EDMONTON – The city has announced plans to consolidate roughly 2,000 staff into a single building, which will go up in the future downtown arena district.
The tower, which is scheduled to be completed late summer 2016, will be built on the old Staples site on the corner of 101 St. and 104 Ave.
According to the city, the EAD First Street Building Corporation – a partnership between the Katz Group and WAM Developments – won the contract in a “fair and competitive” process that included 14 bidders.
It’s something the Katz group wanted all along, demanding early in the arena negotiations that it be part of the deal. The City turned that proposal down during negotiations, but wound up in the tower anyways through the competitive bid process.
“We expect the project to cost in excess of $300 million,” said Darren Durstling, of WAM Developments.
“We’ve put the necessary steps in place to minimize the city’s risk and protect taxpayers,” assured Gary Klassen, general manager of the city’s sustainable development section.
“As well, leasing allows us to keep our infrastructure dollars for other building projects, such as LRT, roads and libraries which provide more direct benefit to citizens.”
The decision wasn’t unanimous.
“It was the best deal of the lot, but I think the city should be owning their own building,” said Councillor Michael Oshry.
He voted against the deal, preferring to see the city construct a building of its own.
“We are the best tenant you can possibly get in the city, and we’re going to need that space for perpetuity, so I’m not sure why we didn’t build our own building and eventually have rent free once we’ve paid off the mortgage,” he said.
Mayor Don Iveson feels that tying up up to $300 million on constructing its own office tower wouldn’t be the best value for the city in the short to medium term.
“It would put us in the building ownership and management business, which is great in the first few years until the buildings get older,” he said, adding that leasing offers added flexibility.
Consolidation will result in cost avoidance of up to $5 million over the first 5 years based on efficiencies, the city says.
It currently leases space in five buildings and owns four others where city staff are housed. Three of the city’s major leases – HSBC, CN Tower, and Scotia Place expire – on or before March 31, 2016.
The agreement is for a 20-year lease for 350,000 square feet of space in the downtown tower. Shovels are expected to be in the ground this spring.
With files from Tom Vernon, Global News