Building April May 2016

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LIFE AFTER THE BACK COVER…

66 02

CONTENTS

what’s on BUILDING.ca

READ > 10 Emerging Trends in 2016 KPMG explores trends that will change the world of infrastructure over the next five years.

FEATURES

15 > Troubled Land /

The lack of an open and transparent public consultation process suggests the NCC is treating Ottawa’s building plans as a business deal.

By Rhys Phillips

15

22 > Course Correction /

READ > “Farm Follows Fiction” Lemay’s graphic novel wins the “Reimagine a New York City Icon” design competition.

Does the formal adoption of LowImpact Development as stormwater management policy in Ontario create headache or hope for the province’s land development community?

By Andrew Sobchak

26 > Defixturing is the New Fixturing / EXPLORE > Rockfon A newly built office in Milton, Ont. brings together people and products into one building for the first time.

With brick and beam opportunities becoming limited, the tech sector is starting a new office trend in Toronto.

By Masha Dudelzak

IN EVERY ISSUE

6 > Editor’s Notes 8 > Developments 10 > Market Watch 12 > Legal 30 > Viewpoint

ABOVE IMAGE:

Canadensis LeBreton Flats Re-Imagined, one of two proposals vying to be picked by the National Capital Commission to redevelop LeBreton Flats in Ottawa.

(Image: DCDLS Group)

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Volume 66

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02 Number

Up and Away

Dancing about architecture may be impossible (or “stupid,” if I want to accurately quote Elvis Costello, who coined the phrase), but “acting” about architecture? As High-Rise, a new film directed by Ben Wheatley and based on J.G. Ballard’s 1975 novel, makes clear, the built environment can be far more than just a set piece.

Set in the 1970s, High-Rise is the story of Robert Laing, a young doctor seduced by a residential tower block in London. The building, really a small vertical city, is divided so the super-rich reside on the upper floors, the rich live in the middle, and the middle class live on the lower floors. With residents seduced by the insularity and glamour of its cohabitants, chaos ensues as the high-rise, and its social strata, begin to crumble. Imagine Stanley Kubrick’s A Clockwork Orange cross-wired with the faulty towers in Terry Gilliam’s Brazil and an apocalyptic class polemic akin to Bong Joon Ho’s Snowpiercer.

From the start, the conceptual framework of the film is built around an impressive geometrical precision similar to the building in which it is set, and creates a feeling of a laboratory experiment, less a narrative where we are supposed to care about the characters, and more like a thought exercise meant to explore the inner space of buildings, and what they represent psychologically, spiritually, physically, and more.

Taking this a step further, one could easily view the building itself as the main protagonist in the film, with the imbedded class strata carrying not-so-subtle Freudian representations of the ego, id and superego, and it’s actually the building going insane, not the occupants.

None of this will be any surprise to fans of Ballard: his novels repeatedly explore how physical landscapes affect the psyches of his characters, in particular “gated” or segregated ones. However, as interesting as these tropes may be from a literary or narrative perspective, I quickly found myself, in this thought exercise, being drawn to more allegorical explorations of urban environments. I was reminded, for instance, of Jane Jacobs’ argument that urban violence can be mitigated by designs and layouts that exploit the natural surveillance of open spaces inside and outside buildings; something that high-rise buildings notably lack.

Architecture enthusiasts will no doubt feel right at home here, and have fun picking out the Brutalist design cues that were lifted from “a moment in design that looked to the future and was still excited about it,” said Wheatley in an interview with The Guardian. “Now we mainly see dystopia or a white, shiny iPod future. The idea of a book looking to a future that has already happened and making a film looking back to the past to show a possible future was interesting.”

And yes, the class warfare elements cannot be ignored, but in and of itself, HighRise is not the place to come looking for moral commentary about the bleak economic and social inequality that seems to be evident everywhere these days – like the events in Baltimore, Ferguson and other American cities, set against the rise of mega-towers and the spread of gated communities for the super-rich, and the fact that there were 40 million more slum dwellers worldwide in 2012 than there were in 2010, according to the UN. But what I admired about this film, and a growing number of similar ones, is that it takes architecture and urban design out of the background and places its importance in everyday life in the foreground, forcing us to think about the social dimension of architecture and design and how it is an integral part of the challenges familiar to cities and communities around the world.

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

Charles J. DiRocco, Masha Dudelzak, Richard Joy, Rhys Phillips, Andrew Sobchak

Customer Service / Production Laura Moffatt 416 510 6898 Circulation Manager circulation@building.ca Sales Manager Faria Ahmed 416 510 6808 fahmed@building.ca Senior Publisher / Tom Arkell President, iQ Business Media Inc. Alex Papanou Building magazine is published by iQ Business Media Inc. 80 Valleybrook Dr. Toronto, ON M3B 2S9 Telephone: (416) 510-6845 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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We welcome your feedback. Send your questions and comments to psobchak@building.ca APRIL MAY 2016

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DEVELOPNews RAIC welcomes federal investment in built environment

OTTAWA | The exceptional investments Budget items related to the built environment and design announced in the federal budget give Highlights of social infrastructure initiatives include funding for: architects the opportunity to shape a national parks, small craft harbours, federal airports, VIA Rail stations and built environment that can improve the maintenance centres and border infrastructure; quality of life for Canadians and effect new affordable housing units and renovation of existing affordable housing, positive environmental change, says the including energy and water efficiency retrofits; Royal Architectural Institute of Canada construction, repair and adaption of affordable housing for seniors; (RAIC). The broad scope of the budget construction and renovation related to improving physical accessibility and — from the science of climate change safety for people with disabilities; to building codes; from the preservarenovation and construction of arts and heritage facilities; tion of heritage structures to the creNational Historic Sites Cost-Sharing and expanding it to include heritage ation of future landmarks — provides lighthouses and railways; the raw material to design healthy, safe construction of a new collection and conservation centre for the Canada Science and sustainable communities that can and Technology Museum; the renewal of the National Arts Centre’s performreach their full potential in all respects. ance venues; and repairs to the National Gallery of Canada.

Across Canada, a renewal of places repairs and retrofits for government properties and buildings, as well as the and services such as public transit, greening of government operations. affordable housing, cultural and recreational buildings, child care centres, Highlights of initiatives for Indigenous communities include funding for: family violence shelters, and environexpanded and enhanced health facilities in First Nations communities; mental infrastructure carries the potenhousing needs on reservations and in Inuit and northern communities; tial for a more equitable society and repairs and renovations of Indigenous early learning and child care; engaged citizenry. The government’s construction of cultural and recreational communities on reservations; commitment to the design, construcrenovations to and the construction of new shelters for victims of family viotion and rehabilitation of green, clilence in First Nations communities. mate-resilient buildings and infrastrucHighlights of green infrastructure include funding for: ture promises to not only protect the Natural Resources Canada to deliver energy efficiency policies and programs, environment but also create jobs, imincluding improved energy efficiency standards and codes for buildings; prove health, promote Canadian techintegration of climate resilience into building design guides and codes; nology and reap energy savings. a new Post-Secondary Institutions Strategic Investment Fund to enhance Patrick Stewart, chair of the RAIC’s research and commercialization facilities on Canadian campuses, and projects Task Force on Sustainable Indigenous that improve environmental sustainability; Communities and a member of the Environment and Climate Change Canada to advance the Government’s domestic Nisga’a Nation, praised the governclimate change objectives through science, data reporting, policy and regulations. ment’s “wisdom in budgeting muchneeded investment in basic infrastrucChanges and updates to National ture, education and health care in First Nation, Metis and Inuit Energy Code for Buildings communities. However, if these investments are to be successful, the process of implementing them must be one that OTTAWA | New buildings in Canada will become more energy involves the authentic and meaningful participation of commuefficient with the introduction of some 90 changes to the nity members,” he said. “These projects are an opportunity to National Energy Code of Canada for Buildings 2015. These reinforce Indigenous identity, and can be an important step on changes also harmonize the Code with Canada’s energy effia path to reconciliation.”

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QUICK FACTS

ciency regulations and industry standards. Updates can be found in standards for lighting; service water; and HVAC systems, such as gas-fired units on rooftops; and for ventilation systems in enclosed spaces like parking garages or warehouses.

The National Energy Code of Canada for Buildings 2015 is published by the National Research Council (NRC) and developed by the Canadian Commission of Building and Fire Codes in collaboration with Natural Resources Canada. Provinces and territories are free to adopt the National Energy Code of Canada for Buildings or adapt it to create a code that meets their specific needs.

“As Canada’s go-to research and technology organization, the NRC is providing Canadians with solutions based on sound scientific knowledge and industrial innovation,” says Richard Tremblay, NRC’s General Manager of Construction. “The construction industry is asking for more energy efficient design and building solutions, and this new code will help them get there.”

CSA Group publishes the first national standard on home inspections TORONTO | CSA Group, a provider of standards development

and testing and certification services, has published the first Canadian standard on home inspections. CSA A770-16 Home Inspection will help home buyers to compare inspection services, and it will establish clear requirements for the inspection of homes. Until now, there has been no accredited standard for home inspections and inspectors do not all follow one particular guideline. As a result, inspections can vary greatly from one inspector to another and across Canada. With the average price of housing in Canada consistently increasing, there is a growing need for consumer protection.

Inconsistency in the approach to inspections can create a risk for both consumers and home inspectors, and the lack of clear expectations for what a home inspection entails may cause increased liability for both parties. The CSA Group technical committee, comprised of stakeholders including real estate agents, home inspectors, consumer protection groups, governments and others, agreed that a national standard would help provide clarity.

While the standard is voluntary, by adopting it home inspectors will have a better defined, clear set of requirements to stand behind when disagreements arise. Widespread implementation of the CSA standard will help inspectors to provide the best possible service to clients on a level playing field. Home buyers will have a clearer sense of what a home inspection entails and a better understanding of the scope and purpose of the service, and may seek out inspectors who can conduct an inspection to the benchmark of the standard.

NEW BUILDINGS CONSTRUCTED TO THE UPDATED CODE WILL BE 27 PER CENT MORE ENERGY EFFICIENT THAN THOSE CONSTRUCTED IN 1997.

La SHED named 2016 Emerging Architectural Practice

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OTTAWA | A Montréal firm that designs

fresh, contemporary houses inspired by the informal qualities of Montréal’s residential lanes is the recipient of the ENERGY EFFICIENCY 2016 Emerging Architectural PracIN CANADA’S tice Award given by the RAIC. La SHED COMMERCIAL AND INSTITUTIONAL Architecture, a nine-person office, was SECTOR INCREASED founded in 2011 by Renée Mailhot, BY 33 PER CENT Sébastien Parent and Yannick Laurin.

BETWEEN 1990 AND 2012. THE The trio graduated in 2008 from the ENERGY SAVINGS University of Montréal, where they met.

ACCUMULATED Their work includes free-standing COULD POWER 45.5 MILLION COMPUTERS houses and additions in tight urban FOR ONE YEAR. contexts as well as small commercial projects and vacation properties.

For three years after graduation, the founders interned at larger firms, while spending evenings and weekends on la SHED projects. They shared a triplex and worked from their living rooms, passing files and computers from one floor to the next. The firm’s name alludes to its work, which expresses the eclecticism of the alleyways shaped by the old storage structures typically found behind Montréal homes.

Located in a storefront, the studio aims to bring architecture closer to the general public, where designing a personalized living space is not a luxury but an accessible service.

The Emerging Architectural Practice Award recognizes the principals of an emerging architectural practice that has consistently produced distinguished architecture. The award recognizes the quality of built work, service to clients, innovations in practice and public recognition. “La Shed has found a way to produce great work in a market in which architectural success is often elusive: the small home renovation,” said RAIC president Allan Teramura. “Their accessible designs reflect the life circumstances of their clients while achieving a high level of design character. One imagines that working with them is also a lot of fun.” b

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MARKE T Spotlight: Real Estate Investment

Despite global economic concerns, CRE executives see opportunity in 2016

tunities and a more stable market. The respondents’ sentiments on the economy reflect other assessments of the economy: inflation is tame; interest rate increases might have already been figured into forecasts; and the U.S. gross domestic product is poised to continue growing, if only just modestly.

Demand Side The increased number of Millennials joining the workforce, along with an aging Baby Boomer generation, has resulted in a number of demographic shifts that will affect commercial real estate decisions this year. Millennials are proving to be unique from previous generations and their influence is being felt, particularly in the office space sector as they are creating distinct work environments that include communal spaces and allowing for telecommuting in order to attract young new workers.

When we asked CRE executives to rate their confidence regarding the growing importance of telecommuting, walkability, public transportation and mobile device communications on real estate investment decisions, they reported a stunning score

By Charles J. DiRocco of 75 out of 100, confirming the impact this demographic is having on the industry. Furthermore, executives were similarly confident that office redesigns would incorporate more “open air” layouts this year.

Even larger real estate changes are being driven by demographic trends in the multifamily sector. The increased After years of record setting performance in the commerdemand in this area has resulted in Millennials renting in cial real estate (CRE) industry, many experts are reporting their preferred core markets for longer periods of time bethat 2016 will show the beginnings of a market slowdown. fore buying homes. Additionally, walkability is becoming But what do CRE executives think? Their opinions are what an increasingly important factor, not just with Millennials really count as they evaluate and compare early predictions looking for convenience, but also for Baby Boomers who are with current reality each day to ensure they are making propnow downsizing to smaller, more modern homes in accesser strategic decisions for their portfolios. ible areas.

Altus Group, in partnership with the National Association of Real Estate Investment Trusts (NAREIT) and the National Council of Real Estate Investment Fiduciaries (NCREIF), recently polled CRE executives for the 2016 Real Confidence survey to uncover their outlook on a range of topics affecting the industry. In charge of over $700 billion in combined real estate assets, these top executives offered important and interesting insights into what factors real estate investors are keeping in mind as they continue to invest this year.

A Broader Outlook Economic instability doesn’t sit well when making large investment decisions, so to get a better understanding of executives’ perceptions of the current economic state, we asked them to quantify their confidence in both the U.S. and wider global economy on a scale from zero (no confidence) to 100 (absolute confidence). While respondents rated the U.S. economy mildly healthy at 63.3 on the scale, their confidence wavered when it came to the global economy, rating it only a 45.4.

With a number of unpredictable global worries, like terrorism and energy prices, executives felt the U.S. was the best place to invest real estate capital as it offers broader opporAPRIL MAY 2016

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Supply Side While the majority of executives surveyed aren’t expecting the same double-digit asset appreciation we saw in 2015, they rated their confidence in the state of the real estate industry a healthy 68.5 and showed substantial confidence that real estate development would increase this year, with a 58.9 rating. This assurance comes even though executives also felt strongly that construction costs for new projects would rise in 2016, rating their confidence in this area a 66.1 out of 100.

Respondents hypothesized that demand increases in the multifamily sector, where the occupancy levels are very high, and the industrial sector, where e-commerce and automation increasingly requires new space, will be enough to absorb the developments already underway and justify additional investments this year.

Performance According to CRE executives, real estate will still be all about location. With a whopping 83.1 rating, respondents confi-

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dently stated that location has a much more sizeable impact on commercial real estate returns over design. Executives reported that design will also have an impact, but only scored a 57.1 confidence rating, indicating that great design at a less-than-perfect address will still have the potential to be a strong investment.

The biggest design changes in 2016 will be seen in the multifamily space. Apartment developers are moving away from the bland, boxy format in favour of eye-catching buildings that are close to public transportation and have walkability. Additionally, developers are increasingly taking chances on spaces outside of in-demand core markets in hopes that consumers will travel further to enjoy luxurious amenities at a lower rent.

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Portfolio Challenge In an attempt to uncover where CRE executives see opportunity in 2016, we challenged survey respondents to theoretically allocate $1 billion among a variety of real estate investment options, the goal being to produce the largest total return by the end of the calendar year. Their selections reflected an air of economic concern with the less volatile private equity option receiving 49.3 per cent of the $47 billion total capital. Four of the five core sectors within the private equity option – office, industrial, apartments, and retail – were fairly split, however the office sector came out slightly ahead with 25 percent, or $5.8 billion dedicated to that sector. 31.2 per cent of the additional capital was allocated to public equity real estate, or REITs, followed by a risk-averse choice in private debt at 13.3 per cent. Public

Charles J. DiRocco, CRE, CCIM, FRICS, is a Director of Research, Valuation and Advisory at Altus Group. www. altusgroup.com

debt, commercial mortgage-backed securities (CMBS) or residential mortgage-backed securities (RMBS) options only amounted to 6.2 per cent of the $47 billion total allocation.

The investment trends uncovered by the portfolio challenge follow a pattern that reflects the economy. While commercial real estate in general may experience some hiccups this year, by locking into more predictable and dependable ventures, investors can still see positive returns in 2016.

The insights from the 2016 Real Confidence survey show us that CRE executives appear to be more optimistic on the fundamentals of the economy than the broader markets would suggest. A market with strong essentials, an economy with slow and steady growth and a steady pipeline of development are giving investors hope for the year ahead. Even with a potential slowdown in the industry, commercial real estate will continue to justify its place in investment portfolios in 2016. b For more information on the 2016 Real Confidence survey, go to Realconfidence.com

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12

LEGAL The Amexon Answer to the Evergreen Question Efficient Breach is not so efficient when it comes to landlord eviction remedies

By Jeffrey W. Lem

Alas, the landlord and tenant in Evergreen settled their dispute before the nation’s top court could again consider the legal nature of a lease. The collective dismay expressed by the Canadian leasing bar, both traditionalists and progressives alike, was deafening — proving, once and for all, that it truly does not take much to deflate us Canadian leasing lawyers! For the past decade since Evergreen’s unsatisfactory aborted run at the Supreme Court, Canadian leasing lawyers, especially outside of British Columbia, have struggled with the applicability of Evergreen beyond British Columbia’s borders.

A recent appellate case provides at least Ontario leasing lawyers with some antidote for their Evergreen-induced anxiety. In the Ontario Court of Appeal’s 2015 decision in 1465152 Ontario Ltd. v. Amexon Development Inc., the facts were, for all practical intents and purposes, identical to the facts in Evergreen. Like in Evergreen, the landlord in Amexon wanted to evict a tenant who was in good standing, simply in

Even rookie real estate lawyers recognize the 1971 Supreme Court of Canada decision in Highway Properties v. Kelly Douglas as being the seminal Canadian decision establishing, at the highest judicial level, that a lease has the legal features of both a contract and a real property conveyance. In Highway Properties, the “front” legal issue was one of contract damages for a tenant’s breach, but the “underlying” legal issue at the heart of the litigation was the nature of the real property lease. The Supreme Court in that case confirmed that a lease was a legal hybrid, being simultaneously both a contract and a conveyance, and this has remained a largely unchallenged tenet of Canadian leasing law ever since.

That was, until the British Columbia Court of Appeal gave the Canadian leasing bar its take on the legal nature of a lease in its 2006 decision in Evergreen Building Ltd. v. IBI Leaseholds Ltd. The issue in Evergreen was not the entitlement to damages for a tenant’s breach, but rather the landlord’s right to unilaterally terminate a lease (without cause or right), so long as the landlord was willing to pay compensatory dam- The Canadian leasing bar went crazy ages for the breach. Although the “front” legal issue at stake at the prospect of an ultimate-level in the two cases was different, the underlying determination reconsideration of Highway Properties of whether a lease was a contract or a conveyance (or both) — proving, once and for all, that it truly remained the “underlying” legal issue in both cases. does not take much to excite us Canadian Greatly paraphrased, the Court of Appeal in Evergreen leasing lawyers!

A store on Westthat, if a lease was a form of contract, then either postulated Street in Goderich, partyhistoric to that contract should be entitled to breach that conOnt.’s downtown beforeas thethe defaulting party was prepared to pay damages for the breach. order to clear out a building for redeveltract so long tornado hit (above), opment. The landlord, without any Although not specifically quoted in Evergreen, the British Columbia Court of the damage (right), cause or contractual right to do so, gave Appeal effectively imported Oliver Wendell Holmes’s notion that “the duty to and in August 2013 (below) the town’s a notice to the building’s last remaining keep aafter contract at common law means a prediction that you must pay damages if rebuilding efforts. tenant, forcing the tenant to vacate the you do not keep it, and nothing else,” and translated it directly into the notion that leased premises in anticipation of dea landlord, at least in British Columbia, could evict at will and had no duty to molition, on the simple premise that honour the sanctity of its demise, so long as an adequate cheque for damages the landlord would pay compensation accompanied the landlord’s notice to quit! for the dislocation. The landlord in When leave to the Supreme Court of Canada was granted in Evergreen, the Amexon argued that the doctrine of Canadian leasing bar went crazy at the prospect of an ultimate-level reconsidera“efficient breach” allowed such eviction of Highway Properties — proving, once and for all, that it truly does not take tions, just like in British Columbia afmuch to excite us Canadian leasing lawyers! Although it seems a little hyperbolic ter Evergreen. The tenant, in contrast, in retrospect, this author mused at the time that Evergreen was seen by many as did not want the compensation and in“the Highway Properties-killer, the case that would shed the Canadian law of comsisted on remaining in the leased premmercial lease remedies of its cumbersome conveyancing roots and propel the law, ises for the full duration of the term. once and for all, into the modern era of “pure contract” remedies.”

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Alas, the Ontario Court of Appeal in Amexon did not share its west coast counterpart’s enthusiasm for legal reform, choosing instead, to affirm Highway Properties. Unlike in Evergreen, the Ontario Court of Appeal in Amexon rejected the extension of efficient breach to landlord remedies. Stephen Posen, one of the most prominent senior members of the Canadian leasing bar, summarizes the effect of Amexon as follows: “Amexon has been welcomed as addressing the serious commercial problems created by Evergreen...If landlords were permitted to terminate leases in good standing without lawful authority for doing so, the entire crux of the lease would be rendered meaningless.”

In many ways, Amexon is far more than simply an Ontario case that is 180 degrees opposite a similar British Columbia case. In Amexon, the lease contained a specific clause saying, in effect, that no matter what the landlord did to breach the lease, all the tenant could ever do in response was to sue for damages. In fact, this was precisely what the landlord wanted to do — wrongly evict the tenant, and then pay compensation instead. The Ontario Court of Appeal in Amexon refused to allow the landlord to rely on that clause in the lease to excuse such a major breach of the lease, signalling that, not only will Ontario courts require landlords to generally honour their leases, Ontario courts will also not allow land-

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lords to “contract out” of the obligation to honour those leases.

Christina Kobi, a commercial leasing expert at McClean & Kerr in Toronto, notes that, while Amexon confirms Jeffrey W. Lem is the hybrid nature of commercial leases Editor-in-Chief of the in Ontario, it is hardly the first such Real Property Reports Ontario case to do so. According to Kobi, and the Director of Titles Ontario courts have staunchly supportfor the Province of ed the Highway Properties’ “contract Ontario. The opinions and conveyance” paradigm, both before expressed in this article and after Evergreen. For example, in the are personal to the 2011 Court of Appeal decision in Re author and not TNG Acquisition Inc., a unanimous attributable or referable panel of the Court Appeal affirmed the to the government of dual hybrid nature of the lease as both a the Province of Ontario. contract and a conveyance, albeit in a different context. As Kobi notes, “whether or not Highway Properties was ever really “killed” by Evergreen, even in B.C., the law in Ontario has always supported the Supreme Court’s characterization of a lease from that case.” So, while Amexon is great news for legal traditionalists and at least tenant-side leasing lawyers across the country, it may very well prove much ado about nothing, at least in Ontario. b

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TROUBLED LAND The lack of an open and transparent public consultation process suggests the NCC is treating Ottawa’s building plans as a business deal.

By Rhys Phillips

“It’s about time; what took you so long?”

“It’s about time; what took you so long?” Versions of this question, directed at the hapless National Capital Commission (NCC), reverberated through Ottawa on January 26. And it had nothing to do with the unseasonably late opening of the much-beloved Rideau Canal skateway. Rather, it came in response to the NCC finally making public two ambitious, competing proposals to redevelop a major part of the remaining 19.4 hectares of LeBreton Flats, the barren and polluted riverside land west of and fully visible from Parliament Hill. Since 1962, when its mix of industrial, commercial and residential properties were summarily expropriated, its tightly knit community of working class citizens evicted and every building but one quickly razed, multiple proposals have blossomed, only to wilt away. Of three inventions that did make it past the planning phase, only the Canadian War Museum has enjoyed widespread admiration. building.ca

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Each totalling $3.5 billion, the two private sector schemes are from Devcore Canderel DLS (DCDLS) Group, including Québec-based billionaires André Desmarais and Guy Laliberté of Cirque de Soleil fame; and RendezVous LeBreton, headed up by Eugene Melnyk, owner of the Ottawa Senators.

The unveiling, however, took place under a shadow. Of four shortlisted teams invited to submit detailed proposals, only two came through. In December 2015, both Claridge Homes and Focus Equities withdrew, but cited no reasons.

“History repeats, first as tragedy…

LeBreton Flats lies next to the Ottawa River’s once impressive Chaudière Falls. For First Nations, the falls carried significant religious meaning, while the Flats served as a major meeting place for the Anishinaabe including Huron, Ojibwa, Iroquois, Odawa and other trader nations. But for European colonists in the 19th century this counted for little. So emerged tragedy number one that is still the subject of land claims.

In the second half of the 19th century, with the power offered by the falls and the shift from square timber to cut lumber, Hull, the islands below the falls and LeBreton Flats emerged as major industrial centres. Then on April 26, 1900, a Hull chimney fire, backed by strong winds, quickly spread through wood houses to the dense piles of riverside lumber before pushing the conflagration onto the Flats. Cue tragedy two. In the end, seven people died, followed by many more from disease in the resulting tent cities. 15,000, over 40 per cent and 12 per cent of Hull and Ottawa citizens respectively, were left homeless. The rich who previously resided around their businesses absconded to the tonier community of Sandy Hill while the Flats was rebuilt with railyards and industry partially surrounding worker housing.

In 1937, Prime Minister McKenzie King settled on Jacque Gréber, a French architect and urban planner, to create a worthy national capital. Although delayed by the war, Gréber’s deeply flawed plan, a mix of pompous Beaux Art formalism and Le Corbusier’s misguided city-in-a-park but car-directed Modernism, was unveiled in 1950. In general, the plan wanted railways out and car routes in. Gréber saw Ottawa’s abundant river frontage as an asset to be ‘greened’ but also cut off access with benignly labelled car Parkways.

In the process, he completely misunderstood the importance of animated urban life as part of these waterways. His treatment of LeBreton Flats reflected these principles. Get rid of the industry, railway tracks and the residents; cut the APRIL MAY 2016

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LEFT and ABOVE: Early

life in LaBreton Flats was notoriously rough, even after post-fire redevelopment. RIGHT: The IllumiNATION LeBreton proposal tendered

by RendezVous LeBreton Group includes a new Ottawa Central Library, to be built at the corner of Albert and Booth Streets; a 18,000-seat capacity Major Event Centre (MEC); and residential development on either side of the Aqueduct.

site with a four lane Parkway and add a major arterial down Preston Street to end at a huge traffic circle on the flats. Very Corb-like slabs in a park-like setting would stretch around a large crescent-shaped beach on Nepean Bay above the now dammed falls.

But it took 12 years before LeBreton’s third tragedy was unleashed. On May 12, 1962, over 2,800 residents were sent packing. Many, including the Ottawa Citizen, justified the brutal decision as welcome “slum” clearing. While it was a gritty neighbourhood it also constituted a tight knit working class community. Historic photographs document examples of sub-standard housing, but also show significant, even ornate, rows of brick buildings and churches as well as a striking Château-style train station. By 1964 it was all gone. Gone too was a large chunk of Nepean Bay, infilled with toxic waste from the demolition. …then as farce.”

Also missing was Gréber’s buildings-in-a-park, replaced by the Diefenbaker government’s plan for Pentagon North: three skyscraper towers for National Defense. To embrace the towers, the Ottawa-Hull Area 1965 Transportation Plan proposed obliterating the rest of LeBreton with a tangle of expressway lanes and interchanges. When both schemes mercifully died in 1969, two rather bizarre proposals were touted over the next five years. The first was a mammoth garbage incinerator while the second advocated

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National Plaza

17

Major Event Centre Pimisi Station

Photos courtesy of Knightsbridge

Bayview Station

Ottawa Central Library

Abilities Centre Ottawa and Sensplex

a STOL airport. Meanwhile, the NCC slogged ahead with plans closer to Gréber but now with much higher towers, finalizing its proposal in 1975.

Wait a minute; change of plans. Canada Mortgage and Housing Corporation (CMHC) hired a young Jack Diamond, who with broad public consultations produced a dense plan of townhouses and low rises. In the end, however, only an enclave of social housing south of Scott Street, character-

ized by pavement and garage doors, was built along with the city’s bus-only transitway (converting to LRT by 2018). After LRT Station 1980, the NCC, now working with the city (which retained jurisdiction over LeBreton’s streets) plugged away for another 20 years, with the new millennium seeing New Urbanism-style mid-rise concept drawings.

With the 2005 completion of the much-admired riverside Canadian War Museum, along with a large but featureless grass “agora” opening out to the west, the NCC set about to develop the 4.4 hectares of land closest to Parliament Hill. One might have expected a major international design competition to ensure urban design and architecture worthy of a National Capital. But there was one big problem: the Mulroney government had quietly changed the rules back in the 1980s, dictating the NCC had to receive the full market value for its properties. While this didn’t preclude a design competition followed by a private sector build (as was done by Calgary for its city-owned East Village), it opted to issue a two stage, design-build call for condos set in a semi-gated street plan. Only developers able to handle the full site were welcome, which excluded more creative boutique developers.

While the response was underwhelming, three consortiums were invited to submit detailed proposals. At the very last minute, two developers withdrew leaving only Claridge building.ca

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Homes, a three-time successful bidder on major NCC sites.

In response to harsh criticism of the project’s designs, Larry Beasley, Chair of the NCC’s Advisory Committee on Planning, Design and Realty, promised the designs were more massing studies than completed designs. A decade later, he has been proven wrong, leading many to add the minimalist buildings to their “Worst List.”

Lessons not learned One might have thought the condo debacle would have provided valuable lessons for the NCC. As the CBC reported in early 2015, even John Baird, the Minister responsible for the NCC opined, “If we wanted to slap up some soulless, ugly condominiums we could do that very quickly, but let’s take the time to get it right.” Taking Baird seriously, one of two processes might have come to mind. The first would have been, as Helsinki did in arriving at its celebrated Emerald Plan, to invite the best designers in the world to propose competing visions before moving on to a series of design competitions.

The other would have been to engage in an intensive iterative process with the public and urban designers/architects to define the role and look of this key piece of the Nation’s Capital to ensure it was a showcase of Canadian urban development mingled with equally representative cultural infrastructure.

Instead, NCC set in motion an almost identical business investment process for the next 8.3 hectares (strangely including an “option” for proponents to include plans for another whopping 12.3 hectares). The one difference in the December 2014 Request for Qualifications was a weaklydefined requirement for “a particular emphasis on attracting a non-residential distinct anchor use, which may be a private, public/private, national or international-scale attraction or institution.”

Although the size of the project was huge, interested parties were given only two months to produce submissions that demonstrated both their qualifications and their “vision.”

Even after an extension, only five proposals were received.

One failed to make the cut when the NCC’s shortlist was announced on February 18, 2015. These four, which again included Claridge Homes, were then provided with a Request for Proposals package, heavy on urban and architecture “design excellence” rhetoric but short on a well-defined Canadian vision other than to “leverage public lands to enhance APRIL MAY 2016

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CLOCKWISE from LEFT: DCDLS Group proposes to build Canadensis LeBreton Flats Re-Imagined over three phases spanning 2017 to 2031, and will include major tourist attractions like the 341,000-sq.-ft. World Automotive Experience, and a 61,570-sq.-ft. national flagship YMCA.

the attractiveness of the National Capital by attracting a new public anchor use(s) and bringing lively civic life back to this historic capital district.” While LEED Gold was required for larger buildings, the emerging imperatives of the Smart City or references to the strong urban role in the emerging knowledge economy was absent.

Despite the surprising withdrawal of half the shortlist, the Commission proceeded to announce the two remaining proposals on January 26, 2016. Subsequent public consultations included public viewing of detailed design boards, the right to complete an NCC-drafted questionnaire and two wellattended evening sessions. At the last, proponents primarily extolled the virtues of their proposals with very limited time for questions. On February 8, a cone of silence dropped into place with the developers forbidden from talking any further about their submissions. With luck, Ottawans will find out the preferred option in winter 2016.

Problematic process but promising results?

Process complications aside, how strong are the two surviving projects? While they are quite different in several key ways, their two similar components immediately raise questions. The first and least significant is the inclusion of a City of Ottawa central library. Certainly a good idea given the city’s current library and both proposed designs have merit, particularly RenedezVous LeBreton’s animated design by Danish stars Schmidt Hammer Lassen Architects (despite the proposed location being outside the NCC’s boundary). But neither proponent is expected to foot the bill and the City’s enthusiasm appears limited at best. Considerably more problematic, however, is the defining non-residential component.

While few were surprised when Melnyk proposed a new hockey and performance venue, most were extremely surprised when the Canadensis project by the DCDLS Group also proposed the same after hinting earlier at including “multiple cultural institutions.”

Immediately, Melnyk emphatically stated that the Senators will not be sold nor will they play in anyone else’s arena.

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Bandshell

World Automotive Experience

Blue Planet Pavilion / Aquarium

Future Pavilion

Canada Circle

Planetarium

Theatre of Sports & Entertainment

19 Retail Follies

Science & Innovation Pavilion

Residential / Mixed-use Sector

In other words, if the arena/performance venue is a must for DCDLS, we are back to the previous much criticized condo project—just a single contender. But, as we shall see, Canadensis includes a raft of other non-residential “attractions” and its arena, unlike RendezVous’ phase one timing, is pushed out to the third and last phase of development. But, with modifications, DCDLS could opt simply for a tailored large scale performance/entertainment venue, potentially stripping the Senator’s existing arena in suburban Kanata of up to 200 lucrative nights of non-hockey bookings. Neither of these issues was dealt with substantively in public before the iron curtain of secrecy descended in February.

Illumination LeBreton But the differences in the proposals are also significant. Illumination LeBreton (RendezVous Group) is much more about extending the urban core, albeit with much greater verve than has been the case in most of Ottawa’s downtown. It proposes five mixed-use neighbourhoods laid out in a series of

traditional street grids, although some lack through vehicle circulation. Renderings unfortunately suggest generally boxy towers and mid-rises aligned with the grid. Intentionally or not, this rather classical layout includes the celebrated Roman urban planning preference for an east-west axis (decumanus maximus), here called Canada Way, and a northsouth axis (decumanus maximus), rendered as a rather intimidating four-lane extension of Preston Street.

Reflecting its urban living focus, the built-out plan projects 4,400 residential units, with both local firms such as Mattamy Homes and national residential builders forming part of the partnership. This also includes Centretown Citizens Ottawa Corporation, a well-established social housing NGO. What is lacking is consideration of required social infrastructure such as schools, supermarkets, and so on.

Its mandated anchor is a Major Event Centre (arena) along with an accessible sports/wellness Abilities Centre Ottawa twined with a “Sensplex” containing two NHL-sized hockey rinks. A series of open public spaces (Melnyk reports the project is 50 per cent open space) supports partnerships such as with the extremely successful summer Bluesfest.

Another partnership with the Canada Science and Technology Museum calls for the plan’s pedestrian concourse, dub­ bed the Public Art Axis, to “stage” Innovation Promenade, building.ca

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ABOVE LEFT: A

proposed seniors living residence of 11 storeys on top of a two-level retail podium. ABOVE RIGHT: At the north end of Preston Street, the Terminus is intended to become an animated piazza for the mixed-use precinct.

a “digital pathway… of discovery.” Taking advantage of the downward slope toward the north, Illumination LeBreton, unlike Canadensis, wisely proposes to build over Ottawa’s currently in-construction LRT line thus ensuring the delightful open aqueduct has both a raised terrace and a bankside pedestrian promenade on the south bank of the waterway.

Canadensis- LeBreton Re-imagined Two major conceptual differences separate Canadenais from its rival. First, save for a single street loop serving a residential/office/retail mixed-use component, it envisages future city landscapes with limited car use. Second, its pedestrian-only decumanus maximus — Canadensis Walk augmented by the uncovered LRT guideway — divides its smaller city living component on the south from a much larger, car-less area hosting a raft of public “anchor” attractions of varying significance.

Its single urban village spanning between Scott Street on the south and the LRT line on the north is projected to have only 2,500 residential units in a series of towers and midrises. Space for a YMCA is touted as part of its intent to ensure affordable housing. DCDLS Group has also established partnerships with Canadian retailers such as Farm Boy supermarkets and RBC as well as the Ottawa French Catholic School Board. Near the eastern terminus of the south component is a large Innovation Centre with attached student housing, as a contribution to the knowledge economy.

To the north of the LRT, Canadenais proposes an undulating “Retail Follie,” anchored at both ends by hotel/condo towers, that stretches along the aqueduct. A promise to showcase the best Canadian brands is included. The problematic, if architecturally striking, arena is pushed to the west end next to the Bayview LRT. But, it has been significantly augmented by an ambitious collection of venues designed to educate, entertain and inform. These include the Canadian Communication Centre; the (ironic) World Automobile Experience;

the Air Pavilion sky diving simulator; SPIN Skateway Pavilion; Blue Planet Pavilion (aquarium); Science and Innovation Pavilion/Planetarium (with the science museum); Future Innovation Pavilion and two separate Future Pavilions. Not incidentally, a local swimming beach will be re-intr���ced in the small inlet that enters the site off Nepean Bay. In this intriguing potpourri of high-end amusement park attractions and Worlds Fair-like pavilions, some, like the sky diving simulator, are products of commercial partnerships.

The financing, ownership and governance model of the “public anchors” like the Canadian Communication Centre, however, remain unclear.

One or the other Setting aside the troubling arena controversy, with only two proposals, albeit with significantly different visions, selecting a preferred option is not easy. Illumination LeBreton is overly skewed to traditional commercial and residential real estate, if very well refined in terms of Ottawa’s historic development.

Its only truly major alternate “anchor” is the event facility/ Senators arena. Canadensis – LeBreton Re-imagined has included some questionable “public” elements like the car museum and overly segregated its two major functional areas. In terms of architectural representation, the latter’s BBB Architects-led team with Moriyama and Teshima Architects and Provencher Roy Associés Architectes, has produced accomplished, highly detailed, sometimes eye-popping designs.

With the exception of the off-site library (designed by KPMB Architects and Schmidt Hammer Lassen Architects) and the arena/performance centre, Illumination LeBreton’s team lead

by Barry J. Hobin and Associates Architects with Daoust Lestage, Perkin+Will and KPMB are rather staid. This said, there is usually many a slip between lip and cup during concept realization, as Ottawa found out recently in its Lansdowne revitalization (Building, June- July 2014 / February-March 2013).

Many questions hang in the air and the answers will remain behind closed doors over the next nine months. Still, one can only wonder what one or more wonderful alternative visions might have emerged if LeBreton was conceived as a National Capital building exercise and not a business transaction. b

building.ca

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2016-05-18 2:36 PM

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Course Correction

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By Andrew Sobchak

Does the formal adoption of Low-Impact Development as stormwater management policy in Ontario create headache or hope for the province’s land development community?

APRIL MAY 2016

building.ca

to divine what the new guidelines will contain or what impact they may have domestically are turning abroad to comparable early adopters like Philadelphia. There they learn LID’s baggage is a steep learning curve, but with it comes opportunity for industry to build more desirable communities and pad the bottom line in the long term.

I

In an unusually blunt statement, the Ontario government admitted last year that stormwater management strategies employed in the province have not been working. “The environmental health of many watersheds continues to decline as urbanization increases,” read the Ministry of Environment and Climate Change’s (MOECC) February 2015 ‘interpretation bulletin.’ The trouble, they suggested, was the strategies designed to control the quantity and quality of water runoff leaving a developed site were missing the mark. They were not mimicking natural hydrologic conditions well enough to prevent damage to downstream environments, which is the raison d’être of stormwater management.

The bulletin was at once a shot across the bow of industry and a signal of imminent changes to stormwater management regulation in the province. The biggest of these changes was the promise of new, clearer design guidelines which would better align with Low-Impact Development (LID), a movement now reaching a tipping point of popularity in North America. LID is a concept with decades of history and deep roots in Europe and the United States, blooming first in centres like Portland, Ore; Seattle, and Philadelphia. Canada, on the whole, has been slower to warm to LID but now cities like Mississauga, Toronto and Vancouver are playing more prominent roles in the iterative global development of this technology.

Fourteen months on from the MOECC’s bulletin, little news regarding the new design guidelines has been offered, and industry anticipation is escalating as the year-end deadline comes into view. Those in Ontario’s urban centres trying

23

The Philadelphia Story “We were really impressed with the concepts and how simple they were, and yet how difficult they were to implement, too,” says Howard Neukrug, referring to the vast array of available LID practices, which includes rain gardens, bioswales, cisterns and green roofs. “[LID] was really changing the whole approach, the whole thought process of how engineers and city planners and developers have been managing water.”

In December 2015, Neukrug retired as CEO and Commissioner of the Philadelphia Water Department, leaving behind an impressive 37-year legacy and one of the most ambitious big-city water strategies undertaken in the 21st century. The US$3 billion, 25-year Green Cities, Clean Waters plan, signed into law in 2011, set to battle a looming combined sewer overflow problem by reducing the amount of stormwater entering the sewer system entirely through green infrastructure and LID practices. The plan aims to recreate “living landscapes that once slowed, filtered, and consumed rainfall by adding green to streets, sidewalks, roofs, schools, parks, parking lots and more.” When fully implemented in 2036, it is estimated waterway pollution will be reduced by 85 per cent while saving Philadelphia nearly US$6 billion.

The Green City, Clean Waters plan, like the proposed MOECC design guidelines update, is an attempt to provoke sweeping change to the way a community thinks about and deals with stormwater. “When you look at a city like Philadelphia or Toronto,” says Neukrug, “what you see is that surfaces from the top of the roof to the middle of the street, to the sidewalk, to the backyards, everything is built at a gradient.

The reason the angle is there is to move the water as swiftly as you can to a drain. Stormwater is [perceived] as a waste.

And so not only are you trying to do something new and innovative [with LID] but you are going against the entire gradient of the city, the entire gradient of the world which has been engineered the same way for thousands of years. We’re doing something which on the surface seems very simple.

In reality it is a complex change to how we build our systems and integrate them into our cities.”

Philadelphia’s policy-first approach was initially quite disruptive. “We had a significant problem at first because there were no engineering consultants who really understood how to do this in an inexpensive and efficient manner,” says Neukrug, highlighting the opportunity for consultants to excel in a culture of policy change.

Neukrug viewed the initial five years of the plan as a chance for the industry – both public and private sides – to learn, building.ca

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Decorative planting

Hedges

Preserved hedges

24

Sodding

Deciduous trees

Existing vegetation

Hedges Planted berm Naturalized seed mix

COACH HOUSE CT.

UP

PE

RC H

UR

CH

VIL

Decorative planting

FAIRMONT CL.

Permeable stone interlock driveways

LE

RD

Bioswale

HONOUR OAK CRES.

Boulevard trees

“ Building LID in isolation is very expensive.

LID must be integrated into the urban renewal plan to be cost effective.

— Howard Neukrug

.

Existing vegetation

innovate and demonstrate together.

“There was a learning process for engineers, there was a learning process for planners. Moving down the line, the contractors who are building these facilities had to learn how to do this. Field engineers and contractors were the most skeptical [of the plan], but they are also the ones who know the most.”

Neukrug understands having the entire industry travelling a learning curve together was expensive, but also vital in accelerating LID adoption and the solution to the city’s combined sewer overflow problem. “Everybody learning something at the same time costs money.” But upon his retirement almost at the plan’s five year anniversary, Neukrug was seeing results as valuable stakeholder input was coming back to the utility, which may alter and improve the plan’s execution over the next and final 20 years.

ABOVE Wychwood at Upper Churchville, a 70-lot estate subdivision in Brampton, Ont., is one of the province’s first to provide stormwater management control entirely through low-impact development practices. The project includes lot-level controls, such as impervious surface reduction and permeable paver driveways, and development-level controls such as bioswale conveyance, infiltration trenches and landscaped rain gardens. These measures direct rainwater and runoff underground wherever possible, closely mimicking the pre-development hydrologic function of the property.

Policy-First versus Practice-First In contrast, Ontario’s approach to LID has been quite different and a less inclined learning curve is expected. In APRIL MAY 2016

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Rain gardens

fact, it is the absence of formal LID policy which seems to have informed a practice-first approach in Ontario from which formal policy will be developed.

“There has been very little incentive for developers to put LID in new developments,” says Christine Zimmer, senior manager of Water Protection and Restoration at Mississauga-based Credit Valley Conservation (CVC). “What that did, though, was allow us to engage municipalities and work at retrofitting existing urban areas. It allowed us to be involved in the design of LID, to be on site every day during construction and to inspect and monitor following construction.”

This under-the-radar experience also fueled the development of cutting edge LID tools which now distinguish the

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CVC as an expert throughout North America, such as their

Grey to Green series of retrofit guides and the Low-Impact Development Stormwater Management Planning and Design Guide developed in partnership with the Toronto and Region Conservation Authority. “[Retrofitting] positioned the municipality with experience and monitoring information that shows the performance of LID actually exceeds expectation and can work in clay soils and winter conditions, which are some of the misconceptions of LID application in Canada,” says Zimmer.

“Now that the province is coming up with guidance around new development, I think it will provide clarity for private developers, it will help with streamlining approvals, and getting everyone on the same page, understanding how we can incorporate LID into an urban setting,” Zimmer suggests.

“And we have confidence in the performance and maintenance requirements to have wide scale adoption.”

New Economies Zimmer sees Ontario’s pending new guidelines as a “great win” and opportunity to encourage new innovators like Bianchi in the development and consulting communities.

As with most new technologies, financial reward will come with maturity, but there are also rewarding opportunities in the new green economies which sweeping policy adoptions like these create.

“We’ve seen an increase in suppliers, different niche markets for landscape architects and engineers,” says Zimmer.

“We’ve been tracking Ontario providers of LID services and they have seen the number of projects and their revenues steadily increase. The work for these local green economy companies can’t be outsourced to other areas.”

In Philadelphia, Neukrug has observed similar reactions to his policy shift, but also understands the extensive timeline behind any major municipal redevelopment scheme.

What Philadelphia did to shorten this timeframe was institute stormwater fees based on property size and imperviousness, and in doing so, commoditized the rainwater. “We gave it a price, we gave it a value,” Neukrug says. “We also gave out credits. If you have a property that is five acres of concrete, it may be worth it to you to retrofit your property to better manage stormwater.” In implementing Green Cities, Clean Waters with its component parts — redevelopment regulations; parcel-based fee systems; grant and demonstration programs — Neukrug created new micro-economies

25

Winner in Brampton The CVC LID map, which locates 44 LID projects in Ontario from Sudbury to Ottawa to the Greater Toronto Area, contains only three residential properties and a total of 10 private projects, indicating the province’s portfolio skews to public lands. Zimmer highlights a 5.6-hectare, 70-lot estate residential subdivision in Brampton, Ont., as her latest success story. Completed in 2014 by Sequoia Grove Homes, Wychwood at Upper Churchville is one of the first developments in Ontario to use excluFor more on Ontario’s history with LID, including an interview with Tim Van Seters, manager sively LID practices for stormof sustainable technologies at the Toronto and Region Conservation Authority, visit building.ca water management. “In meeting all the environmental criteria and expectations through LID,” which developers, anti-developers or consultants can exZimmer notes, “there is no stormwater management pond. ploit for their benefit. In the five years since Philadelphia’s They were able to optimize the land use and include more Green Cities, Clean Waters plan has been in place, public and homes in its place.” private developers have added over 1,100 green stormwater Giulio Bianchi, Sequoia’s president, admits the financial tools to the landscape. return on the decision to use LID in this case turned out to be From Laggard to Leader minimal as the constructability of the LID features was more “We’ve benefited here in Ontario because we’ve had an opporchallenging than expected, but he does see the long-term tunity to learn from the United States and then build tools value in the approach. “I believe our low-impact development that fit Ontario and its cold climate,” says Zimmer. “In that represents the future of eco-conscious stormwater managesense, since we were also initially able to focus on retrofitment in the industry. It is a necessary step towards protecting ting, in some ways we have gone ahead of them. We are now our environment while continuing to build communities for getting calls from Alberta and [Canada’s] East Coast because future generations.” they are starting to see the need for LID.” As developers and consultants build local expertise in LID implementation Despite the differences between Philadelphia’s and Ontario’s adoption of LID, in either a policy-first or practice-first and create efficiencies in execution, the financial return of LID for developers approach, both suggest LID offers some short-term pain in Andrew Sobchak, P.Eng., like Bianchi will only increase. Now exchange for long-term gain. An initially steep learning curve is principal of with positive monitoring results over exists, and an uncomfortable redistribution of costs (or perToronto-based Tributary the past two years, the LID features of ceived costs) must occur, but once the industry normalizes Consulting and has after approximately five years of trial, the benefits of LID beWychwood are set to be assumed by the worked for 17 years in municipality, which Bianchi predicts come apparent: increased value of development properties the water resources will occur this coming fall. and more livable communities. b industry. building.ca

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Defixturing is the new fixturing

APRIL MAY 2016

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CHURCH ST.

UNIVERSITY AVE.

DUNDAS ST. W.

DOWNTOWN WEST 6.1 MILL. SQ. FT.

YONGE ST.

Market Size (inventory)

JOHN ST

The technology sector accounted for 38 per cent of Canadian office leases in the second quarter of 2015 and is having a major impact on the look and function of office space in Toronto. Until recently, the growing tech sector has pursued former industrial properties which had been transformed into Renovated and Converted ( RC ) office buildings. In Toronto, much of that demand has been satisfied by RC buildings in the Downtown West submarket. Given their popularity, it is no surprise that space in these buildings is becoming scarce and rents are beginning to rise.

Vacancy in Downtown West Class RC space hovers around 2.5 to 3.0 per cent and quoted gross rents in certain buildings are breaking $40 per square foot.

With limited options available, a handful of tenants have begun constructing their own creative office space in more traditional office buildings. Tech tenants are taking space in Class A and B towers in the downtown core and are building out their interiors to replicate those of classic RC buildings. In much the same way that landlords adaptively reused former industrial properties into RC office buildings, tenants are now adaptively reusing traditional interiors into creative premises. These offices boast exposed ceilings, finished concrete floors, and, where possible, exposed brick or cinderblock walls.

With brick and beam opportunities becoming limited, the tech sector is starting a new office trend in Toronto — defixturing.

DUFFERIN ST.

T

By Masha Dudelzak

GREATER CORE 19.4 MILL. SQ. FT. FINANCIAL CORE 24.4 MILL. SQ. FT.

KING ST. W.

LIBERTY VILLAGE 2 MILL. SQ. FT. FRONT ST. W.

LAKE ONTARIO

The defixturing of traditional office space is fulfilling tenants’ aesthetic demands at rents comparable to those of the RC buildings they originally targeted. Traditional Class A and B buildings offer additional benefits including proximity to the Financial Core, access to the PATH, better transit options, and ample parking.

Additionally, traditional office buildings have larger floor plates with layouts that adapt readily to efficient and creative spatial planning. Newer buildings also provide for more modern mechanical and electrical systems and better sound control.

The defixturing trend has even extended to some tenants in professional, scientific, and technical services as well as finance, insurance, and real estate industries. For example, advisory firm PwC has forgone drop ceilings in portions of its premises at 18 York Street and the Royal Bank of Canada has opted for exposed finishes at RBC Centre.

In response to the defixturing trend, a number of landlords of traditional office buildings are now catering to tenants’ demand for creative office space. For building.ca

16-04-21 8:27 AM

g

Office space can optimize the impact of non-profits 134 Peter St. (QRC West), owned by Allied Properties REIT, is located in the heart of Toronto’s Downtown West, and involved the restoration of two existing Class I buildings (134 Peter St. and 364 Richmond St. West) and the addition of a new, LEEDcertified component for a combined GLA of nearly 350,000 square feet.

example, Crestpoint Real Estate Investment has long marketed its traditional, Class B building at 111 Peter St. as having the potential for an interior conversion. Similarly, Oxford Properties Group foresaw this trend a number of years ago, marketing its Class A renovation project at 111 Richmond St. West as having creative premises with exposed ceilings and concrete floors, ultimately landing Google as its lead tenant. The concept was so well-received that only one tenant requested a drop ceiling to be installed. Allied Properties REIT, the largest owner of RC space in Downtown West, is also catering to tenants looking for creative space in modern buildings by constructing 11 floors of new office space overtop its RC building at 134 Peter St. (QRC West).

Lease negotiations typically revolve around fixturing costs and construction incentives, but the possibility of Masha Dudelzak defixturing traditional office space may provide the edge that is a research manager landlords are looking for and tenants are demanding. b at CBRE Limited.

Office space can be a lever for impact and increased organizational capacity, according to a new Not-for-Profit Office Trends Survey completed

by Colliers International’s Not-forProfit Advisory Group. “Non-profits are perpetually trying to maximize the return on finite resources while delivering on their purpose,” says Matthew Johnson, vice president and co-chair of Colliers International Notfor-Profit Advisory Group. “As a result, they should utilize any advantage possible to increase their impact and capacity. Office space is typically an overlooked resource that may have a direct impact on successfully achieving this objective.”

The Trend Survey identifies Access, Identity, and Collaboration as the three space factors non-profits need to consider in their pursuit of maximizing capacity and optimizing impact.

Access to public transit was identified as easily the most important factor by 42 per cent of the non-profits surveyed in choosing office space.

A five minute walk to public transit was highly preferred and offers a tangible return on investment in both increasing work capacity and attracting and retaining employees.

Identity and the ability to use space to espouse an organization’s identity were not on non-profits’ radar. Nonprofits ranked identity eighth out of a choice of 10 building attributes.

“Space promotes your image,” adds Johnson. “Office space plays a critical role in telling the story of a non-profit organization and its cause. Common words used to describe their desired office space were ‘efficient’, ‘modest’, ‘professional’, ‘warm’, ‘inviting’, and ‘welcoming’. These adjectives illustrate the need for non-profits to diligently review if their space is proving their desired first and lasting impression.”

The Report showed that 66 per cent of non-profits desired more collaborative work spaces versus just 26 per cent desiring an open work area.

Collaborative work space can be identified as informal meeting areas and kitchens where employees can easily gather to prompt discussions and exchange ideas. These open, collaborative meeting areas result in functional, flexible and productive space.

27

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28

Office asking rents in the Toronto downtown core

YONGE-UNIVERSITY SUBWAY

Average asking gross rent (up to five closest buildings)

STREETCAR

BLOOR-DANFORTH SUBWAY

TRANSIT STOP NAME

SUBWAY STATION

CLASS A CLASS B/C RENO./CONVERTED

$48 $42

GROSS ASKING RENT (PER SQ. FT.)

SPADINA

$51 $36

$51 $42

$45 $39

$46 $39

$43 $39

ST. GEORGE

BAY

BLOOR -YONGE

SHEROURNE

$48 $39

$45 $37

WELLESLEY ST.

ST. GEORGE

WELLESLEY

$44 $38

$45 $39

QUEEN’S PARK

COLLEGE

$44 $37

$50 $40

ST. PATRICK

$53 $40

$58 $40

COLLEGE ST.

$41 $42

DUNDAS ST.

DUNDAS

$54 $46

$50 $44

$51 $44

$48

$35

$37

$46

QUEEN ST.

QUEEN

PETER ST.

OSGOODE

JARVIS ST.

$53 BEVERLEY ST.

$51

$48 $41

CHURCH ST.

BLOOR ST.

$58 $37

$55 $44

$65 $43

$64 $43

KING ST.

KING

BAY ST.

UNIVERSITY AVE.

JOHN ST.

BLUE JAYS WAY

SPADINA AVE.

ST. ANDREW

$65 $40

SHERBOURNE ST.

$48 $36

YONGE ST.

$48 $35

FRONT ST.

UNION

“Creating this map is all about customer service and presenting data in a more concise manner that reflects how our clients look at the office market in downtown Toronto. Tenants don’t think in terms of where the Southcore or Financial Core starts and ends, but one of their key questions is how their staff get to work, so transit is one of the top decision making criteria for tenants looking for space,” says Werner Dietl, Managing Director of CBRE Toronto Downtown. “This map has really got clients thinking. At a glance, they can easily and quickly see the premium attached to being located close to Union [Station] and think, ‘I could potentially find savings if I move further north up to Bloor-Yonge yet still have access to great transit options.’”

APRIL MAY 2016

building.ca

Source: CBRE

Stop-by-Stop: Toronto transit office rent

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V I E W Walk With Joy ULI Toronto’s Executive Director hits the road to talk with GTA planning officials about what challenges they face.

By Richard Joy

Last fall I went on a big road trip — actually a series of little ones — that took me to the offices of almost every senior municipal planning official in the Greater Toronto and Hamilton Area. Other than talking up the Urban Land Institute’s global mission to advance urbanism, I had no specific agenda. I went to listen. 10 years after major provincial planning policy reforms, the introduction of the Greenbelt, and the creation of Metrolinx, what was the greatest urban development challenge facing them?

What emerged was a dominant theme: we are doing well at curbing urban sprawl, but we are not doing well at building homes and employment around our transit infrastructure. With plans to electrify most of our regional commuter rail network, the failure to develop these transit nodes could be a crisis of missed opportunity. Too many stations are little more than desolate parking lots with the narrowest of social or economic utility.

This is a fact corroborated by a recent study by the Neptis Institute that showed that while the rate of greenfield land consumption in the past decade is about a third of the previous, most development is going to areas without transit and outside the provincially designated Growth Centres. And the failure to develop our transit infrastructure, existing or planned, was the dominant theme of ULI Toronto’s major symposium this past fall.

There has never been a greater consensus that urbanizing our region around transit nodes is the most important land use challenge of our time. Economically, our region’s epic commute times (second worst in North America according to the Toronto Region Board of Trade) is robbing our economy’s productivity, to the tune of almost $11 billion a year. Socially, transit deserts and poverty are synonymous.

Environmentally, the leading contributing sectors to greenAPRIL MAY 2016

BLD Apr-May.indd 30

house gas emissions are buildings and transportation.

From a public health perspective, the inverse relationship between mobile, walkable, transit-supported neighbourhoods and obesity and diabetes rates is alarming.

Encouragingly, our governments are part of this consensus. Provincially, the decade-old Provincial Growth Plan, Greenbelt and Metrolinx Big Move plan are under review.

The expectation is that new policy rigor and infrastructure investment focus will align with the objective of transit oriented development. And the 2016 Federal Budget will direct historic levels of transit infrastructure funding toward the region, accelerating the pace of the provincial government’s ambitious transit investment agenda.

Against this optimistic backdrop, ULI Toronto recently launched its Electric Cities initiative. Its premise is that more enlightened planning policy and increased transit infrastructure funding are not enough to turn the corner on how we responsibly urbanize our region. Getting things rights at 30,000 feet is important, but it is on the ground, at the community level where land use successes are best achieved. The transit funding and policy renaissance underway will have no meaning if we can’t figure out how to get communities to support urban intensification around our transit nodes.

Another premise of Electric Cities is that communities will embrace urban intensification if they are afforded the opportunity to genuinely lead the visioning of their neighbourhood’s Richard Joy is Executive future. What is required to make their Director of ULI Toronto. community more liveable? More park Previously, he served as land, community centres or trails?

Vice-president, Policy and Better libraries? A community hub?

Government Relations at Increased retail? Improved streetthe Toronto Board of scaping? A growing city can achieve Trade, and was the these things.

Director of Municipal In the coming months I hope to Affairs and Ontario share with you how a commitment to (Provincial Affairs) at community respect can unlock the loGlobal Public Affairs. cal resistance we have come to underFollow him on Twitter stand as the biggest barrier to city @RichardJoyTO or email building. Our plan is to achieve this by at Richard.Joy@uli.org listening more. Listening is possibly the most powerful tool in the city building tool kit. Electric Cities emerged by listening to our urban planners. And its future will be defined by our ability to listen to community. b

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