A new office building on the corner of 104th Avenue and 101st Street will house City of Edmonton workers. The new building will consolidate approxmately 2000 city staff under one roof.
Photograph by: Supplied, City of Edmonton
The city is moving about 2,000 workers into a new Katz Group partnership office tower in the first project confirmed for the downtown arena district.The 20-year lease with the Katz Group and WAM Developments will see the city occupy about half of a 27-storey tower at 104th Avenue and 101st Street.
Construction at the former Staples store site is scheduled to begin this spring and be completed by August 2016.
“I think it’s going to be an exciting addition to the skyline of our city,” Mayor Don Iveson told a Thursday news conference.
“It accomplishes a bunch of goals for the city. It consolidates a big part of our team, 2,000 people, into a single building.”
Oilers owner Daryl Katz originally wanted the tower to be part of the downtown arena deal, but that demand was dropped.
Iveson insisted the Katz bid, chosen out of 14 proposals, didn’t receive special consideration.
“City council would not have felt comfortable moving ahead without the fairness advisers who took a look at this project and independently verified this was a fair competition,” he said. “These are separate processes. The arena decision was not contingent on this one.”
The tower’s larger, more efficient floor size allows the city to reduce the space needed for each employee by up to 25 per cent, helping save an estimated $160 million by 2039.
In addition, the company is providing a $23-million credit for tenant improvements, sustainable development general manager Gary Klassen said.
“This was a completely open process with some of the leading developers in this city as part of that competition. The outcome today was the best deal.”
The second-place bid was “significantly” behind the winner, Klassen said.
The LEED gold building will cost more than $300 million, said Darren Durstling, president of WAM Developments.
The company will pay the city up to $10 million if it doesn’t initiate a further $500 million in development in the area by 2021.
This should be covered by a hotel, residential and retail projects, and a large underground parkade, expected to be announced within five months and be finished in about eight years, Durstling said.
“We’re trying to catch up. Our goal at one time was to have as much development as possible open at the same time as the arena. Now, it might be staggered.”
The final maximum price for the arena, which must be no more than $480 million, was supposed to be shown to city council next Tuesday.
But the item isn’t on the agenda. While Klassen wouldn’t indicate when it will be presented or explain what’s happening, he said they still expect to start construction in March.
Councillors voted 10-3 to approve the office deal following a December closed-door meeting.
Coun. Michael Oshry, one of the three dissenters, said the city would have saved money erecting the tower itself and then using it rent-free once the mortgage was paid off.
“It’s a disappointment for me … We make decisions that look good now, but 30 years in the future we will wish we owned the building.”
However, the Katz proposal was by far the best of the other options presented, Oshry said.
Office workA total of 3,000 people work for the city in nine leased or owned downtown buildings; this will be reduced to five sites when the move to the new facility is complete.
The city will occupy the second to 19th floors; the first couple of storeys will be used for acquiring building permits, paying taxes and doing other transactions, although the goal is to shift many of these tasks online.
The average net lease rate over 20 years will be $36 a foot. The city has an option for more space from the Katz-WAM partnership, which would be provided in another new building on the Baccarat Casino site.
Discussions are underway to determine the fate of outdated city-owned Chancery Hall beside Churchill Square.
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