, and join the ranks of global waterfront cities such as London, Paris, New York, San Francisco or Barcelona.

Visit www.building.ca for an expanded version of this story, including a look at how Halifax is implementing downtown waterfront plans, and the first phase of the four-kilometre Calgary Riverwalk project.

B

Usable by all We are all temporarily abled. As we age, our strength, reach and flexibility diminish. Our visual acuity changes, we require higher lighting levels and become more sensitive to glare. Our hearing fades.

Our memory is not as acute as it once was. Therefore, it makes good common sense to design our cities and our buildings using the principles of universal design – loosely defined as the design of products and environments to be usable by all people, to the greatest extent possible, without the need for adaptation or specialized design — so that the built environment does not impede us, at any age, as we move about our day. It’s also good business sense to integrate these principles at the very beginning of the architectural and planning process, which is far more cost effective than undertaking disruptive and expensive renovations at a later date.

Canadians are living longer than ever, and the majority of the population is made up of baby-boomers born between the years 1946 and 1964. People from this generation are increasingly choosing to stay in their own houses, apartments and condos instead of moving into retirement or long-term care facilities.

Where possible, they want to stay in the communities they call home, rather than move out to a facility in the suburbs.

When choosing a home, boomers are looking for adaptable, accessible, human-centred design that is great now with flexibility for later. During the conceptual design phases of these homes, project designers can lay the foundation for an inclusive environment. Elements such as wider hallways to allow for the eventual need for walkers and wheelchairs; levers instead of knobs so that arthritic hands will still be able to open doors; windows that are large with low sills so that wheelchair users can admire the views outside; the use of plywood behind bathroom tiles so that grab Above: An elevated front porch for St. Lawrence Neighbourhood Seniors Non-Profit Housing in Toronto gives elderly residents a transitional space to safely be part of the streetscape.

Successfully integrating the principles of universal or inclusive design will help our communities work for all stages of the lifecycle.

By Susan Ruptash

bars can be installed easily if and when required; reachable thermostats with a readable font; floor finishes that are flat and level and non-slip so you can walk, roll and shuffle on them — these design fundamentals can be incorporated from the start of a project without any hint of an institutional look.

Many people still believe that this is special-interest design, for only a tiny percentage of the population, and that it’s too expensive.

That is simply not true. Great universal design should be expanded to consider the needs of a great range of people. Quadrangle Architects has designed several residences for older people where universal design was incorporated from the start of the design process. St. Lawrence Neighbourhood Seniors Non-Profit Housing, for example, forms part of a residential block near Church Street and The Esplanade in downtown Toronto. In this particular case, the needs of the elderly were a primary design consideration to ensure that residents could age in place while at the same time creating a building and surroundings that fit nicely in the busy urban fabric of the St. Lawrence Market neighbourhood. Suites were tailored for the needs of those residents with limited mobility and disabilities.

A front porch was created by elevating the street entrance above the sidewalk, allowing a transitional area where residents can enjoy the street life while remaining safely separated from the vehicular and pedestrian traffic at this very busy intersection.

Another life-lease seniors’ community project, Woodside Mews in Oakville, Ont., won an Urban Design Award of Distinction for demonstrating how creativity in design can contribute to the success of a project both for the residents and for the nearby neighbourhood. Surrounded by a library, a school, semi-detached seniors’ rental homes and single-family houses, input from the local residents led to a number of design directives that helped shape the project, and in return the introduction of the mews helped create a human scale on this dense property. The semidetached units were designed so that each pair of units mirrored building

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At Woodside Mews, a life-lease community for the elderly in Oakville, Ont., houses have design features such as at-grade entries that allow seniors to age in place.

the size and scale of the nearby homes. Although a single point serving an internal street system supplies access to the project, units along public streets were turned to address the street.

Driveways and garages were located at the rear of the units to be dedicated to the residents. Front doors, porches, individual garden areas and a system of landscaped walkways create the feeling of a much larger site and offer a welcome respite from the hard surfaces of the driveways. Equally important was that the interior and exterior design supports aging in place.

Not just a house, but a city, too The urban fabric of our communities must also address the principles of universal design. This includes considering age-friendly elements such as safe curb-cuts that don’t fill up with snow and ice in the winter, visual and audible traffic signals and alternate “fast and slow” pedestrian crossing signals that will give older and disabled persons enough time to safely cross the road. Good wayfinding and signage can make a critical difference in the ability for someone to safely get where they’re going. Other initiatives for agefriendly communities include more strategically placed benches, slopes and ramps instead of stairs where possible, more thoughtful placement of trash and recycling receptacles that allow freer pedestrian movement, and more and better access to public transit.

The past decade has seen a huge intensification in the number of people living in the downtown core which leads to an increased volume of pedestrians, scooters, baby strollers and bicycles. In dealing with that for older persons, we’re dealing with that for everyone. It’s yet another example of an integrated way of thinking about design. We can do better. European cities have led the charge in renovating and planning entire towns and cities with universal access as the catalyst. 24 countries belong to the European Concept for Accessibility, an umbrella organization founded in 2003 whose philosophy for accessibility, according to its website, is “the recognition, acceptance and fostering — at all levels in society — of the rights of all human beings, including people with activity limitations. Accessibility for all is an essential attribute of a ‘person-centred’ sustainable built environment.”

Various cities are launching comparable initiatives that focus on including barrier-free design at the outset of planning as a matter of course, for example Berlin with Barrier-Free Berlin,

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and Dublin with Access Matters, both of which are examples of what can be achieved when city government, businesses and citizens work together to make their city better. “Cities need to be conscious of the importance of ensuring access for citizens of all ages, abilities and circumstances. Accessibility is important from a social justice and an economic competitive viewpoint. Accessible cities are more open to participation by citizens and visitors in the social, cultural, economic and commercial life of the city,” said Dublin mayor Eibhlin Byrne at the recent “Access and the City - universally designed communications for ease of visiting and effective living in cities and towns” conference.

Although not quite at the European level, Canada is beginning to embrace universal design as a matter of course from the bottom up — a growing awareness of the basic issues and the obviousness of the course we must take from the top down — through increasing legislation.

The Accessibility for Ontarians with Disabilities Act (AODA), passed in June 2005, specifies that all public and private sector organizations in Ontario must be barrier-free by 2025. In addition, the existing Human Rights Code has very broad language to prevent discrimination on the basis of disability. Regardless of other existing specific standards and building codes, the Human Rights Code protects the right for people with disabilities to access workplaces, transit, shops and restaurants and therefore places an obligation on building owners to make their facilities accessible.

Most provincial building codes include minimal requirements for barrier-free design. Every cycle of code revision (usually every five years) is likely to result in increased requirements. Designing now to a high level of accessibility, rather than aiming for the lowest common denominator of the minimum requirements, will help future-proof the building, and shelter the building owner from high costs of renovation or legal actions later.

Further new legislation for barrier-free and universal design is on the horizon. The percentage of new buildings we create annually is tiny relative to the stock of existing buildings we have, so any legislation will need to address retroactivity in order to be effective.

Retroactive fixes to ensure universal access cost the owner far more than eliminating them at the start, which is why it is good common sense to incorporate universal design at the very start of the process and not be saddled with cumbersome costs afterwards.

Businesses today face considerable challenges in attracting and retaining customers and qualified staff, and they cannot afford to ignore the buying power and expertise of our older adults and people with disabilities. It is estimated that currently one in six Canadians has a disability, and that ratio will continue to climb as our baby-boomers age.

We need to do more now to make our cities and our buildings accessible to all. We need to stop creating new barriers by integrating the principles of universal design in all new work. We need to address our current stock, public and private, large and small. We need to change our attitudes: this is not specialized design, it is intelligent design; this is not a special interest group, this is us. We all deserve the dignity and the choice and the independence that will come with universal design, regardless of our abilities, our disabilities or our age. B Susan Ruptash is a principal at Quadrangle Architects Limited in Toronto.

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By Stephen Carpenter

Ever since the term “green buildings” came into existence, there has been a debate over how much energy — if any — these buildings actually save. As the premier green building rating system, LEED has become a lightning rod for a discussion of green building energy use. Last year the U.S. Green Building Council released a study of LEED buildings’ energy use in comparison to the national building stock. The study found that LEED buildings, on average, used 25 to 30 per cent less energy than the national average.

Despite this encouraging data, critics of LEED have three main assertions: 1. It is not fair or correct to compare the energy performance of LEED buildings which were built in the last decade to all stock (including buildings constructed almost a century ago).

2. The actual energy savings of green buildings often fall short of the savings predicted in the energy simulations.

3. If you take into account points 1 and 2, green buildings don’t save a significant amount of energy over regular buildings.

Let me address each of these points based on our experience with Canadian buildings. In regards to the first critique, for those who claim that comparing new buildings to old buildings is unfair, it is worth noting that the average energy use of Canadian buildings has not changed dramatically over the last century. In fact, a 2002 Natural Resources Canada survey of commercial and institutional buildings found that buildings built before 1920 used only seven per cent more energy than buildings constructed in the 1990s. Thus, although this is a relevant criticism it does not significantly affect the comparison.

As for the second point, some people have tried to evaluate the effectiveness of LEED by comparing predicted simulation results to actual data. In doing so they find actual energy use is higher than predicted and conclude that savings aren’t being delivered.

However, this predicted-actual savings discrepancy is hardly a surprise if one understands the purpose of the energy simulations.

Energy simulations completed for LEED are strictly for compliance purposes and represent a relative comparison of a proposed building design with a reference design.

To ensure a fair comparison, the simulations are completed using standardized operating schedules, occupancy loadings, etc. which may or may not be representative of the actual building.

Furthermore, “non-regulated” energy uses are not included in the model (e.g. elevators, server rooms, process equipment, and exterior lighting). Finally, energy simulations assume perfect construction and operation (for example, insulation fits perfectly, equipment operates at rated performance, and the building is operated in an energy efficient manner). Our experience is that if you adjust the LEED simulations for these factors, you can get predicted results very close to the actual energy usage. The danger is using a compliance simulation to predict actual performance – green building or conventional.

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Energy Intensity [KWh/m²]

Do green buildings really save energy?

400 350 300

Average Savings 40%

250 200 150 100 50 0

Average Building-A Canadian C/I Buildings built in 1990’s

Building-B

Building-C

Building-D

Building-E

Building-F

As for the final critique of green buildings, in Enermodal’s over 25 years of experience in the green building industry, we have found that green buildings can achieve significant energy savings.

For example our own head office, Green on the Grand, a green building constructed over 10 years ago, consumes 120 kWh/m2 (combined and gas energy use), still making it the most energy efficient office in Canada today.

Furthermore, one of the 70 LEED credits available is for measurement and verification (M&V) which requires one year of monitoring building energy performance by end-use and comparing it to calibrated energy models to determine further savings opportunities. We have pursued this credit on several LEED projects, and to date have a full year of energy results for six buildings.

The table above shows the actual energy consumption of these buildings. For reasons of client confidentiality, the project names are not listed. The graph also shows the average energy consumption of Canadian buildings built in the 1990s, the most recent decade for which data was available (to address Point 1 above). All six of our projects beat this average, some by as much as 60 per cent. While the average energy savings is 40 per cent, the long term energy savings will likely be higher once the first year operational issues are worked out. (Note: The variation between buildings is due to operational differences: some of these buildings operate 24 hours a day and all have different functions, including office, residential, and public service facilities).

Admittedly six buildings is a small sample size and generalizations across all LEED or green buildings are not possible. As more of our projects receive M&V data we will continue to look for trends, but for now we can take heart that the evidence strongly suggests that green buildings do save energy. B Stephen Carpenter is president of Enermodal Engineering and was Canada’s first LEED Accredited Professional as well as serving as the current chair of the Technical Advisory Group for the Canada Green Building Council. Enermodal has been Canada’s largest firm exclusively dedicated to creating energy and resource efficient buildings since 1980, certifying more LEED buildings than any other firm.

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