9. RENOVATION OF 658.9m²(7,092 SQUARE FEET) AT 255 CENTRUM BOULEVARD

RÉNOVATION D’UNE SURFACE DE 658,9 m²(7 092 PIEDS CARRÉS) AU 255, BOULEVARD CENTRUM

COMMITTEE RECOMMENDATION

That Council approve a change in scope for the retrofit of the former Council Chambers / auditorium area and existing office space located within 255 Centrum Boulevard which was previously approved in Council Report ACS2010-CMR-REP-0028 and was specific to a lease with the Federal Government.

RECOMMANDATION DU COMITÉ

Que le Conseil approuve une modification à la portée de la modernisation de l’ancienne salle du Conseil, des alentours de l’auditorium et des locaux administratifs actuels situés au 255, boulevard Centrum, approuvée auparavant dans le Rapport au Conseil ACS2010-CMR-REP-0028 et qui concernait plus particulièrement un bail avec le gouvernement fédéral.

DOCUMENTATION

1. Deputy City Manager, Planning and Infrastructure report dated 27 March 2012 (ACS2012-PAI-REP-0008).

2. Extract of Finance and Economic Development Committee Minutes dated 3

April 2012.

Report to/Rapport au :

Finance and Economic Development Committee

Comité des finances et du développement économique

and Council / et au Conseil

27 March 2012 / le 27 mars 2012

Submitted by/Soumis par : Nancy Schepers, Deputy City Manager / Directrice municipale adjointe, Planning and Infrastructure / Urbanisme et Infrastructure

Contact Person/Personne ressource: Gordon MacNair, Director, Real Estate Partnerships and Development Office / Gestionnaire, Direction des services immobiliers, Bureau de partenaires immobiliers et du développement

(613) 580-2424 x 21217, Gordon.MacNair@ottawa.ca

Cumberland (19), Orléans (1)

Ref N°: ACS2012-PAI-REP-0008

SUBJECT:	RENOVATION OF 658.9m²(7,092 SQUARE FEET) AT 255 CENTRUM BOULEVARD

OBJET :	RÉNOVATION D’UNE SURFACE DE 658,9 m²(7 092 PIEDS CARRÉS) AU 255, BOULEVARD CENTRUM

REPORT RECOMMENDATION

That the Finance and Economic Development Committee recommend Council approve a change in scope for the retrofit of the former Council Chambers / auditorium area and existing office space located within 255 Centrum Boulevard which was previously approved in Council Report ACS2010-CMR-REP-0028 and was specific to a lease with the Federal Government.

RECOMMANDATION DU RAPPORT

Que le Comité des finances et du développement économique recommande au Conseil d’approuver une modification à la portée de la modernisation de l’ancienne salle du Conseil, des alentours de l’auditorium et des locaux administratifs actuels situés au 255, boulevard Centrum, approuvée auparavant dans le Rapport au Conseil ACS2010-CMR-REP-0028 et qui concernait plus particulièrement un bail avec le gouvernement fédéral.

BACKGROUND

The completion of the Shenkman Performing Arts Centre in June of 2009 enabled the performing arts groups to relocate from 255 Centrum Boulevard. The relocation effectively released 3,873 ft² of the building area on the ground floor (former Council Chambers) and 1,389 ft² of second floor space that had been functioning as dressing rooms and storage. Staff reviewed future City programming and operational needs for Orleans and forecast that this space would not be required for internal use in the foreseeable future. The disengagement of the arts groups created an external leasing opportunity to offset the City’s accommodation costs for 255 Centrum Boulevard.

The three (3) east end Councillors and the Member of Parliament (MP) were located in 3,219 ft² of ground floor space adjacent to the former Council Chambers. The office requirements were examined and the Councillors and MP were relocated to the 1,389 ft² on the second floor, thereby enabling the City to assemble 7,092 ft² of contiguous ground floor space. The total cost associated with this relocation was $225,000, which funds were drawn from the P3 agreement specifically for the tenant fit up for 255 Centrum Boulevard.

In September 2009, the Real Estate Partnerships and Development Office (REPDO) responded to a Request for Information from the Federal Government, Public Works Government Services Canada (PWGSC) regarding leasing approximately 7,000 ft² to establish a office space in the east end of the City.

A retrofit design was completed requiring the City to complete base building work as part of the tenant fit up. On 7 September 2010, Council approved report (ACS2010-CMR-REP-0028) that provided funding in the amount of $820,000 to be allocated to retrofitting the former Council Chambers and Councillor offices for the proposed Federal tenancy. Unfortunately, the business structure for the Federal office requirement was reassessed shortly after Council’s approval and this location was no longer required.

DISCUSSION

The City has been marketing the vacant space “as is” and has encountered some resistance given the dysfunctional design being the former Council Chambers.

Given both market and industry feedback, staff are seeking approval to use the funding previously approved to retrofit the ground floor to the base building in order to improve on marketing of the 7,092 ft²of ground floor.

The building is managed by Brookfield Lepage-Johnson Controls (BLJC) who are a party to the P3 agreement and are responsible to manage and deliver all building renovation projects on behalf of the building owner. The City will work with BLJC in the construction project.

The City is anticipating recovering its $820,000 investment through a ten (10) year Lease term. As well, the City will also use the incoming rent and operating revenue to offset the Cities overall occupancy costs associated with 255 Centrum Boulevard.

RURAL IMPLICATIONS

There are no rural implications to implementing the recommendation within this report.

CONSULTATION

This is an administrative matter, and as a result, public consultation is not required. The Landlord has been consulted and the P3 agreement terms and conditions have been reviewed.

The Councillors’ Offices for Wards 1 (Orleans), 2 (Innes), and 19 (Cumberland) have been notified of the project.

City stakeholders at the facility have been consulted and no City Operations will be affected.

COMMENTS BY THE WARD COUNCILLOR(S)

Ward Councillors in Wards 1 (Orleans), Ward 2 (Innes), and Ward 19 (Cumberland) have been consulted and support the recommendation within this report.

LEGAL IMPLICATIONS

There are no legal impediments to implementing the recommendation in this report.

RISK MANAGEMENT IMPLICATIONS

There are no risk management impediments to implementing any of the recommendations in this report.

FINANCIAL IMPLICATIONS

Capital funds are available with the approval of the recommendation in this report.

ENVIRONMENTAL IMPLICATIONS

There are no environmental implications with respect to implementing the recommendation set out in this report.

TECHNOLOGY IMPLICATIONS

There are no technical implications with respect to implementing the recommendations set out in this report.

CITY STRATEGIC PLAN

The recommendation in this report supports City Council’s strategic priorities: Healthy and Caring Communities, specifically the strategic objectives to improve parks and recreation and arts and heritage; and Financial Responsibility, specifically the objective to maintain the City’s financial position.

ACCESSIBILITY IMPLICATIONS

There are no accessibility implications to implementing the recommendation set out in this report. The City will be leasing the space to a third party for interior fit-up.

SUPPORTING DOCUMENTATION

Document 1 –Phase 1– 2^nd Floor – Ward and MP offices

Document 2 - Proposed Floor Plan – 1^st Floor

DISPOSITION

Following Council’s approval, the Real Estate Partnerships and Development Office will coordinate the retrofit with Infrastructure Services Department, Design and Construction.

Document 1 –Phase 1– 2^nd Floor – Ward and MP offices

Document 2 - Proposed Floor Plan – 1^st Floor