Building April May 2012

PLUS: Global real estate investment Building in the North Going solar

K R O

E C

A P S

W www.building.ca April/May 2012 CDN $4.95

CoverNoBox.indd 1

60th Anniversary 1952 - 2012

12-05-18 7:42 AM

EVERY COMPANY IS UNIQUE. THAT’S WHY OUR ADVICE IS CUSTOMIZED TO FIT YOUR BUSINESS. Strong relationships with over 7,000 real estate and construction clients across Canada have proven our commitment.

BDO. MORE THAN YOU THINK.

Assurance | Accounting | Tax | Advisory www.bdo.ca

BDO Canada LLP, a Canadian limited liability partnership, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. BDO is the brand name for the BDO network and for each of the BDO Member Firms.

BDO.indd 2

12-05-17 10:11 AM

Contents

Features

Steady As She Goes / With the Eurozone debt crisis continuing to hang overhead like a cloud, the mood at the 2012 World Economic Forum in Davos, Switzerland was certainly somber. But, at least when it came to the global real estate investment market, there were hints that sentiment is improving. By Peter Roberts | PAGE 14 Creative Offices for Creative People / Two recently completed head office campuses signal the emerging importance of design in the competition to attract and retain the all-important creative workforce.

By Rhys Phillips | PAGE 16 Bank On It / Retail banks need a strategic approach to managing their facilities and operations if they want to generate a competitive advantage by reducing costs and enhancing efficiency. By Susan Anson | PAGE 22 www.building.ca

Contents.indd 3

True North, Indeed / The Churchill Northern Studies Centre demonstrates that energy efficiency and water self-sufficiency is possible even in areas as remote as northern Manitoba. By Richard Lay | PAGE 24 The New Old Energy / Acute public interest, solid government support and slick technological advances all collide to make now a great time to integrate solar photovoltaic power generation into property and business plans. By Andrew Sobchak | PAGE 26

Departments

Editor’s Notes | PAGE 5 Upfront | PAGE 7 Market Watch | PAGE 10 Legal | PAGE 12 Infosource | PAGE 29 Viewpoint | PAGE 30 Cover & above image: Pfizer Canada Inc. by Menkès Shooner Dagenais Letourneax Architectes. Photos by Stéphane Groleau.

April/May 2012 BUILDING 3

12-05-17 10:12 AM

Life after the back cover…

what’s on BUILDING.ca Read

GOING SOLAR

Profiling the risks and rewards of solar power in the building sector.

The New Old Energy

Step into the Sun

Acute public interest, solid government support and slick technological advances all collide to make now a great time to integrate solar photovoltaic power generation into property and business plans.

Thinking about installing a large-scale solar project? Here are the top four things to consider.

By Jason Gray

By Andrew Sobchak

Rooftop Risks

Solar Energy and Architecture

Installing a solar PV system on your building’s roof can be ‘green’ and profitable, but the project requires careful planning and awareness of the risks. By Vladimir Naoumov

An ongoing international survey is looking at the integration of solar energy systems and architecture in order to identify barriers that architects are facing in incorporating active solar technologies in their design. By Miljana Horvat

An Educated Approach to Solar Three schools across Canada have incorporated advanced solar technology as both renewable energy solutions and teaching tools for the budding eco-conscious generation. By Rhys Phillips

“In one hour, more solar energy hits Earth than our planet’s population uses in an entire year, which means our ability to capture and convert radiation into a useable format is the only barrier to an almost endless supply of clean electricity.”

Follow Attend Transforming & Revitalizing Downtown Summit / June 6-8 / Hamilton, Ontario Canadian Institute’s Forum on Collaborative Project Delivery / June 6-7 / Vancouver CaGBC National Conference and Expo / June 11-13 / Toronto Smart Grid Summit / June 12-13 / Toronto 2012 RAIC Festival of Architecture / June 13-16 / St. John’s 4 BUILDING April/May 2012

Online2.indd 4

Sign up for our weekly e-newsletter, full of fresh news, stories, videos, slideshows and more, only available on our website.

www.building.ca

12-05-17 10:12 AM

Volume 62 Number 2 Editor Peter Sobchak Art Director Stephen Ferrie Legal Editor Jeffrey W. Lem Contributors Susan Anson, Richard Lay, Peter Roberts, Rhys Phillips, Andrew Sobchak Circulation Manager Beata Olechnowicz Tel: (416) 442-5600 ext 3543 Reader Services Liz Callaghan Advertising Sales Greg Paliouras Tel: (416) 510-6808 Email: gpaliouras@Building.ca Senior Publisher Tom Arkell Vice President, Publishing Business Information Group (BIG) Alex Papanou President, Business Information Group (BIG) Bruce Creighton Building magazine is published by BIG Magazines LP, a division of Glacier BIG Holdings Company Ltd. 80 Valleybrook Dr. Toronto, ON M3B 2S9 Tel: (416) 510-6845 Fax: (416) 510-5140 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 (U.S. funds) Elsewhere: 1 year, $45.95 (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, 80 Valleybrook Dr. Toronto, ON M3B 2S9 or order online at www.building.ca For subscription and back issues inquiries please call 416-442-5600, ext. 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 e-mail 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 by Micromedia ProQuest Company, Toronto (www.micromedia.com) and National Archive Publishing Company, Ann Arbor, Michigan (www.napubco.com).

Association of Business Publishers 205 East 42nd Street Audit Bureau of Circulations New York, NY 10017

Member of Inc.

Occasionally we make our mailing list available to reputable organizations whose products or services can be of interest to our readers.

If you do not wish to be included, please e-mail or write to us.

Building is published six times a year. Printed in Canada. The content of this ­publication is the property of Building and cannot be reproduced without permission from the publisher.

H.S.T. #890939689RT0001 ISSN 1185-3654 (Print) ISSN 1923-3361 (Online) Glacier BIG Holdings Company Ltd. Customer Number: 2014319 Canada Post Sales Agreement #40069240

Proud member of

www.building.ca

EditorsNotes.indd 5

WE ALL GOTTA WORK SOMEWHERE

I

n this issue we profile two extraordinary examples of new office campuses that “signal the emerging importance of design in the competition to attract and retain the all-important creative workforce.” As important as the actual buildings are, of equal importance is their location in relation to the rest of the city or municipality, because those cities blessed with thriving economies and growing populations often find themselves struggling to balance land use requirements.

For example, rapid population growth within the Greater Toronto Area and the enactment of Green Belt legislation has placed employment lands under immense development pressure.

Because of the back-to-downtown migration, suddenly inner city industrial and commercial land has become far more valuable as condominium developments, and the powerful financial incentive to convert employment lands to residential or retail uses has created significant issues for the real estate industry, municipalities and the Province.

This contentious phenomenon was the focus of a recent event hosted by ULI Toronto called Unlocking Employment Lands. Spotlights were cast on many of the issues facing developers in this arena, but one of most compelling was the stark reality that the City of Toronto needs to operate from a much higher-level, long-term vision with an emphasis on creating and retaining jobs. Even though it is important to recognize that Downtown is not representative of the full Toronto spectrum, as Michael Williams, Toronto’s general manager of Economic Development and Culture pointed out, presently one quarter of all jobs in Toronto are on employment lands. The City needs to be able to preserve employment opportunities in the future, and ensure that new developments – even with potentially incompatible uses – don’t impact the industrial jobs that currently exist in the City.

This concept of industrial jobs raised a good question at the event: recognizing that we no longer live in an industrial era in Toronto, and there is little-to-no demand for industrial in the City, then shouldn’t the definition of employment change to be more than just industrial?

To this Williams pointed out that the City already has industrial jobs and is attracting new manufacturing in older suburbs. The key issue is that there are lots of important areas with established manufacturing which need to be recognized and supported. Cities do not loose employment lands overnight; it is a gradual process. Through the Official Plan Review the City needs to address the realities of the industrial shift but also find opportunities to support long term growth.

An area of the City often cited as a success story of this type of growth is ‘The Kings’ and Liberty Village on former industrial lands shouldering the downtown. It was here, says Ken Greenberg, an ex-planner for the city, that by introducing more relaxed zoning bylaws to allow for adaptive reuse of old mercantile buildings, the area evolved over 20 years into a thriving mixed-use neighborhood characterized by synergistically connected and mutually supportive industries with over 500 businesses supporting 7,500 employees. As the quadrant continued to mature, the market has naturally embraced plans to achieve higher value for the area. Developers are now looking at how they can work in tandem to capitalize on the highest and best use of surrounding blocks, through integrating mixed retail, employment opportunities and residential in a cohesive vision. Using them as examples, policymakers in various municipalities can learn from these areas on how to grow new neighbourhoods through synergy and combined uses.

Peter Sobchak Editor

We welcome your feedback. Send your questions and comments to psobchak@building.ca April/May 2012 BUILDING 5

12-05-17 10:13 AM

Schoech.indd 6

12-05-17 10:13 AM

UPFRONT First LEED building certified in the Yukon

Canada’s tallest condo tower just got taller TORONTO— Canada’s tallest condominium got taller recently thanks to a decision by the City of Toronto’s Committee of Adjustment.

In its decision, the Committee awarded Canderel three additional storeys at Aura, allowing the skyscraper to stand 78 storeys (273 metres) above historic College Park, at the northwest corner of Yonge and Gerrard. The three additional floors will mean approximately 50 new condominium suites, taking the total unit count in the tower to 985.

Aura was designed by Toronto-based architect Barry Graziani, of Graziani + Corazza Architects, and was launched in 2008. Construction on the development, which now stands at more than 1.3 million square feet, was started in the spring of 2010, while the site includes more than 180,000 square feet of prime retail space at the podium levels, plus additional recreational spaces. The retail is expected to open later this fall. www.building.ca

Upfront.indd 7

WHITEHORSE— The historical Taku Inn has been transformed into a highly efficient and sustainable building, and as a result received the Yukon’s first LEED certification. The renovations to the 1940s era building were envisioned

by Craig Hougen and Mary-Jane Warshawski of Taku Investments Inc. and designed by FSC Architects and Engineers prior to their acquisition by Stantec in October, 2011. The building houses Coast Mountain Sports and a number of office tenants.

The existing floors and exterior walls were structurally upgraded and insulated with mineral wool insulation, and all windows in the store are triple glazed, low E to maximize the insulation value.

A high-efficiency heating and cooling system coupled with independently controlled heat pumps lessen the load on the high-efficiency boiler. Low VOC paints, adhesives, carpets and plastic laminates also help to maintain a healthy environment. Low flow faucets, toilets and showerheads reduce water use, and construction waste was diverted from landfill by distributing the hotel’s furniture to charitable organizations and sending wood, metal and copper material to the local recycling centre.

BOMA Canada launches next iteration of building certification program TORONTO— The Building Owners and Managers Association of Canada (BOMA Canada) has updated BOMA BESt program, now referred to as “BOMA BESt Version 2.” It includes revised building assessments for four types of commercial properties including Offices, Open Air Retail plazas, Shopping Centres, and Light Industrial buildings, as well as updated references to industry standards and other helpful resources, expanded explanations for program requirements, and a host of user-friendly features to facilitate a more efficient application process. Version 2 also

includes the long-awaited assessment for Multi-Unit Residential Buildings.

Some of the notable changes to the content of the questionnaires include updated energy and water performance benchmarking scales to better reflect industry performance; and additional questions on existing building commissioning, site enhancement, innovative practices and technologies, commuting, and effluent management.

Some of the enhanced user-friendly features that have been introduced into the Program include a recertification function for all previous BOMA BESt certified buildings and transparent scoring to enable applicants to see how many points each question is worth.

Version 1 will continue to remain active for all applicants who are currently using this version to assess their buildings, however all new applications and recertifications will be required to use the newest version of the Program.

Electric vehicle charging stations, renewable energy systems, fuel cells all addressed in new Canadian electrical code TORONTO— CSA Standards has released the 2012 Canadian Electrical Code (CEC), Part 1. It is the 22nd edition of Canada’s primary standard for electrical installations and includes more than 180 updates and revisions. For example, tamper-resistant receptacles in child care facilities are now mandatory.

Unless otherwise defined by a regulatory authority having jurisdiction, this requirement applies to all facilities providing care to children seven-yearsold or younger.

Unique installation requirements for a variety of renewable energy systems including wind and fuel cells are addressed in the 2012 CEC. Hydrokinetic generation systems that convert tidal or ocean current into energy, and microhydro systems that are very small versions of hydro power stations that convert the energy of streams and creeks into usable electricity are also covered.

April/May 2012 BUILDING 7

12-05-17 10:14 AM

UPFRONT Lastly, existing requirements for solar power have been updated considerably to reflect new technologies, techniques, and calculations.

CSA’s 2012 Canadian Electrical Safety Code may also be considered a roadmap for the enhanced safety and success of electric vehicles. As electric vehicles become more commonplace, increased standardization has become critical to help ensure that charging infrastructure is properly addressed in terms of safety, capacity, and consistency. The 2012 CEC fulfills this need through new and enhanced rules addressing the safety, load calculation, and installation of electric vehicle charging equipment. This includes commercial applications for fleet vehicles and home installations such as a residential garage or car port.

Waste Management to establish Toronto’s most advanced facility for processing construction and demolition waste materials TORONTO— Waste Management announced it will establish the most technologically advanced facility in Toronto dedicated to processing waste materials from building construction and demolition (C&D) sites. Scheduled to 8 BUILDING April/May 2012

Upfront.indd 8

be in operation this fall, the plant, which was acquired in late 2011, will undergo $16 million worth of upgrades. The semi-automated single stream recycling plant will process an estimated 87,000 tonnes of C&D material in its first full year, getting WM closer to its goal to triple the volume of recyclable materials being processed by 2020. As the facility will be equipped to sort waste materials, contractors and developers will no longer have to separate at source, and this will result in increased recovery rates.

CaGBC offers new Sustainable Building Advisor program for first time in Ontario OTTAWA— Working professionals interested in sustainability and green building now have a valuable new learning tool at their disposal. The Canada Green Building Council (CaGBC) is launching the Sustainable Building Advisor (SBA) program: a comprehensive nine-month course with only two in-class sessions per month, making it ideal for professionals who want to expand their green building knowledge while working full time. This program, being offered for the first time in Ontario, is unique in that it requires no existing green building education or experience and is focused on practical, forward-thinking ways to design, construct and manage buildings that are resource efficient, environmentally responsible, cost effective, and healthy for all occupants.

The SBA course provides an opportunity for students from a variety of disciplines and knowledge areas to learn together, not just about the basics of green building, but how to approach sustainability from a wider perspective.

The CaGBC has selected Jeff Ranson as the Lead Instructor for the program in Toronto, being held at the Evergreen Brick Works. His work has included: managing the Green Building Festival; developing green building showcases for RBC’s Olympic Torch Relay and for CMHC’s EQuilibrium Zero Energy Homes pilot.

Upon completion of the SBA course, graduates earn the designation of a Certified Sustainable Building Advisor (CSBA) and will achieve 100 CE hours toward their LEED Professional credential maintenance. Canadian architects are also awarded core Continuing Education Learning Units in many provinces. The SBA course will also be offered by CaGBC in Quebec and Manitoba in the future.

NorthWest Healthcare Properties REIT acquires Québec City medical office building TORONTO— NorthWest Healthcare Properties REIT has acquired Centre Medicale de L’Hetriere, a 36,600 square foot medical office building Located along the western boundary of the Greater Québec City Area, for a purchase price of approximately $7 million.

Due to its dominant market presence, appealing design and ample parking, the property is fully leased to a quality roster of tenants that is anchored by a large medical clinic, Clinique Medicale CapRouge. Additional healthcare related uses include audiology, optometry, physiotherapy and dental, with a large Brunet pharmacy as a complementary retail use.

This investment will be the REIT’s fifth acquisition in Greater Québec City and its 15th asset in the Province of Québec. In a separate transaction, the REIT announced that it has closed on the previously announced acquisition of 40 Sunpark Plaza SE, a modern medical office condominium property in Calgary.

Ivanhoé Cambridge establishes presence in the heart of California’s Silicon Valley MONTRÉAL— Ivanhoé Cambridge acquired The Park Kiely, a major complex comprising 948 rental units in San Jose, California, in the heart of Silicon Valley. Located near the prestigious Stanford University campus, The Park Kiely’s “neighbours” www.building.ca

12-05-17 10:14 AM

UPFRONT include Apple, Facebook, Google and IBM. The transaction is valued at US$235 million, for the complex of 31 two- and three-storey buildings located on almost 1.4 million square feet of land. The property includes a small number of studios as well as one- and two-bedroom apartments and offers residents a range of services, including four swimming pools, sports grounds and a play area for children.

“This new transaction represents the second phase of our acquisition strategy.

It demonstrates once again our intention to acquire high-calibre buildings with critical mass, in excellent locations, that are attractive from a financial perspective over the short- and long-term,” stated Sylvain Fortier, president of residential for Ivanhoé Cambridge. In-depth study of the region’s economy concludes that significant job creation and the sustainable strength of the economy in the San Jose region create conditions that are conducive to development. As an additional benefit, this property falls within the area served by the Cupertino Union school district, one of the highestrated in California.

Groupe Germain to expand ALT Hotels in Canada MONTRÉAL— Groupe Germain announced a transaction of more than $80 million in share capital in the Fonds d’investissement ALT Canada s.e.c.

This transaction, which includes private investors as well as institutional investors such as the Caisse de dépôt et placement du Québec, Investissement Québec, La Capitale Financial Group and Industrial Alliance, Insurance and Financial Services, will enable Groupe Germain to add eight hotels across Canada under the ALT banner.

“ALT Hotels are part of a sweeping trend in accommodation, especially in Europe and Asia, and our research has clearly shown that this type of accommodation, which offers a design-atmosphere-décor equation at the best possible price, is lacking in Canada’s hotel industry. Our investors www.building.ca

Upfront.indd 9

have confidence in us to develop this hotel concept in Canada,” explained Christiane and Jean-Yves Germain.

“We have been Groupe Germain’s partners since the outset and firmly believe that ALT Hotels respond to an emerging need in the Canadian hospitality market,” said Pierre Thabet, representative for the initial investors’ group.

Dundee Kilmer to lead Pan Am Games Village development TORONTO— Infrastructure Ontario and Waterfront Toronto announced that Dundee Kilmer Developments has signed a fixed-price contract to design, build and finance the development that will be used as the Athletes’ Village during the Toronto 2015 Pan/Parapan American Games. The community has been designed by a team including Kuwabara Payne McKenna Blumberg Architects, architectsAlliance, Daoust LeStage, TEN Arquitectos and MacLennan Jaunkalns Miller Architects and will be constructed by EllisDon Ledcor PAAV Inc. In time for the Pan/Parapan American Games in 2015, Dundee Kilmer Developments has committed to complete: the next phase of West Don Lands infrastructure, roads and

public spaces, including new municipal services, Front Street promenade, local streets, and the reconstruction of Eastern Avenue and Cherry Street, which will include a new streetcar route; a new 82,000-sq.-ft. YMCA recreational facility, which will function as a training facility during the Games, then serve the West Don Lands and surrounding communities following the Games; George Brown College’s first ever student residence, which will be used during the Games to support athletes and officials, and will subsequently provide housing for 500 students; 787 units of market housing, which will be used temporarily for Games accommodation, then converted for permanent occupancy following the Games. Once converted, up to 100 units representing five per cent of the total residential units will be reserved for affordable ownership; 253 units of affordable rental housing, representing 24 per cent of the total residential units being built in time for the Games, which will be used temporarily for Games accommodation, then converted for permanent occupancy following the Games; additional accommodations and facilities required for use during the Games, including offices, administrative and ancillary facilities; and site preparation work necessary to support temporary Games facilities.

Dundee Kilmer will also provide facilities management services (grounds and building maintenance) during the Games, and will subsequently convert buildings for their legacy use. The fixedprice contract between Dundee Kilmer and the Province of Ontario is for $514 million, and will be paid in stages at significant construction milestones, to ensure the project’s on-time and on-budget delivery. The Province will recover approximately $65 million in development costs from future facility operators, for a total net provincial outlay of approximately $449 million. The arrangement reduces the cost of building the community by enabling Dundee Kilmer to also develop additional market housing post Games.

April/May 2012 BUILDING 9

12-05-17 10:14 AM

MARKET WATCH Canada’s office sector forecast for a buoyant 2012 TORONTO— The Canadian office market remains in good health with solid demand and the lowest vacancy level in 11 quarters, according to a new report

by Jones Lang LaSalle. At the end of last year, average vacancy rates dropped to 7.2 per cent, and by the end of 2012, this figure is expected to fall to levels last seen in 2008.

“The strength of the market is a testament to Canada’s stable economy and strong business environment,” said Jim Becker, president of Jones Lang LaSalle Canada. “Vancouver, Calgary and Toronto saw strong leasing activity while smaller markets such as Winnipeg, Hali-

fax and Québec City held their own with an uptick in leasing activity which reduced vacancy rates by 190 basis points in the aggregate.”

In 2011, more than 10.7 million square feet of office space was absorbed across the country, surpassing 2010’s total by 1.9 million square feet. Of the 3.6 million square feet of new supply delivered in 2011, less than a third is still available.

“This year we are going to see a race for space as new supply, especially for large tenants, becomes increasingly scarce,” said Becker. “The market will hold steady in the first half of the year but will pick up in the second half.”

In 2010, 60 per cent of the markets tracked by Jones Lang LaSalle were landlord favourable; now all markets tip to-

wards landlords’ favour. This could mean further rent hikes. According to the firm, the most expensive rental rates for Class A downtown office space can be found in Calgary at $34.00 per square foot, followed by Vancouver at $33.65 and then $28.00 in Toronto.

“Space is at a premium in many Canadian cities which is not the case in most cities in the U.S., which posted a 17.6 per cent average national vacancy,” said Becker. “Limited new supply across Canada will insulate the office market from economic uncertainty in the U.S. and Europe.” This year there are several cities with significant new offices under construction: Calgary tops the list with 3.4 million square feet, followed by Ottawa with 2.7 million square feet and then Vancouver with 1.5 million square feet.

In addition, new development announcements are imminent in Toronto with a possible nine office projects looking for lead tenants.

Canada’s Top Office Markets in 2012 Toronto: This year will be characterized by slow growth and an upward pressure on rents until new supply is announced.

Lack of speculative development as well as the growing tech and media-related industries will drive space demand. Tenants will seek sustainable space options and Toronto’s diverse economy will protect it from external economic risks including the crisis in Europe.

Montréal: Tenant leverage is beginning to dwindle and asking rents will increase until new stock returns to the market.

Landlords will look seriously at LEED certification to remain competitive and former industrial buildings will continue to be converted into office space in Midtown. Job growth in the natural resources industry as a result of Place du Nord will be another plus for the office sector. Tenants requiring large space will look to the suburbs as vacant blocks of more than 200,000 square feet disappear from the downtown market.

Québec City: Demand will continue from the public and insurance sectors. Vacancy 10 BUILDING April/May 2012

Market Watch.indd 10

www.building.ca

12-05-17 10:15 AM

MARKET WATCH levels will increase as more than 350,000 square feet of office space comes to market in 2012, but asking rents will rise as the market is perceived as under-valued.

Ottawa: Leasing levels in 2012 are expected to dip as both the public and private sector shed jobs. By 2013 more space should be available when new product returns to market and the federal government sells Class B office space to private and institutional landlords. The lack of public transport across Greater Ottawa will influence tenant decisions to relocate to the suburbs.

Calgary: With the expansion of the energy sector, Calgary is expected to outperform all other Canadian cities over 2012.

New office development is likely to be announced in the coming months.

Winnipeg: The market is in very good health with Class A office space demand set to rise along with rents which will go from $16.00 per square foot to more than $17.25. Mixed-use development will continue and residential growth will fuel retail and employment expansion.

Vancouver: Current market conditions with low vacancy rates and high demand will prevail owing to a healthy economy and lack of new supply in downtown Vancouver. Tenants can expect rising rents and moderate inducement packages.

Downtown space will diminish causing some tenants to move to suburban markets and the Broadway Corridor. Landlord-favourable conditions will persist until at least 2014.

Canadian construction should see steady workloads with low escalation in 2012 TORONTO— Diversification and continued strong investment in the transportation, energy, mining and healthcare sectors will help keep construction workloads steady with low escalation in 2012, according to BTY Group’s annual Market Intelligence Report on construction costs across Canada. www.building.ca

Market Watch.indd 11

“Even with lower-than-expected growth in the U.S., worries over European bailouts and slower growth in residential construction in most of the country, we expect reasonably healthy levels of activity across Canada,” said Joe Rekab, managing partner at BTY Group. “The story for 2012 is that strong energy, resource and infrastructure investment should balance a cooling housing market in almost every province, with the exception of B.C. and Alberta both of which will see gains in the housing market over the previous year.”

“The challenge for employers will be to attract and retain the best possible talent as the market heats up.”

—Rowan O’Grady, president of Hays Canada Among the report’s observations, Ontario will lead with an ambitious horizontal and vertical infrastructure program, but concerns over deficit spending could put some projects on hold. Oilsands investments of $24 billion in 2011 will fuel Alberta’s industry, and drive Canada’s strongest residential growth, and new multibillion-dollar mining projects and ongoing energy, healthcare and transportation projects will keep Québec busy. More than $10 billion in new potash projects will boost construction in Saskatchewan, and B.C. will see both strong residential activity and increased private sector investment in non-residential construction.

Following a strong first half in 2011 and a cooling in Q3, the consensus for Canada is lower than previously expected growth in 2012. The Bank of Canada will keep interest rates at historic lows, projecting that the economy will expand by only 1.9 per cent in 2012, and then improve to 2.9 per cent in 2013, with consistently low inflation. This will help keep

overall construction price escalation rates low in 2012, with variations by province.

Long-term trends are for continued strong investment in oil and gas, power and mining in provinces such as Québec, Alberta and Saskatchewan. Companies are projected to invest some $130 billion in Canadian mines alone from 2012 to 2017, according to the Mining Association of Canada. That will help construction workloads continue to expand after 2012. This strong flow of investment reflects Canada’s attractiveness on the world stage, which Forbes Magazine acknowledged by raising Canada’s ranking from No. 4 to No. 1 in its annual assessment of the Best Countries for Business.

This positive assessment of Canada’s construction outlook is reflected in a survey conducted by national recruitment consultancy Hays Canada, as part of their 2012 Compensation, Benefits, Recruitment and Retention Guide, which indicates that most Canadian construction companies are optimistic about the economy in 2012.

“There are particular bright spots in Construction, Information Technology, and Resources and Mining. The challenge for employers will be to attract and retain the best possible talent as the market heats up.

There continues to be a perceived lack of skilled candidates for new roles, and clear career progression plans which help retain employees. Effective talent management will help companies capitalize on business growth,” said Rowan O’Grady, president of Hays Canada.

Generally speaking, the construction industry is optimistic about 2012. Survey highlights include: 88 per cent of construction companies report a lack of skilled/ qualified candidates as the biggest challenge for 2012; overall salaries could reach pre-recession levels by Q2; 42 per cent of surveyed organizations in the construction sector say permanent staff levels have increased compared to the national average (33 per cent); 54 per cent of surveyed organizations in the construction sector believe that staff levels will increase in 2012 compared to the national average (39 per cent); in 2012, 45 per cent of salary increases in the construction industry will be between three and six per cent.

April/May 2012 BUILDING 11

12-05-17 10:15 AM

LEGAL

Annoying Parrots and Stubborn Green Grocers

By Jeffrey W. Lem and Odysseas Papadimitriou

Condominiums are the fastest growing segment of the housing industry. With them come inordinate powers with which condominium corporations can enforce the declaration, by-laws and rules of the corporation against renegade unit owners who refuse to comply.

M

uch ado has been made, certainly in the popular press, about the case of the expensive parrot, or, as The Globe & Mail so eloquently dubbed it, “A bird called trouble: The cautionary tale of the $40,000 parrot.” While the case of MTCC 744 v. Bazlinsky did involve a unit owner’s surreptitious maintenance of a pet parrot in violation of the condominium’s no-pet rules, the bird itself was no more than a red herring.

The Bazlinsky case really has nothing to do with parrots. At the heart of the case is the ability of condominium corporations’ ability to recover the costs it incurs in getting court ordered assistance chasing down unit owners who refuse to comply with the condominium’s declaration, by-laws, rules or other similar agreements.

In the Bazlinsky case, the condominium’s rules prohibited pets and the unit owner violated those rules by keeping a parrot, but the case could equally have been about balcony barbecues, outdoor storage, illegal parking, or any other of the plethora of things that can be governed by a condominium’s declaration, rules, by-laws and agreements, and that can be violated by a unit owner intent on non-compliance.

Section 134(5) of the Condominium Act, 1998 provides an extraordinary remedy to condominium corporations: If a corporation obtains an award of damages or costs in an (compliance) order made against an owner or occupier of a unit, the damages or costs, together with any additional actual costs to the corporation in obtaining the order, shall be added to the common expenses for the unit...

It follows naturally that, if the condominium corporation adds the damages 12 BUILDING April/May 2012

Legal.indd 12

and/or costs, as well as the additional actual costs to the common expenses, and these amounts go unpaid, the condominium corporation then has a lien against the unit under the Condominium Act and, ultimately, to realize upon that lien if the amounts owing are then still not paid.

The purpose of Section 134(5) is to protect condominium corporations (and, indirectly, all innocent unit owners) from the high costs of litigating against the few wayward unit owners who chronically or blatantly refuse to abide by the Act and/or the terms of the condominium’s declaration, by-laws, rules and agreements.

Introduced in 2001 as part of sweeping reforms to the Condominium Act at the time, Section 134(5) was intended to ensure that, regardless of what damages or costs that a corporation may be awarded by the court in a compliance action against an owner, that condominium corporation would be able to add its additional actual costs to the “bill” payable by the unit owner, then lien in respect of that bill if the unit owner does not pay. Typically in litigation, even if a party is victorious, it only gets to recover from the losing party a relatively modest portion of the actual legal costs incurred to mount the litigation. Rather than suffering the indignity and costs of actually winning the law suit against a non-compliant unit owner and then finding itself still financially prejudiced by having to pay for the legal fees and other litigation costs, Section 134(5) is intended to allow the successful condominium corporation to recoup all of its actual costs incurred in dutifully enforcing the condominium’s declaration, by-laws, rules and agreements.

The Bazlinsky case seems, at first blush, to eviscerate the operative provisions of

Section 134(5). In Bazlinsky, the condominium corporation incurred total actual costs of just over $40,000 to obtain a court order against the unit owner forcing the removal of the parrot from the unit.

However, a judge in Ontario’s Superior Court re-assessed the reasonable costs in the litigation to be merely around $6,500, rejecting the corporation’s claim for approximately $34,000 of legitimate additional actual costs under Section 134(5).

Now, the Bazlinsky case is not the first time the courts have grappled with and pared back the potentially extraordinary scope of Section 134(5). In the 2005 decision in MTCC 1385 v. Skyline Executive Properties the Ontario Court of Appeal considered Section 134(5) and concluded that the additional costs that a condominium corporation could add to common expenses for the unit was limited only to the costs up to and including the actual court order (and subsequent cases have included maintaining such court order against appeals), but expressly excludes additional costs incurred by the condominium corporation in then trying to enforce that court order.

Although Section 134(5) was probably never intended to be read so narrowly, it is now universally accepted that, until there is further law reform expressly changing this situation, Section 134(5) cannot be extended to include additional actual costs incurred by a condominium corporation to enforce a court order. At the same time, the Court of Appeal also made it clear in Skyline, that Section 134(5) means what it say, and that it takes effect after a judge hearing a compliance application awards any damages or costs against a recalcitrant owner.

In a 2011 case, TSCC 1633 v. Baghai Development Limited and Rabba Fine Foods – a www.building.ca

12-05-17 10:16 AM

LEGAL case conceptually similar to the Bazlinsky case – a unit owner was found liable for having breached the corporation’s declaration, by-laws and rules by hogging-up sidewalk space intended to be open common elements. The Ontario Superior Court considered Section 134(5) and concluded that, yes, the condominium corporation was entitled to all of its “additional actual costs” required to obtain the court order, but then went on to say that Section 134(5) could not then be interpreted as then allowing the condominium corporation to go on a legal rampage and incur wildly outrageous legal bills under the protection of Section 134(5). As explained in the Rabba Fine Foods case, “...section 134(5)...does not allow the [condominium corporation] to authorize its counsel to expend any amount and then ask to be completely indemnified for costs that are otherwise disproportionate and unreasonable. The Court retains its discretion to determine what amount of costs is fair and reasonable to award...” The Court in the Rabba Find Foods did exactly that – it exercised its discretion to drastically reduce the legal fees that the condominium corporation could charge back to the unit as a common expense, all to reflect what the court thought was disproportionate and unreasonable legal fees incurred as part of a “scorched earth” litigation strategy. This kind of über-aggressive litigation has come under fire before -- the Ontario Superior Court of Justice reached a similar conclusion in the 2010 case of Peel Condominium Corporation No. 452 v. Jaworowski.

It is not really clear how the judge in the Bazlinsky case came to her conclusion. On the one hand, she cites the rule in Skyline implying that the lion’s share of the additional actual costs were, in fact, enforcement costs incurred after the court order had been obtained. It is hard to reconcile this with the facts in the case.

On the other hand, she also concludes that the “value of the work performed on a solicitor and client basis is no more than $6,500”, but this too is hard to reconcile with the facts in the case since there is no real discussion in Balzinsky of a deliberate “scorched earth” litigation strategy or any of the other signs of overly aggressive litigation that the judges in Rabba Find Foods and in Jaworowski carefully laid out as the

grounds for their decisions.

134(5) but, of course, by their very nature, In the end, neither the Bazlinsky case these “successful” applications of Section nor the Rabba Fine Foods case is likely going 134(5) rarely get reported. These two to be quite as disastrous as some condo- new cases on Section 134(5) do, however, minium managers and boards might be warn condominium managers and their prone to think. These cases do not wholly boards that such litigation cannot be done eviscerate Section 134(5) and replace it so recklessly or so aggressively so as to be with a judge’s discretion as to what might perceived by the courts as some sort of be fair under the circumstances. In fact, “scorched earth” strategy giving rise to both of these cases actually affirm, at least unreasonable and disproportionate legal in principle, that, in addition to whatever bills. the court may otherwise award the condominium corporation by way of damages or Jeffrey W. Lem is a partner in the costs, the condominium corporation can Toronto/Markham offices of Miller still charge and lien for legitimate “addiThomson LLP, a national law firm tional actual costs” (and this includes addiwith 11 offices across Canada. Jeffrey tional actual legal costs on a solicitor and is Certified by the Law Society of client basis), so long as they were incurred Upper Canada as a Specialist in in order to obtain a compliance order Real Estate and can be reached at jlem@millerthomagainst the offending unit owner (and son.com. Odysseas Papadimitriou not in enforcing that compliance order). is an Associate at Miller Thomson Furthermore, there are overwhelmingly LLP, specializing in all aspects of more cases where condominium corpo- condominium law, including docurations are indeed successful in remain- ment preparation, compliance issues, RightChoice_5-25x5-25_PRESS.pdf 1 06-09-11 15:59and corporate governance. ing financially whole because of Section operations,

C

CM

MY

CY

CMY

K

www.building.ca

Legal.indd 13

Right Choice

Co

io

Gr

d

nfer ee

Y

n

M

nstruc

t

The

PROFESSIONAL. QUALITY. SERVICE. Tel 905 763 4200 Fax 905 763 6766

70 East Beaver Creek Road, Unit 42 Richmond Hill, ON L4B 3B2

For more information go to our website www.greenferd.com or call Scott Hledin at 416 562 1412 | email sh@greenferd.com April/May 2012 BUILDING 13

12-05-17 10:16 AM

Steady as she goes With the Eurozone debt crisis continuing to hang overhead like a cloud, the mood at the 2012 World Economic Forum in Davos, Switzerland was certainly somber.

But, at least when it came to the global real estate investment market, there were hints that sentiment is improving.

By Peter Roberts

S

ince the recession, the business community has undergone significant changes including financial reforms, technological advances and shifts in global economic power. So it was fitting that this year’s theme for World Economic Forum in Davos, Switzerland was “The Great Transformation: Shaping New Models.” With the Eurozone crisis dominating the agenda, and the explosive growth in Asia and opportunities in Latin America filtering into conversations, I was eager to gain insight into what real estate decision-makers were thinking.

Shaping investor decisions

During my discussions in Davos with clients, business leaders and investors, it was clear that real estate is still viewed as a core asset class. But the economic environment has certainly dictated investor prudence. Traditionally, real estate investors have favoured large, transparent, mature markets for their real estate dollars. In fact, our firm’s research paper, A New World of Cities, confirms that just 30 cities account for half of the world’s real estate investment volume. Despite any hesitation about Europe, London attracted the greatest amount of activity, with $24.3 billion (all figures U.S.) of direct investment in 2011. The top five cities, which also included New York, Paris, Tokyo and Singapore, collectively drew almost a quarter of the world’s total investment volume.

While we have seen a few emerging markets from the BRIC countries rise up the ranks – including Moscow, Shanghai and 14 BUILDING April/May 2012

Global Realestate Investment.indd 14

São Paulo – the top 30 cities have been consistent over the years. This highlights the desire for deep, liquid and diversified markets with large pools of tradable assets. However, we are seeing a change with a strong flow of real estate capital into Asian cities. When we started our study in 2004, only Tokyo and Hong Kong made the top 10. Last year, however, half of the cities in the top 10 were in Asia, including Tokyo, Singapore, Hong Kong, Seoul and Shanghai.

The rise of the dragon

During the World Economic Forum, I attended sessions that covered the rapid urbanization of China and the transformation of its cities via an unprecedented program of development and modernization. Our research corroborates this transformation and states that the world’s 10 fastest growing large cities, in terms of GDP, are all in China. In the next decade, some of these cities, including Chongqing, Tianjin and Chengdu, will feature prominently on the real estate investment map.

For now, though, the region falls behind EMEA and the Americas in terms of total real estate investment volume. Last year, $411 billion was channeled into global real estate, up 28 per cent over 2010. In the Americas, $155 billion was transacted, representing an increase of 60 per cent. In EMEA, the figure was $164.8 billion, a 20 per cent year-on-year rise. Investment volume in Asia Pacific, meanwhile, jumped six per cent above 2010’s level with $91 billion in transactions. Japan, China and Australia remained the largest investment markets www.building.ca

12-05-17 10:16 AM

Global Real Estate

across the region. Foreign investment drove deals in Australia, while acquisitions in Japan, China, Hong Kong and Singapore were led by local investors. More than half of the region’s acquisitions were executed by corporations (owner-occupiers), financial institutions and REITs.

highest volume since 2007. Buyers were a mix of sovereign wealth funds, sovereign pension funds, insurance companies and high-net-worth individuals, while sellers were predominantly German open-ended funds and REITS that were disposing of non-core assets.

The Americas

What’s next in 2012?

The success of Latin America is not only important to North America but also to our sector. In Davos, it was reassuring to hear President Felipe Calderon of Mexico acknowledge the importance of Mexico being viewed as a positive investment destination. With more than 80 per cent of the country’s exports going to the U.S., a prosperous Mexico is important to companies throughout the Americas – indeed, throughout the world. For now, Mexican cities do not feature in our top 30 destinations for direct real estate investment. But by 2020, Mexico City, along with other cities in Latin America, will make our top 50. Rio de Janeiro and São Paulo reached the top 30 over the past two years, and we expect their position to continue to rise in the coming years.

In the U.S., New York City, Washington D.C. and Los Angeles are the only cities on the list of top 10 investment destinations in 2011. Back in 2004, the list contained six U.S. cities: New York City, Washington D.C., Los Angeles, Chicago, Atlanta and Dallas. This is not to say that investor interest has waned in the U.S.; nearly half of the world’s modern office stock is located there, and a third of all commercial real estate investment takes place in U.S. cities. By 2020, 11 U.S. cities are expected to feature among the world’s top 30 largest cities by GDP. Six of the top 30 fastest growing cities in terms of absolute GDP will be in the U.S., including New York City, Los Angeles, Chicago, Washington D.C., Dallas and Houston.

Calgary made the world’s top 20 fastest growing mature cities list. This reflects the strong economic conditions expected through 2020. Calgary’s oil and gas industry and the city’s growing role as a centre for company headquarters will continue to develop over the next decade, and this in turn will fuel investment in the city’s real estate and infrastructure. Toronto has been a major focus for real estate investors and last year it became the 11th most popular city in the world for direct commercial real estate investment. The other Canadian city to make the top 30 investment list was Calgary, which took the 27th position.

What about Europe?

It was appropriate that German Chancellor Angela Merkel opened the conference. Her prose was carefully crafted to inject a message of hope and to assure listeners that a solution to what ails the region is imminent. Despite last year’s turmoil in what has been coined the ‘PIGS’ (Portugal, Italy, Greece and Spain), real estate investment volume in the region was robust. The office sector accounted for the lion’s share of investment dollars, but retail assets registered the www.building.ca

Global Realestate Investment.indd 15

The mood this year can be characterized by the familiar phrase ‘cautious optimism’ and we are forecasting a transaction volume level on par with 2011. Concerns over the Eurozone debt crisis are causing investors to focus on high-quality assets with sustainable income. With the news that a number of high-profile European banks have either closed or will close their books to new commercial real estate lending, and with the implementation of Basel III, new debt and refinancing will become more challenging in 2012. In the U.S., we expect the market to be heavily sentiment-driven and dependent on economic and employment growth, which so far are proving to be positive. Barring any financial systemic shocks, we expect 10 to 15 per cent growth in transaction volume in the Americas region this year.

For Canada, 2012 is expected in many ways to mirror the activity seen in 2011. REITs continue to have access to cheap cash following a record year of capital raising that put them in a strong position for strategic growth in 2012. These financial conditions are likely to remain favourable through 2012. In 2011, Jones Lang LaSalle recorded $18.5 billion worth of real estate investment across Canada and we expect an equal or slightly higher overall volume in 2012. But, not surprisingly, investor perception for potential capital value appreciation will shape Canada’s investment market in 2012.

With Asia Pacific’s growth and stability, all classes of investors will be chasing assets in the region. Last year, there was a slight dip in the appetite for Asian funds from U.S. and European investors; we expect this trend to reverse in 2012.

We are certain that the weight of capital committed to commercial property shows that it remains an attractive asset for many investors. We are also certain that the real estate investment map will evolve over the next decade. Investors will diversify their portfolios and begin to search for new cities for their investments in Asia Pacific and second- or third-tier cities in the West. We also expect emerging markets in Latin America to gain ground as they grow and their economies stabilize.

For now, we know that investors will play it safe in 2012 and channel their capital into well-located, occupied assets in primary and leading secondary markets.

Peter Roberts is Chief Executive Officer of Jones Lang LaSalle’s Americas region, where he is responsible for strategic planning, tactical oversight and senior-level management for North and Latin American operations and 11,800 employees located in seven countries. He is also a member of the firm’s Global Executive Committee.

April/May 2012 BUILDING 15

12-05-17 10:17 AM

CREATIVE OFFICES for CREATIVE PEOPLE Two recently completed head office campuses signal the emerging importance of design in the competition to attract and retain the all-important creative workforce.

I

By Rhys Phillips

t has been a decade since Richard Florida’s book, The Rise of the Creative Class, popularized an epochal shift that radically redefined the work relationship.

His thesis on how rapidly-growing and broadlydefined creative labour was replacing industrial work galvanized an already emerging body of thought.

Despite critics, the major thesis of his book and later his Whose Your City? has been the shift from labour moving to investment to investment moving to where the creative worker wants to live. This highlighted the ability of cities or regional “states” to attract and retain the new creative class of workers, and the source of much debate by politicians and urban planners. Less noticed, if academic reviews of the subject are to believed, has been Florida’s and others’ comments on the importance of rethinking how a workplace’s physical environment contributes both to the creative thinking process and the ability to attract and retain the best and brightest thinkers.

This absence seems surprising. Over 70 years ago, Frank Lloyd Wright’s S.C. Johnson Wax Company Administration Building and Research Tower in Racine, Wisconsin was designed to increase creative interaction and frequent casual communication as well as maximizing natural light and 16 BUILDING April/May 2012

Pfizer/Honda.indd 16

exterior views. The result was a 15 to 24 per cent increase in productivity and powerful employee buy in. Wright’s building also foreshadowed how the increasing complexity of corporate branding in the 21st century could be supported by architecture and design. Today, where once a corporation’s brand was largely reflected through its product, it now incorporates how it treats its workers, often demonstrated by the importance of “Best Place to Work” and “Best Diversity” lists. The quality of the physical workplace plays back into the employer-of-choice dynamic while commitment to green design signals a commitment to community sustainability. In 1979, the president of S.C. Johnson credited Wright’s building with garnishing the company international respect as “a symbol of quality that translated to their products and the working environment as well,” states blogger L. Younce.

Yet while the Dot.Com era begot countless articles on “cool and funky” office environments, little work seems to have been done on the relationship between physical office design and creativity.

Thomas Davenport reported in his 2005 article “Why Office Design Mattered” that the effect of the physical environment on knowledge worker performance is much discussed but little concrete is known. A year later, Gerald Steiner of the University www.building.ca

12-05-17 10:17 AM

Creative Offices

of Graz agreed, adding that most traditional forms of physical work environments do not support innovative thinking. As late as last year, Dutch and Turkish management professors Jan Dulab, Canan Ceylanc and Ferdinand Jaspersb concurred, as did Yuri Martens of the U.K.’s Bartlett School of Architecture.

Davenport found that while knowledge workers prefer closed offices, they communicate better in open ones, collaborate extensively and with colleagues in close proximity need an office environment but also require space to concentrate. Martens documents substantial research supporting these findings.

Creative workers, he states, want workplaces that serve as a corporate statement, have an experimental component with visual stimulations and a wider and richer range of work settings including more shared space. Steiner found that creative workers place special emphasis on informal communication facilitated by “recovery areas equipped with coffee machines” while colour (both calming and stimulating), views of the landscape, access to natural light, and physical branding plays a role.

In the excellent 2009 monograph, How the Workplace Can Attract, Engage and Retain Knowledge Workers by 360, Steelcase’s innovative research unit, the relationship between workplace and brand is suggested by the importance of workplace perceptions for Generation Y, both how an organization responds to their working preferences and to their values. In a subsequent study, Brand, Culture and the Workplace (2010), 360 turned this around, noting that workplace perception is a critical lever in supporting brand and culture change yet few companies believe their work environments reflect their brand well. While “clan” values best underlie a creative work culture, hierarchy and silos dominate the physical workplace.

Like Pfizer and Honda, companies must “begin to define space based on the brand intent.”

Opposite: The abundance of glass opens the corporate identity of Pfizer Canada to those driving by. Above: A blister packs motif, a key feature in biopharmaceutical production, was used on the building façade, walls and furnishings. Below: An alveolate façade structure creates a variety of textures that responds to changing light, and the blue of the Pfizer logo occurs both externally and in the core of the building.

PFIZER

Pfizer Canada Inc. is part of a major global biopharmaceutical company focused on the development of both innovative and generic medicines as well as other quality of life products.

With specialized operations and distribution centres across the country, its Canadian headquarters in Kirkland, Qué. is a four-building head office campus stretching along Autoroute 40 on the western end of Île de Montréal. The refreshed campus not only consolidates head office employees but also provides a more dynamic and appropriately high-tech physical image while supporting a new office culture that better reflects its creative, team-oriented workforce. Designed by Menkès Shooner Dagenais LeTourneux Architectes with co-founder Anik Shooner as project architect and partner Jean-Pierre LeTourneux as principle designer, the $22-million project involved updating two existing buildings, the installation of offices in an adapted warehouse, the complete gutting and redesign of the east office block and the introduction of a commons area to link all these elements. www.building.ca

Pfizer/Honda.indd 17

The major challenge, says Shooner during a tour of the complex, was twofold: a desire to physically reinforce a highend corporate brand while “densifying” existing work spaces to accommodate new employees. But the latter also meant going against an office culture of single, enclosed 12-ft. by 12ft. offices for the research, marketing and other professional April/May 2012 BUILDING 17

12-05-17 10:17 AM

Creative Offices

Above & below: Flexible and open areas for both work or socialization have been developed as well as private rooms, break areas with a view over the gardens and work rooms located on the periphery of the working areas. Photos by Stéphane Groleau

staff that make up the workforce. Pfizer’s own corporate values state that it is committed to “offering a place to work that helps employees address their individual needs.” So there needed to be buy-in in order that this initiative would also improve team spirit and enhance the creative work processes of what Shooner calls a “highly educated, gold-level staff.”

Upgrading a Corporate Brand

The Kirkland to Montréal stretch of Autoroute 40 has long provided a showcase of corporate architecture that evolved as buildings wore out and architectural styles changed. The dark brick and ribbon windows of Pfizer’s 1970s campus buildings lacked a strong, 21st century presence. Most significantly, the aging two-storey east block required a complete envelope 18 BUILDING April/May 2012

Pfizer/Honda.indd 18

replacement to be augmented by the insertion of a new informal “linking” volume. This new addition was to house a healthy food cafeteria and serve as an alternative option for casual “bistro session” meetings and events. The existing east building had anything but a high tech presence and failed to reflect Pfizer’s transparency value, both core components of its corporate brand. What the client wanted, says Shooner, was finesse but a soberness and visibility that reflected a state-ofthe-art facility that signaled the Pfizer campus as “the” place to work. And all this had to be legible to drivers speeding by on Autoroute 40.

The solution was a sleek, horizontal and transparent glass box that was then layered to create a rich, textured surface using a cheeky product reference to create a “perceived” sense of dynamic movement and constant change. First, the ground level of the now-transparent box was fronted by a march of vertical steel blades, each blue on one side and dark gray on the other, which leads from the parking lot to an extruded glass entrance box. This transparent cube is framed on its west by a solid plane in the firm’s trademark blue. Shooner describes these elements as a sort of origami composition, each component folded into the other.

Above that, an elaborate ribbon screen of Québec aluminum stretches along the full Autoroute façade. By mimicking the horizontal massing of the original brick spandrels and sunken ribbon windows of the central and western pavilions, the older, rather tired but still functional façades of these buildings are given new life without additional cost. The three-dimensional punched screen, what Shooner calls an “alveolate” structure after the honeycomb shape of a beehive, generates a multitextured surface that changes from silver to dark bronze to brilliant gold as light and time of day changes. Thus, when seen from the freeway, its surface appears alive and in motion.

While the screen’s pattern of punched openings reproduce both the scale and the texture of the local brick, its inspiration comes from the ubiquitous blister packs used for medicines.

Not incidentally, it also acts as a sunscreen that modulates light and reduces solar gain. A graphic pattern derived from the screen is repeated inside in carpets and, most dramatically, in a laser cut metal wall with backlit blue glass.

Pfizer required that the inserted, single-storey commons not be one big open space but include varied spaces with different ambiences. Thus it includes a bright, fresh and very stylish cafeteria that slides into a bistro-style “walnut box” that doubles as a larger but informal meeting and event space.

These two spaces swing around an eye-popping bistro nook that uses the signature graphic in black and white that hints at a high tech version of Channel’s classic suit pattern. Floor to ceiling glazing at the west and east ends of the commons allows for plenty of natural light as well as visual contact with outside terraces. In the summer, these protected courtyards with shade trees become a refuge and another informal gathering spot for creative discourse. www.building.ca

12-05-17 10:18 AM

A New Creative Workplace Model

The internal design and organization of the revitalized block was dramatically changed. Where once the occupancy ratio between open areas and closed offices was 44:56, the new ratio is 85:15. The design, says Shooner, incorporates a common area concept that encourages collaboration and teamwork.

This is supported by new communication technologies that allow employees to work in multiple locations with complete access to electronic files. All workstations have low dividers and come equipped with small mobile filing cabinets. Both lateral and transversal traffic corridors ensure fluidity and ease of movement between groups. “The design concept,” the architects have written, “is based on the enhancement of the democratic access to natural light in order to ensure that it illuminates each work station.”

The high visibility cubicles are but one component of the full work environment: open area worktables; clusters of arm chairs; high “bistro” bench tables facing out to the landscape; glazed meeting rooms along the interior spine; and small “telephone booths” for private calls are all interwoven. Slick, trendy but comfortable coffee rooms are distributed throughout the floor plan and are intended as informal areas for consultations, brainstorming and even individual work. Not incidentally, many of the walls are drenched with colour-saturated artwork with an emphasis on large landscape canvasses from representative to Impressionist to boldly abstract.

As Davenport’s research indicates, creative workers typically start by being skeptical of such open working arrangements but rapidly concede with experience that it is the approach most conducive to creative communication, and Shooner found this dynamic at work at Pfizer. To mitigate initial opposition, the architects provided an almost fulltime communications liaison. “This was key to managing the process because we could share information and explain why things were being done the way they were; this generated a high level of teamwork in finding solutions.” The young generation, she continues, is used to multi-variant working processes. Despite the “generational conflict” popular in the media, academic research actually suggests both Baby Boomers and Generation X-ers are quick to appropriate Generation Y’s flexible approach to work. In Pfizer’s dynamic Established Product Area, for example, most workers now have no assigned space/desk areas.

And how well is the new campus working as a creative workplace? According to Pfizer’s Canadian president at the time of the inauguration, “the upgrading of our facilities… [has] enabled us and will continue to enable us to attract high-quality employees.” The company recently made Postmedia’s Canada’s Top 100 Employers list for 2012 with an A rating for physical workplace as well as for its ability to attract and retain quality employees. At a more practical level, Shooner concludes, the quiet enclosed spaces are used less and less while meeting areas thrive as do the “busy social places.” www.building.ca

Pfizer/Honda.indd 19

HONDA

Honda Canada’s new three-building campus sits adjacent to Highway 404 north of Toronto in the suburb of Markham. The award-winning campus includes a four-storey, 138,000-sq.-ft. head office building, a 71,000-sq.-ft. technical centre for research and development, engineering and training, and a 224,000-sq.ft. parts distribution centre. Designed in joint venture by HOK and ZAS Architects, it seeks both to express Honda’s core corporate values and ensure their practical application. At the same time, by combining functions into a single interconnected campus in which the traditional hierarchy of enclosed and open spaces has been turned on its head, the result has enhanced collaborative work, maximizing worker creativity. This carefully honed brand centres on three core principles: first, products are efficient, cost-effective and streamlined but enduring and

Top & above: Honda Canada received LEED Gold certification for its new headquarters in Markham, Ont., making it Honda’s 11th LEEDcertified building in North America. Next page: Workstations are no more than eight metres from natural light and views, and thermostats throughout the building give tightly-zoned control over airflow and temperature. Photos by Tom Arban

April/May 2012 BUILDING 19

12-05-17 10:18 AM

Creative Offices

not flashy; second, workers and their creative contribution are respected and encouraged; and third, the company assumes a social responsibility for reducing energy consumption. All three find concrete expression in the new campus.

A Subtle Reflection of an Enduring Brand

Unlike a number of recent spectacularly expressive automotive facilities in Europe, such as projects for BMW or the MercedesBenz Museum, the Markham campus is architecturally straightforward and clean-lined. According to the architects, its tight composition of linked volumes clad appropriately in silver Alucobond panels efficiently unify three key functions while utilizing basic but green construction techniques with reasonably priced materials. “This campus,” they state, “makes reference to the architecture of the Machine Age with its linear lines, simple volumes, and machined sharpness and angularity,” but quietly.

Consolidating Honda’s commitment to being environmentally friendly, the building has obtained LEED Gold certification and represents the company’s 11th such building in North America, but the first in Canada. The campus’ 53acre site is 30 per cent naturalized with approximately 8,000 low-maintenance native trees and plants irrigated by recycled surface water drained from the Distribution Centre’s roof.

The main block’s east-west orientation, with bris soleils on the south elevation as well as limited windows on the east and west elevations, mediate heat gain while heat-reflective roof membranes minimize the heat island effect. This and other sustainability attributes produce a 33 per cent energy saving while green plumbing fixtures with low flow or volume usage reduce interior water consumption by 44 per cent.

A Creative Work Environment

The automotive industry may appear as the epitome of the dying Fordist economy but Honda owes its success to understanding that creative work is as important as fabrication. Indeed, even this latter process is increasingly as much about creative thought as marketing, styling and financing. HOK’s principle-in-charge, Gordon Stratford, says in a telephone interview that 21st century offices must 20 BUILDING April/May 2012

Pfizer/Honda.indd 20

be based on four inter-related concepts: environmental sustainability including worker comfort and health; economic efficiency; the nurturing of the social dynamic of work and a corporation’s culture. The last three attributes, which have a lot to do with attracting and retaining a creative workforce, are key to the interior design.

Honda’s corporate culture, reinforced during initial project visioning sessions, operates on inter-connectivity reaching across specialties. Thus a connective Welcome Centre that facilitates collaboration between the campus’ 550 employees links the office wing and its cafeteria to the training centre. This elegantly spare, clean latter space with views into working labs includes displays of Honda’s ecologically advanced automotive products as well as highlighting the campus’s sustainability attributes to both associates and visitors.

Like Honda’s cars, the company wanted interior spaces that were, says Stratford, “well designed, comfortable, efficient and with everything in its right place.” The campus’ finger-like office floor plans with green designed workspaces encourage interaction and collaboration. While all workstations are open with low baffle dividers – not even the CEO has a closed office – more formal teamwork is supported by closed but transparent seminar/meeting rooms with exterior views and natural light.

The systems furniture is GreenGuard certified and very flexible for easy “teardown and rebuilding for churn,” as needs change frequently says HOK interior designer Sharon Turner.

Informal areas to brainstorm together or work alone are provided by the bright employee cafeteria connected not only to the Welcome Centre but also a protected courtyard that also acts as an alternative open air working area in summer. Shades of white and grey dominate but the use of natural material accents, Turner states, “adds warmth without unnecessary embellishment to ensure durable, timeless design.”

A comfortable and healthy workspace was a priority. The low workspace dividers and the fact that no workstation is more than eight metres from a continuous ribbon of windows guarantees abundant natural light and views to the bucolic country landscape for all employees. Lighting fixtures, connected to daylight sensors, respond to natural light levels in the building. Under floor air distribution with MERV 13 filters to remove particulates such as pollen, fibres, dust, fumes, and Legionella bacteria provide excellent air quality. A sense of environmental control is central to employee satisfaction so individuals can regulate airflow and temperature to their workspaces, for example thermostats are provided in each meeting rooms; CO2 sensors monitor return air to ensure optimum fresh air is provided to the office spaces; all paints, coatings, and sealants are low-VOC; and 87 per cent of woodbased materials are FSC-certified.

What these new campuses have in common is a reinforcement of carefully balanced corporate brands with a series of elegant, unpretentious buildings that reflect commitment to both sustainability and a healthy, creative workplace. www.building.ca

12-05-17 10:18 AM

Building on your vision of efficiency WATER-SOURCE VRF HVAC Solutions from Mitsubishi Electric CITY MULTI’s water-source VRF system delivers a higher level of efficiency. Energy efficiency is achieved with double heat recovery and being geothermal-ready. Units can be installed on any floor or location with longer pipe lengths, providing design efficiency to any type of building.

Our extremely compact 2-pipe units take up less mechanical floor space than traditional HVAC systems, improving total installed cost efficiency with savings on both labour and material.

www.CityMulti.ca

NEVER UNDERESTIMATE THE IMPORTANCE

PROOF #: 05

OF A COMPREHENSIVE ROOF GUARANTEE CLIENT: Mitsubishi

f10238

ACC. MGR: Nicky

PROD. MGR: Stacey

FOLDER NAME: ...lectric:10238_Mitsubishi_CityMultiAd_CdnArch:f05_10238_MIT_12-13E.indd

THIS ARTWORK HAS BEEN CREATED AT 100% OF ACTUAL SIZE. TRIM: 8” x 5” LIVE: 7.75” x 4.75” BLEED: None

FILE NAME: f05_10238_MIT_12-13E.indd START DATE: 1-18-2012 11:46 AM

ART DIRECTOR:Darryl

REV. DATE: 1-23-2012 3:25 PM PREP TO DISK #: 1

ARTIST: Jason DATE: 1-23-2012 3:25 PM

THIS LASER PROOF HAS BEEN SCALED TO 100% TO FIT IN THE PAGE.

Hi-Res PDF

ARTIST: Darryl

Cyan Magenta Yellow Black

PREP ARTIST: Jason

C&F #: None

OR THE STUBBORN DETERMINATION OF A SINGLE

RAINDROP TO GO WHERE IT DOESN’T BELONG

All roofing guarantees are not created equal. Case in point: a non-prorated RoofStar Guarantee by RGC is good for five- or ten-years and completely covers all labour and materials in BC. RoofStar is also the only one that includes a comprehensive inspection schedule overseen by independent, third-party inspectors who monitor the installation process and follow-up inspections at pre-determined intervals. All of which is comforting. Because the only thing more determined than a raindrop is our commitment to make sure none of them ever go where they don’t belong.

RoofStar: New name. Same great guarantee.

ROOFING CONTRACTORS ASSOCIATION OF BRITISH COLUMBIA

604.882.9734 | RoofStar.ca

GUARANTEED. BETTER.

File: 322CAM_8x5_Raindrop-RCABC.indd

design one

www.building.ca CYAN

Mitshibushi.indd 21

MAGENTA

YEllow

BlACk

Client: RoofStar (RCABC)

Canadian Architect Magazine

Size: 8” x 5”

Date: January 23, 2012

April/May 2012 BUILDING 21

“Never underestimate...” - Raindrop Image

12-05-17 10:11 AM

Bank On It

Retail banks need a strategic approach to managing their facilities and operations if they want to generate a competitive advantage by reducing costs and enhancing efficiency.

By Susan Anson

A

bank’s facilities – whether branch locations, back offices or data centres – play an important role in supporting its objectives for attracting customers, retaining employees and operating efficiently. Yet many organizations are only beginning to truly view their facilities as strategic assets. Retail banks can more effectively align facility management and spending with business goals by supporting customer acquisition and retention, increasing employee retention and productivity, reducing short- and long-term operational costs and enhancing efficiency.

In recent years, most banks have undertaken cost-cutting programs as they have consolidated and re-engineered operations. When it came to facilities spending, however, banks often find that they have little detailed or consistent data on which to base decisions about where spending could be curtailed, or conversely, where a minor investment could yield a high return.

This situation is particularly true during a period of mergers and acquisitions, when banks may have acquired a large portfolio of branches across a wide area from other banks. Therefore, facility condition assessments to document operational status, financial value and conformance with regulations are often a precursor to operational efficiency initiatives.

Understanding Long-Term Costs and Priorities

Before banks can put a long-term capital plan together, they need to address the following questions: Do my current assets align with business forecasts and goals? How do my organizational objectives impact the value of my portfolio over the long term? How much money will we need and when? What are the cost differences between operating a current facility and building new? What are our environmental objectives for our existing building infrastructure?

To make smart decisions about capital investments, banks need to be able to forecast future costs. Maintaining up-todate information about facility and system conditions is critical to this process. It is also important to identify the specific criteria for prioritizing capital projects. Some of the common criteria that banks use to evaluate the priority of capital investments, to which they may assign different weights based on their business objectives, include ownership, term remaining on lease (if applicable), facility size, function and condition.

By employing statistical ranking methods including pairwise comparisons, retail banks can simplify the process of com22 BUILDING April/May 2012

RetailBanking.indd 22

paring multiple criteria and of ranking requirements based on organizational priorities.

Generally, banks invest more in facilities they own or lease under a triple net lease contract, than those they lease for shorter terms. Similarly, they tend to focus more attention on maintaining detailed data for owned facilities. However, a detailed understanding of deferred maintenance requirements and costs can also provide important leverage in the case of leased facilities where a significant portion of this cost is the landlord or property manager’s responsibility. Detailed information about a facility’s operational and renewal needs provides a strong foundation for lease versus own decisions, and choices about new building investment.

Promoting Efficiencies through Standardization

Consistent retail branch layouts are one method banks are using to support greater operating efficiency. By developing a common floor plan – with platform areas, teller stations, media elements (such as ATMs), check-writing stations and office space located in the same general area in each branch – and employing standard mechanical and electrical equipment, banks can both reduce design and procurement costs, while helping direct customers to the services they want in any branch. Some banks are also incorporating new marketing components into their standard floor layouts, for example, placing large screen televisions in high-traffic customer areas to promote additional services or special offers to customers. In addition to supporting a consistent brand and customer experience, standardizing such elements across branches helps banks ensure successful approaches are effectively replicated across their network.

An initial step in implementing consistent layouts involves location surveys, including maps of current service locations. As part of such an initiative, banks often also document customer traffic – what paths customers typically take and what they see on those paths – to better align media and services with bank goals and improve the customer experience. This type of audit can also be an opportunity to identify key differences in local markets which may require adjustments to the standard layout to promote the growth and profitability of regional franchises.

Improved Customer Experience Drives Revenue Growth

Achieving sustainable organic growth in the competitive retail banking market means attracting and retaining customwww.building.ca

12-05-17 10:19 AM

Retail Banking

ers. Following a wave of customer relationship management (CRM) implementations designed to strengthen customer relationships and support the cross-selling of financial products, banks are now increasingly looking to create a better customer experience within retail branches.

Banks have also renewed their focus on aesthetics, with changes such as the use of warmer materials and lighting to give the branch a look and feel more similar to a hotel reception desk. By focusing on the “customer path” taken through the branch, and locating services and media elements along this path, banks are looking to offer a similar customer experience from branch to branch. Ultimately, banks are striving to provide a consistent “look and feel” to their branches, extending from signage and ATMs to overall branch layout and fixtures that both supports a strong brand identity and complements customer service.

Effectively managing the implementation of these kinds of changes requires banks to have detailed information about the layout and condition of their branches, and the ability to determine the requirements for complying with new branch brand standards and their associated costs. Ultimately, they need to be able to prioritize the upgrades across their network of branches, and schedule projects cost-effectively with minimal business interruption.

Minimizing the Risk of Business Interruption

Downtime from equipment failure is expensive. For an industry that relies on ATMs and back-end transactional systems to serve customers, usually 24 hours a day, minimizing business interruptions is critical to satisfying customers and avoiding significant additional expenditures. Pinpointing areas of risk associated with outdated structures or systems is critical to avoid this expense and allocate capital and maintenance investments wisely.

There are two major components to mitigating the risk of business interruption. The first is quantifying the current cost of deferred maintenance. Postponing this can greatly increase maintenance and replacement costs for facilities and equipment. For example, the breakdown of an electrical panel supporting many computer systems could result in losses of $30,000 per hour for a bank. Addressing deferred maintenance requires accurate information about the condition, lifecycle and value of capital assets, including facilities and their major systems, as well as specialized assets such as signage, media elements, security systems, vault areas, data recovery and backup systems, and power rooms. This information serves as a basis for prioritizing requirements, bundling them into costeffective projects, and creating an optimal project schedule that ensures the most critical issues are addressed in a timely manner to avoid breakdowns, loss of business continuity and costly emergency repairs.

The second component of risk mitigation is disaster planning. In addition to knowing the age and condition of facilities and their major systems and equipment, as well as the costs of www.building.ca

RetailBanking.indd 23

repair and replacement, retail banks need contingency plans for how they will conduct operations in case of a disaster such as a hurricane or flood, which can make a facility unusable.

Many banks have disaster recovery centres that are maintained in standby mode. If a critical call centre or data centre goes down, the alternate facility needs to be fully operational within hours. Therefore, such facilities should not be overlooked in the assessment process, and banks need to monitor key metrics and investment in these secondary facilities to ensure they will meet critical needs when called on.

Finally, a reduction of deferred maintenance can not only reduce a bank’s risk of downtime, but can also add value to a bank’s real estate portfolio and, consequently, the price of common stock.

Sustainability Objectives

Many banks are focusing on sustainability efforts within their facilities as a way to increase efficiency, save funds and present themselves as good corporate citizens. Banks that seek LEED certification may pursue projects that meet the certification criteria, such as recycling at least 55 per cent of demolition materials; using recycled and renewable materials such as aluminum window frames, rehabbing used furniture; installing low-energy HVAC systems, appliances and computers; maximizing the use of natural light including skylights and sun tubes; and being located near public transportation.

Other sustainability options focused on energy efficiency include light sensor systems that monitor sunlight levels and plumbing fixtures that reduce water usage. Eco-friendly banks are making sustainability part of their brand messaging as they promote reduce, recycle and reuse concepts with their customers, who increasingly expect to do business with environmentally responsible companies.

Sustainability adds another dimension for facility planners.

Organizations tend to focus on specific targets such as energy efficiency. When evaluating greening opportunities, capital planners must compare “in kind” replacement cost versus the cost of sustainable alternatives. The evaluation must compare the lifecycle, direct savings and payback of each green alternative to the “in kind” replacement.

Leveraging the Strategic Value of Facility Assets

By transforming facilities management and planning from a reactive process to a forward looking strategic planning process, retail banks today are improving top line revenues and lowering operating costs. This approach better enables retail banks to operate more efficiently and better compete for customers, employees and market share. Facilities capital management and planning provides retail banks with a strategic tool to identify capital requirements and prioritize investment based on business strategy.

Susan Anson is general manager of VFA Canada, a provider of end-to-end solutions for facilities capital planning and management.

April/May 2012 BUILDING 23

12-05-17 10:19 AM

TRUE NORTH, INDEED

I

n the summer of 2011, the Churchill Northern Studies Centre moved into a new 27,800-sq.-ft. facility designed for 88 visiting scientists and 12 staff working year-round on sub-arctic scientific research and education. The goal for the new facility was to lower utility and operating costs, create a high-performance building that showcases best practice green building engineering design, meet the unique needs of a remote research building in a harsh northern climate, and meet budgetary and time constraints.

This non-profit research and education facility, located 23 kilometres east of the town of Churchill and designed by Prairie Architects and Enermodal Engineering, provides accommodations and logistical support to scientific researchers working on a diverse range of topics of interest to northern science. Facilities include large and small dry laboratories, two classrooms, a gift shop, an observation dome, a library, herbarium, and study collections of various animal species. The Centre also has vehicles, a helicopter landing pad, a garage and comprehensive logistical support for remote field camps.

Design Considerations

The remote site is characterized by shrubby tundra vegetation and thin gravelly soils over shallow bedrock. There are no piped municipal services for water, sewer, or gas and no prospect for any in the future. A one kilometre power line connects to a Manitoba Hydro electrical service but is frequently interrupted by winter weather. A high degree of reliability and independence was therefore required for the essential services of water, wastewater, heat, and power. The remote location also makes regular maintenance an issue, which meant building systems had to be reliable and simple.

Cold, windy conditions of -40 degrees Celsius and 140 km/h winds are the norm. Less access to sunlight was also a consideration from a daylighting perspective. The building envelope is designed to be air-tight and well-insulated with R-40 freezer panel construction and low E, argon-filled, triple-glazed windows. The whole structure is raised above grade for snow drift control, thus providing a convenient space for 24 BUILDING April/May 2012

Churchill.indd 24

The Churchill Northern Studies Centre demonstrates that energy efficiency and water selfsufficiency is possible even in areas as remote as northern Manitoba.

By Richard Lay

building ventilation openings under the building protected from snow entry and minimizing mechanical elements on the striking building façades. “Bear barsâ€? to protect the occupants and building from polar bears were installed on everything within four metres of the ground.

Laboratory areas had to be provided for wet/dry and clean/ dirty research activities. Periodically soil and plant samples have to be dried which meant the moisture and smell has to be contained. Some samples must be archived in a room with controlled temperature and humidity, and some experiments also need controlled temperature and humidity, especially in summer during the peak field research activity. Activities generating noxious fumes are conducted in energy-efficient fume hoods that control exhaust and makeup ventilation, while maintaining good IAQ in the lab.

Lighting fixtures are high efficiency, without over-lighting spaces. The average building-wide lighting power density is a mere 7.7 W/m2, which is 30 per cent below ASHRAE 90.12007 levels for an office/lab/dormitory building using the building area method. The rooftop Aurora Borealis Viewing Dome was outfitted with LED way-finding lights (like emergency exit lights in an aircraft cabin) and a switch to allow users to turn off non-essential exterior lighting for better viewing of the northern lights.

Heating and Ventilation

The four main building ventilation systems were designed to have heat recovery ventilation (where incoming fresh air is pre-heated by outgoing stale air), which was a challenging accomplishment in an environment where heat recovery ventilators (HRVs) are vulnerable to freezing. The main ventilation system is an innovative reversing flow heat exchanger made in Manitoba and featuring 85 per cent heat recovery efficiency and no requirement for defrost. The other HRVs, serving the dining room and kitchen, labs, and composting toilets, rely on electric pre-heaters to keep them out of defrost mode and optimize their heat recovery performance.

The reversing-flow heat exchanger supplies up to 1,175 L/s www.building.ca

12-05-17 10:19 AM

Northern Building of ventilation, depending on demand, and does not require any preheating.

Building controls are designed to reduce operating costs while still being relatively simple and easy to operate. The basic approach is to turn equipment off when not in use. For example, ventilation is supplied by multiple, dedicated units which slow down or stop when any individual unit is not needed. Local controls include occupancy sensors, CO2 sensors, timers, and variable motor speed drives. The project team can access the building automation system for monitoring and trouble-shooting via the Internet when they are off-site.

A commercial kitchen serving three meals a day to 100 people can be extremely energy intensive. The best-in-class range hood ventilation at CNSC is low-flow and variable speed, responding to the amount of cooking and providing only the amount of exhaust and makeup air required. Solar wall panels pre-heat the large volume of fresh air for the kitchen and cafeteria, supplemented by a dedicated energy recovery ventilator which even recovers heat from the dishwasher exhaust. There are two oversized grease interceptors, one just for the dishwasher to prevent its hot drain water from interfering with the operation of the main interceptor. The interceptors are installed in a cool basement wastewater treatment room where they serve to heat the room, while cooling down and improving grease separation.

Waste heat from the computer room is circulated to the underfloor plenum for heating, rather than being directly exhausted or air conditioned, and refrigeration compressor waste heat is also recirculated for space heating. All other spaces have individual thermostat-controlled electric baseboard heat.

Water and Wastewater

The old facility had to truck water 20 kilometres from town, then truck back the sewage. Every effort was made to decrease this considerable cost of carbon emissions and money. The most significant measure is two large composting systems serving waterless toilets and urinals. Wastewater is treated on-site to tertiary quality by two 5,000 litre biofiltration vessels indoors and two

Construction Challenges in Canada’s North One of the main challenges for this project from a construction perspective was the remote, northern location.

Some of the corresponding obstacles included: ◆ Scarcity of local building trades. Most had to travel from southern Manitoba and stay in purpose-built accommodation on site at significant cost for remotelocation bonuses and travel; ◆ Scarcity of local construction materials. Building materials had to be shipped by rail (ideally), sea, or air, and gravel or sand must be made locally or shipped into site; ◆ Lack of energy resources. With no natural gas, liquid fuels like propane and diesel must be transported in tanks or drums; ◆ Polar bears on the construction site can be an all-toocommon hassle.

www.building.ca

Churchill.indd 25

Nonconventional Problem-Solving Constructing a high performance building in the far north in a remote, non-serviced location presents unusual challenges that require innovative solutions: ◆ All heat recovery ventilation systems need additional defrost provisions; ◆ Ventilation openings need protection from winddriven snow; ◆ Outdoor tanks will freeze, so no sewage treatment equipment (e.g., tanks, treatment units) can be outdoors; ◆ Water is expensive and must be trucked in and stored on site, and sewage must be trucked out, therefore, six litre flush toilets are too wasteful.

area bed sand dispersal fields outdoors, made of manufactured sand and woodchip-and-sand layers. The permitted daily flow is 8,000 litres, or 68 litres per person, compared to the 100-plus litres per person metered last year in the old building.

An innovative ventilation system using a heat recovery ventilator provides continuous exhaust from the composter, with the toilets themselves acting as the exhaust fans for the washrooms. The system is water-and-energy efficient, keeps the washrooms odour-free, and thanks to a healthy population of red wriggler worms, automatic moistening system, compost tea removal, and the aerobic decomposition process, very little maintenance is required.

Lake water is pumped two kilometres to the site in summer and treated with settling, simple cartridge filters and UV to drinking water quality. Two 13,000-litre tanks can store drinking water trucked from town in winter when the lake is frozen. Untreated lake water is distributed through separate non-potable water piping to flush-type toilets, hose bibs and drain trap primers to reduce the need for drinking water, and also to utilize greywater recycled from lavatory and shower wastewater. Drain water heat exchangers recover heat from the showers and lavatories to preheat domestic hot water.

It is hoped that the application of innovative yet simple design approaches towards heat and energy efficiency, ambitious water conservation and on-site treatment will be a model of sustainability for other developments in remote northern communities. The technologies showcased at CNSC are scalable to larger facilities, and meet the needs of the occupants for a modern building with all the anticipated amenities and services, while providing significant energy and water savings for the owner and environment. And on the plus side, there are great paybacks for energy and water reductions when diesel costs $4 per litre and electricity costs $0.90/kWh. Richard Lay, P.Eng, is the senior mechanical designer at Enermodal Engineering, a member of the MMM Group Limited. Founded in 1980, Enermodal is Canada’s largest green building consultant and has offices in Kitchener, Calgary, Edmonton, Winnipeg, Halifax, Vancouver, and Toronto.

April/May 2012 BUILDING 25

12-05-17 10:19 AM

THE NEW OLD ENERGY Acute public interest, solid government support and slick technological advances all collide to make now a great time to integrate solar photovoltaic power generation into property and business plans. By Andrew Sobchak

Photo courtesy of Sterling Homes

“T

he business case for solar just keeps getting better,” says Jim McLellan, Director of Real Estate for Purolator Courier Ltd., after the Canadian-based shipping giant announced that five of its Ontario facilities would be outfitted with rooftop solar photovoltaic modules. “The cost of the systems keeps going down, they are more efficient and often backed by blue chip companies, making them more reliable.“ McLellan is not alone in his assessment.

Property managers across Canada eager to reduce environmental footprints while improving bottom lines are finding the solution lies with solar. Acute public interest, solid government support and slick technological advances all collide to make now a great time to integrate solar photovoltaic power generation into property and business plans.

Solar is the perfect energy source; it is abundant, free and clean. No one can assert ownership rights or tighten political grips on the radiation the sun emits. In fact, it is so perfect Earth has been feasting elegantly on solar energy for billions of years, and for the proportional speck of time that humans have co-habited the place, we followed the cue.

But somehow, during our rapid industrialization in the 20th century, we got distracted – seriously distracted. Mary Guzowski, in her 2010 book Towards Zero Energy Architecture: New Solar Design, blames improved distribution, and suggests 26 BUILDING April/May 2012

Solar.indd 26

that the development of wide networks of roads, pipelines and shipping routes momentarily made the transport of energy in the form of fossil fuels more attractive than other energy sources. With oil reserves exhausting, though, that moment may be over and renewable energies like solar are coming into focus, especially for property managers.

Space = Profit

Property managers control the one commodity needed to make solar power generation profitable: space. In one hour, more solar energy hits Earth than our planet’s population uses in an entire year and therefore our ability to capture and convert radiation into a useable format is the only barrier to an almost endless supply of clean electricity.

Although there are many affordable and popular methods to employ passive solar capture with building design, active forms like solar photovoltaics (PV), which convert sunlight to electricity, typically require more expense and effort. But because electricity can be stored for later use or distributed into a community grid, solar PV also has wider appeal in the business context.

A Devil’s Circle

Throughout the 1990s and early 2000s in Canada, levels of government support for the solar industry lagged far behind those received by other domestic energy industries like fossil www.building.ca

12-05-17 10:20 AM

Solar Energy

fuels or nuclear. The playing field was not level and advancements in solar PV technology consequently languished. The industry was caught in what Bob Johnstone describes as a ‘devil’s circle’ in his 2011 book Switching to Solar: What We Can Learn From Germany’s Success In Harnessing Clean Energy -- the perpetually high cost of PV modules drove down demand; few orders meant economies of scale in production were not achieved; and inefficient production in turn lead back to higher consumer costs. To spark success an external catalyst was necessary to break the cycle and make solar PV competitive.

Feed-in Tariff: The Solar Saviour

The game-changer was the Feed-in Tariff (FIT). First employed in the U.S. in 1978, but popularized in Germany throughout the past two decades, FIT programs paid energy entrepreneurs for the surplus power they pumped into community grids.

People were handsomely compensated to produce clean energy above their domestic needs. Grid access was guaranteed, long term contracts between micro-producer and power authority were struck and unit prices fixed at rates proportional to the methods of generation. The playing field had been levelled and suddenly solar was competitive. In 1990s Germany, demand for solar technology exploded, costs plummeted and now Johnstone estimates half of the planet’s solar installations are in that country.

Stimulus in Canada

Due to the unparalleled success of the German model, the FIT phenomenon spread around the world, currently employed in over 15 countries including Canada. But even today, Canada’s attempts at solar industry stimulus are seeing mixed results, employing an oft-confusing array of net-metering incentives, tariffs and straightforward equipment subsidies. While Alberta, British Columbia, and Prince Edward Island currently employ a FIT-style incentive, with Saskatchewan kicking the tires on a similar program, Ontario’s version is the most advanced in the nation.

A major plank in Ontario Premier Dalton McGuinty’s Green Energy Act platform, the Ontario FIT program was designed to help the province phase out coal-fired electricity generation by 2014 and is billed as the largest program of its kind in North America. By August 5, 2011 over eight thousand applications to the program had been submitted to the Ontario Power Authority, of which 94 per cent were for solar PV projects, accounting for 19,730 MW of clean electricity.

Of those already reviewed, 74 per cent were approved and offered contracts.

The price paid to micro-producers for solar PV generated electricity as of June 3, 2011 ranged from $0.443/kWh for ground-mounted systems with capacities less than 10 MW to $0.713/kWh for rooftop modules with capacities less than 250 MW. The FIT program guarantees the OPA will compensate www.building.ca

Solar.indd 27

at these rates for the duration of typically 20 year contracts, but the rates applied to new contracts will decline as system capacities adjust and grid parity is approached.

Tariffs by nature are exclusionary trade practices that harbour an often fledgling and weak corner of a local economy.

Despite the eco-friendly undertones, the Ontario FIT program is no exception. The Green Energy Act was passed, in part, to fuel domestic job creation in green manufacturing and make Ontario as the solar capital of Canada. The program appears to be working. 51 per cent of the 650 solar equipment manufacturers and industry service providers represented by the national trade organization Canadian Solar Industries Association (CanSIA) are located in Ontario. Additionally, a study released in July by research group ClearSky Advisors Inc. suggests private investment in Ontario solar will reach $12.8 billion by 2018, supporting 74,000 person years of employment.

By the end of 2012, employment in the sector is expected to increase by a staggering 40 per cent over 2011 rates.

Purolator: Achieving Triple Bottom Line

Helping grow Ontario’s green economy is a priority for Purolator, too. “[The Solar Rooftop project] creates a triple benefit,” states McLellan. “The generated revenue assists with investments in future capabilities; it produces clean energy and creates green jobs.”

Over 20 years, the company projects the initiative will generate 22.4 million kWh of energy and reduce atmospheric carbon dioxide contributions in a quantity equivalent to taking 1,000 cars off the road for a year. “The program is an important element of our sustainability efforts,” adds McLellan, acknowledging Purolator’s commitment to ethical operation and stewardship, but the “revenue in the pockets of those organizations willing to commit to solar” is a bonus, too.

But Purolator is not in the business of solar harvesting and what makes the project viable for them is their ability to tap into external expertise. The company signed a lease agreement with project partner SunEdison that allows Purolator to monetize their roof space immediately, while SunEdison oversees all installation, operation and maintenance of the rooftop modules. SunEdison absorbs the variable profits while paying Purolator a set fee for the right to use their space.

Besides giving the keys to SunEdison, Purolator does not expect to sink any additional resources into the project.

TDSB: Solar Funds School Repair

Last spring, the Toronto District School Board (TDSB) announced it would be using a similar partnership model that would see the deployment of solar panels on hundreds of school rooftops. When fully implemented, the project, serviced by AMP Solar LP, is expected to yield close to 66 MW of electricity each year – or roughly the equivalent annual usage of 6,000 Toronto households – with TDSB’s lease fees being put towards roof repair for 450 schools.

April/May 2012 BUILDING 27

12-05-17 10:20 AM

Solar Energy

Previous spread: the widely-acclaimed Drake Landing master planned neighbourhood in Okotoks, Alta. has successfully integrated solar PV technology as part of district heating system designed to store solar energy underground during the summer months and distribute it to each home for space heating needs during winter months. Above: Solar PV roof panels like these from SunEdison may improve the building’s LEED score and generate significant income.

Photo courtesy of SunEdison

AMP Solar has already assessed over 150 schools from the board’s portfolio, and found 61 that are in need of repair.

However, they might fix a roof, but not necessarily use it to install solar panels on. “Part of this deal is that the roofing [repairs] and where the panels go is not linked directly. There are roofs that we will fix that we do not put solar panels on because the structural assembly of the building cannot hold the weight,” says Dave Rogers, president and CEO of AMP Solar Group. AMP Solar Group is in joint venture with Potential Solar Inc. as AMP Solar LP for the contract.

This arrangement works because the solar company already knows that even if some school buildings can’t support panels, across the board there are roofs able to install 300,000 panels, enough to generate 66 MW of electricity.

The TDSB project is unique not only because of the additional revenue stream it creates for the perpetually cashstrapped school board, but as José Etcheverry, president of the Canadian Renewable Energy Alliance notes, “At 66 megawatts, the project is in the same league as the world’s leading solar projects...and represents an historic educational and innovation landmark for public institutions across Canada and North America.”

Project partnership is not the only option for property managers. For example, in 2010 IKEA Canada installed and internally operates $4.6 million worth of solar PV modules on three of their furniture retail stores in Etobicoke, North York and Vaughan, but the low maintenance alternatives pursued

by Purolator and the TDSB are trending popular in the FITinduced solar climate of Ontario. The compromise in revenue is the price of peace of mind in this rapidly advancing industry.

28 BUILDING April/May 2012

Solar.indd 28

A FIT Future

Despite these promising cases, the unveiling of Ontario’s FIT has been bumpy. Because of the unexpectedly high level of interest in the program, applicants typically endure prolonged review times, increasing administration fees and delayed connections to the grid. The uneven rate of approvals reverberates right through the supply chain as some solar equipment manufacturers contemplate layoffs to deal with irregular demand, while delayed grid connections force micro-producers to bear the weight of significant capital costs before the first kW of power trickles in. Tim Wohlgemut of ClearSky Advisors thinks we are facing the make or break year for solar. “[Soon] it will become clear whether the Ontario market will be a flash in the pan or will gain the momentum to become a long-term sustainable industry,” he says.

CanSIA president Elizabeth McDonald’s advice to property managers interested in solar: do the homework. “Solar is a big investment,” she notes. The Canadian solar PV industry is young and with youth comes some instability and risk.

However, it is under these conditions that early adopters like Purolator stand to reap the greatest benefit. So impressed with solar’s ability to improve their triple bottom line, McLellan and company are already considering a future expansion of their Solar Rooftop program to an additional six facilities.

The continuing government support of solar PV makes these programs possible now, but when the industry reaches grid parity, Purolator will be well ahead of the curve, having reduced their environmental footprint and made money along the way. www.building.ca

12-05-17 10:20 AM

Infosource

Thin-Clad Renaissance® Masonry Units Discover the most comprehensive set of thin-clad materials on the market, featuring ARRIS-Tile, which adheres to a solid substrate, and ARRIS-Clip, which clips to a substrate using a channel system.

All Thin-Clad Renaissance® units are versatile, easy to install and surprisingly affordable. Corner units maintain the look and beauty of full bed stone, with many accessories to complete the overall stone veneer. Arriscraft’s production method ensures remarkably natural and unique colour ranges and striations.

www.arriscraft.com 1-800-265-8123

For information on placing an advertisement in Building contact:

Assurance | Accounting | Taxation | Advisory Services BDO’s real estate and construction team offers a full range of services combined with a personalized approach to help clients address their changing needs within the industry. We have the expertise to handle structuring international projects, public or private investment trusts, P3 projects, tax minimization strategies, financing, and evolving accounting standards.

GREG PALIOURAS, telephone: (416) 510-6808 email: greg@building.ca

Before any property transaction or site assessment, identify your environmental risks...get ERIS.

Canada’s BEST source of environmental risk information for real estate An ERIS Report includes and identifies: • Waste disposal sites • PCB storage sites • Spills • Contaminated sites • Underground tanks • Nearby industrial facilities Information Services include: • Aerial Photographs • City Directory Search • Fire Insurance Maps • Property Title Search • Topographic Maps

Visit www.eris.ca

Call toll free: 1-877-512-5204 Email: info@eris.ca

www.building.ca

Info Source.indd 29

April/May 2012 BUILDING 29

12-05-17 1:56 PM

VIEWPOINT

OPEN DOORS

Paul Campbell never planned to work in real estate development.

But fortuitous circumstances and strong mentors offered challenging opportunities and a successful career. By Sheri Craig

W

the green revolution. “Many tenants find it unacceptable to move hen Paul Campbell was a young man, he had into a building that is not LEED-certified or up to LEED stanrelatively modest aspirations and an aversion dards,” he explains. “Now tenants care and that’s a huge change.” to studying French. When he retired in the However, renovating to LEED status is always a trade-off. “There fall of 2010 at the age of 64, he left the prestiare a lot of government buildings in Ottawa, for example, that are gious position of president and CEO of SITQ, Montréal, the real difficult to renovate in any way that makes sense.” estate investment, management and development branch of the Campell says buildings also must be Caisse de depot et placement du Québec efficient. He cites the TD Centre in responsible for $16.1 billion of assets with Toronto as one of the best buildings for properties in Canada, the U.S., U.K., Gertenants in Toronto. “That’s a good exammany and France. ple of a building designed by a superThe irony is not lost on him. star architect who built great buildings.

While growing up in the Toronto Sometimes architectural form can get suburb of Willowdale, he earned the ahead of efficiency but that also depends dubious distinction of receiving the on whether there are owners who only lowest mark in grade 11 French in the want to build monuments.” entire North York school system. When Despite the concept of “hoteling,’ summoned by the school principal to where employees are encouraged to discuss this achievement, young Campbell work from home, office buildings are still explained that “this is the one subject we needed, Campbell believes, because the take here that I’ll never use.” social side of business is very important.

He graduated from a two-year turf Looking back on his career, he credits management program at Pennsylvania the opportunity to work with a number State University’s School of Agriculture, of self-made men as both inspiration and intending to be a golf course manager. education, mentioning his first mentors, But his boss, Harvey Maron, of Montréalbased Maron Properties, saw greater Paul Campbell accepting a Lifetime Achievement Harvey Maron and Robert Campeau, and more recently Rai Sahi and Mark Tanz of potential in the young man, giving him Award at the 11th Annual NAIOP Real Estate Excellence (REX) Awards this past January.

Revenue Properties, among others. “When opportunities to do leasing and providing applying for a job, you may want to choose who will be your boss,” him with books on business and sales training. And since Maron he suggests to young people looking for a career in real estate had properties in northern Québec, including Val D’Or and development. He also suggests looking outside major cities like Chicoutimi, Campbell started taking French courses.

Toronto. “The reason I got where I did was because I left Toronto Since his foray into the real estate development world at several times. There may be more opportunities for work with Maron, Campbell’s career has taken him many places, with more exposure to a variety of circumstances with a small developer significant stops at Campeau Corporation in Ottawa, Oxford in Peterborough, for example, than with a big group in Toronto.”

Development Group, Trilea Centres (owned by Bramalea Inc.), Campbell also believes employers should seek out people Aberlour, Nexacor Realty Management and Revenue Properties, with attitude. “There are people like me who don’t have a clasbefore moving to Montréal for his role at SITQ in 2001. During sical education. You can’t give all the credit to degrees.” And he these years, while managing multi-million dollar portfolios and apologizes for the fact that there are few women in the business also being a husband and a father, he found time to continue “because of dinosaurs like me.” He suggests, “Try to seek out studying French. women because 90 to 95 per cent of the time, they do a better job.”

Campbell has seen many changes in the real estate developBy now, Campbell is fluent in French but still continues takment business over his 43 year-career, with technological advances ing classes at the Alliance Française, which came in handy during like email and the Internet altering the way business is conducted. a recent trip to Lyons, France. Bien fait, Paul.

But the biggest change, he says, is the obsolescence created by 30 BUILDING April/May 2012

Viewpoint.indd 30

www.building.ca

12-05-17 10:21 AM

Precast Concrete...

Sustainable Structures for Tomorrow!

SUSTAINABLE BENEFITS Precast concrete offers a number of benefits that make it environmentally friendly. Precast’s energy efficiency, recyclability, reusability, durability, minimal waste in the precast plant and on the jobsite and the use of fly ash, slag and other waste materials aid its environmental friendliness.

Desmarais Building at the U of Ottawa, Architects:

For more information and your free Sustainable Precast Concrete CD: Call CPCI at: 1 877.937.2724 Visit: www.cpci.ca Contact CPCI at: info@cpci.ca Contact your local CPCI member at: www.precastsearch.com

SUSTAINABLE Precast offers thermal mass, a valuable element of building designs which help along with precast’s core benefits to aid in meeting LEED requirements.

CANADIAN PRECAST/PRESTRESSED CONCRETE INSTITUTE

www.cpci.ca

Precast Concrete... Sustainable Structures for Tomorrow!

CPCI.indd 31

12-05-17 3:32 PM

Each home you build will have many owners.

But there’s only one planet earth.

You’re committed to building better quality homes with higher energy efficiency and more respect for the planet. That’s why we created EcoTouch® PINK™ FIBERGLAS® Insulation.

It’s made from 99% natural** materials, and it’s guaranteed to provide the same thermal performance that Canadians have counted on for decades.

For an insulation product that’s durable and dependable, think PINK™.

It’s the best way to go green.

Why choose EcoTouch® PINK™ Insulation?

• Designed by a leader in energy efficiency • Made from 73%* recycled content – 3rd party SCS certified • Made with 99% natural** materials • GREENGUARD Indoor Air Quality CertifiedSM and is verified to be formaldehyde-free • Durable & dependable

1-800-GET-PINK® or visit www.owenscorning.ca

THE PINK PANTHER™ & © 1964-2012 Metro-Goldwyn-Mayer Studios Inc. All Rights Reserved. The colour PINK is a registered trademark of Owens Corning. © 2012 Owens Corning. All Rights Reserved. *73% recycled content is based on the average recycled glass content in all Owens Corning fiberglass batts, rolls and unbonded loosefill insulation manufactured in Canada. SCS certified. **Made with a minimum of 99% by weight natural materials consisting of minerals and plant-based compounds. GREENGUARD Children & SchoolsSM Mark is a registered certification mark used under license through the GREENGUARD Environmental Institute. Owens Corning PINK™ insulation is GREENGUARD Certified for indoor air quality, except bonded loosefill products. This product has achieved GREENGUARD Children & Schools Certification and is verified to be formaldehyde free. Certified Thermal Insulation Material CCD-016. © 2012 Owens Corning. All Rights Reserved.

Owens.indd 32

12-05-17 3:31 PM