York University to upgrade buildings, systems

York University is investing in building and systems upgrades that are expected to improve research and experiential learning opportunities for students.

Funds from Ontario and the federal government will help construct a major science building renewal project, the central utilities and co-generation upgrade project and the Schulich School of Business expansion.

Work will include modernizing four major science research buildings at the Keele and Glendon campuses, replacing turbines and boilers, and building an addition to the Schulich School of Business. Site work and demolition has already started on the estimated $113 million project.

“This strategy, coupled with the fact that York has long been on the forefront of research and cutting edge development, means York’s role is one that must expand in ways that assures the University has the tools needed to do the job effectively,” said Ontario MP Judy Sgro.

Canada’s Strategic Investment Fund is giving $41 million, while nearly $6.6 million is coming from Ontario. York University will invest $65 million.

Photo: Schulich School of Business, courtesy of York University

B.C. budget invests billions in infrastructure

B.C.’s provincial budget 2017 includes billions in infrastructure spending. The announcement demonstrates that the province’s commitment to balanced budgets and fiscal responsibility is paying dividends for British Columbians and for the construction industry.

A $24.5 billion investment in infrastructure will support more than 30,000 construction jobs across B.C. Investment in infrastructure over the next three years includes:

$13.7 billion on hospitals ($2.7B), schools ($2.0B), post-secondary institutions ($2.6B), transportation ($4.5B) and BCH ($1.9B).
$10.8 billion on power projects and other transportation projects.

“The message in this budget is clear – when governments save and spend responsibly they can cut taxes, invest in construction projects and support small businesses.” said Chris Gardner, president, Independent Contractors and Businesses Association.

“The government has rolled out an aggressive plan to build our province and to support families and small businesses.”

The construction sector in B.C. employs more than 200,000 people and continues to grow faster than the overall economy accounting for 8.5 per cent of the province’s GDP.

“Balancing over the past five years has given the government the flexibility to make investments that are creating jobs and driving a stronger economy,” stated Gardner.

The province is also putting money back into the pockets of taxpayers announcing a series of important tax cuts.

Small business tax cut from 2.5 per cent to 2.0 percent – the second lowest in Canada.
Elimination of the PST on electricity for businesses – starting October 1, 2017.
A reduction in MSP premiums by 50 per cent will help families and small businesses.

“Now is the time to build – putting money back into the pockets of families and small business owners will reap strong benefits for the construction sector in B.C.,” said Gardner.

The B.C. government has also committed $920 million to support the creation of more than 5,300 affordable housing units.

Ryerson reveals Centre for Urban Innovation design

Ryerson University has revealed the design for the new Centre for Urban Innovation (CUI), a research, incubation and commercialization hub focused on solutions to urban infrastructure issues.

The 40,000 square foot facility is being designed by Moriyama & Teshima Architects, an internationally-acclaimed architectural firm, to provide research and fabrication space for faculty and students conducting research on alternative energy, water management, infrastructure, transportation, logistics, food production and data analytics.

“The striking design of the Centre for Urban Innovation preserves the building’s rich history while transforming it into a modern state-of-the-art research facility,” said Mohamed Lachemi, Ryerson president and vice-chancellor, in a press release. “We are grateful for the investments from the provincial and federal governments, which will create new spaces and opportunities for Ryerson researchers to collaborate on finding solutions to critical urban issues.”

The first school of pharmacy in Canada originally sat on the CUI site following its construction in 1886. In 1963, Ryerson acquired the heritage site which housed the university’s department of architectural technology program. Moriyama & Teshima Architects’ design preserves the original three-storey historic building, adding two additions with green roofs. Open spaces will join the old heritage building to the new purpose-built facilities. The major spaces within the building will be retained, including the original 19th century lecture hall. The project has been designed to meet LEED Silver standards, adaptively reusing the existing building and reducing the construction footprint.

“The materiality and details for the building and its interiors are meant to convey a light touch that draws from the innovative nature of the Centre,” added Carol Phillips, lead architect at the firm. “The new additions will be distinguished by metal elements, glass and wood to express the aspirations of the program: efficiency, clarity and lightness in our use of energy and resources for sustainability and health.”

Construction of the Centre for Urban Innovation was made possible by a $19.8-million investment from the federal government. The building is set to open in September 2018.

Green Squared recommended for federal purchasing

The Tile Council of North America (TCNA) has announced that Green Squared has been added to the current U.S. Environmental Protection Agency (EPA) Recommendations of Specifications, Standards, and Ecolabels for Federal Purchasing, which was updated at the end of 2016. The recommendations were made to all U.S. government purchasing officials to help identify and procure environmentally sustainable products and services.

Green Squared is the first multi-attribute sustainability standard developed for tiles and tile installation material, and covers the full range of products used in a tile installation. The standard evaluates, validates and communicates products that have a positive impact on the environment and society.

“In establishing a sustainability initiative, it was our desire to put in place one standard and one mark across the tile industry to cover the products used over the course of an installation. Green Squared is the result of that — the first holistic tile sustainability standard,” said Bill Griese, director of standards development and sustainability initiatives at TCNA, in a press release. “We’re incredibly proud to see it now be accepted as part of the United States federal government’s benchmark for sustainability, and to garner credibility both from the government, and by association with similar, recognized industry marks for categories like furnishings and paint.”

“The federal government’s ability to sort through the myriad numbers of products with private ecolabels can provide a critical roadmap for how the public sector can do this,” said Jim Jones, assistant administrator, Office of Chemical Safety and Pollution Prevention, U.S. EPA. “By allowing federal buyers to make more informed decisions on environmentally preferable products and services, federal agencies are leading by example, stimulating the supply of greener products and services, and protecting our health and the environment.”

Upper Canada Mall plans for $60-mil retrofit

Oxford Properties Group plans to redevelop and expand the former Target location at Upper Canada Mall in Newmarket, Ontario.

Plans will include the introduction of a one-level, 64,000 square foot Sport Chek, a 40,000 square foot “first-to-market Food Market concept,” a new two-level feature court space and a 35,000 square foot vertical expansion. Construction began this month and the redevelopment is scheduled to open in phases throughout 2018.

The Food Market concept will focus on the local community and create a unique food experience. Oxford states it will be “a place of convenience and comfort, and a reflection of simpler times.”

The Food Market will feature about 25 market vendors with an assortment of fresh foods and prepared take-away options, including produce, a butcher shop, a fish monger, a cheese shop, a bakery, a juice bar and a gourmet gift shop. It will also be anchored by full-service restaurants located at a Yonge Street-facing entrance.

“Oxford is committed to enhancing the food and beverage offering across our national portfolio,” said Brad Jones, senior vice-president, retail, Oxford. “The opening of the Food Market at Upper Canada Mall will create a new and elevated shopping experience for our customers, and we know will be a welcome addition to the mall and the community.

New B.C. liquor laws complicate retail leases

Retailers in British Columbia could soon be adding another dimension to their in-store offerings. As of late January, new amendments to the provincial Liquor Control and Licensing Regulation allow all types of businesses to apply for a liquor license — potentially giving physical store locations an extra perk to counter online competition, but also increasing landlords’ risks under the Occupiers Liability Act.

Flexibility for a broader field of license holders is part of a package of modernization measures promoted as both a consumer service improvement and a vehicle for economic development. A Jan. 22 media release from B.C.’s Ministry of Small Business and Red Tape Reduction identifies barbershops, salons and bookstores as examples of enterprises that will have “opportunities to generate new revenue” while other analysts see spinoff benefits for retailers’ image and the more esoteric concept of the shopping experience.

“Particularly for malls, BIAs (business improvement areas) or lifestyle retailers, I think this is an opportunity to up the game,” says John Williams, senior partner with the retail consulting firm, J.C. Williams Group. “This could be used very strategically.”

The strategy is likely to come with added insurance costs and security concerns, however — perhaps along with some juggling of competing interests. Landlords or condominium strata councils may encounter pushback from tenants or unit owners who are not happy to welcome licensed establishments to the business mix, or, contrarily, opposing landlords could have limited ability to prevent a resident business from introducing alcohol to its product lines.

“If you want to discourage it, there are conditions you can put into the lease of incoming tenants. For existing tenants, there is not going to be much in the lease to address it because we have rarely contemplated these kinds of issues before,” says Peter Anderson, a shareholder and specialist in commercial leasing with Vancouver-based Boughton Law.

Most relatively sophisticated retail leases will have mechanisms to allocate new costs for security and insurance to the tenants who engender them, but other standard use clauses — dictating that a space is to be used for the sale of clothing, for example — could be open to interpretation if alcohol sales are legal and common in the industry. “I think the tenant could potentially argue this is within its permitted use,” Anderson reasons.

Meanwhile, existing liquor license holders with contracted exclusive rights could put a brake on any new competition or create other conundrums for landlords.

“If you have a wine bar in the mall, it may have an exclusive right to provide alcohol for on-premises consumption. So what happens if the hair salon next door starts offering complimentary glasses of wine to customers?” Anderson muses. “The wine bar might claim for breach of its exclusive right. I don’t know what the solution is going to be.”

More licensed establishments will also heighten the importance of vigilance since landlords have a duty of care under the Occupiers Liability Act making them responsible for the safety of occupants, visitors and trespassers on the property. Owners/managers will need to monitor their tenants’ legal compliance and have documentation to demonstrate their efforts.

Beyond merely ensuring that tenants actually have a permit to serve alcohol, landlords should ask for proof that any staff serving alcohol are of legal age and have completed the provincially mandated training program for employees who dispense liquor. “That would be very important, particularly if there was a claim in the future,” Anderson advises.

Nevertheless, even if the new liquor laws complicate retail leases, few real estate or retail analysts would characterize that as a major business obstacle. “Anything that helps the retailer in terms of ensuring they stay in business and pay rent over the long term is good for the owner,” observes Keith Reading, research director with Morguard.

The market is newly open and still untested, but John Williams sees in-store beverages as a way for retailers to differentiate themselves and play to consumer demand. He points to successful examples in the United States and Europe, such as the Westfield Mall in London, where patrons can find refuge and refreshment at a champagne bar in the concourse.

Indeed, drink is arguably the instinctive companion to one of shoppers’ leading preoccupations. “Today, food is the hot anchor commodity; it has replaced fashion,” Williams maintains.

“How do properties stay relevant? That’s the big issue,” he adds. “How do they stay relevant and compete with the lambasting they are taking from web-based retailers? They have to offer a better experience. Something like this would greatly augment the experiential component of your store.”

Barbara Carss is editor-in-chief of Canadian Property Management.

Vancouver’s first temporary modular housing

Completion of Vancouver’s first modular housing development at 220 Terminal Avenue was celebrated in late February. The innovative project helps to address the affordable housing problems in the city, providing interim homes for 40 male and female residents on low-and fixed-incomes.

The 14,875 square foot building features 40 single occupancy suites with self-contained bathrooms and kitchens, individual climate control, and private living space. The central building features include indoor and outdoor amenity space, central laundry, and a number of wheelchair accessible suites on the first floor.

Through use of innovative design ideas and products, the building can be relocated and reconfigured to fit a number of different sites, even the foundation system is reusable. The unique design allows the temporary modular homes to be relocated to future sites.

The project also features two murals on the outside of the building. Braken Hanuse-Corlett, a mural artist and a member of a the Wuikinuxv and Klahoose Nations created the work to reflect the history of the area.

Modular housing manufacturer Horizon North started construction of the modular building in September 2016. The total capital costs for the project were $3 million.

The City of Vancouver donated undeveloped, city-owned land to the Vancouver Affordable Housing Agency (VAHA) for this project. Placing modular housing on vacant and underutilized sites pending redevelopment is a cost-effective way to quickly increase the supply of affordable housing until more permanent housing can be built.

Funding to support VAHA’s temporary modular housing development also comes from the Government of Canada, Vancity and a private donation.

“There’s an immediate need for modular housing to support people on very low incomes who can’t find a place to live as we continue to grapple with a homelessness crisis,” said Mayor Gregor Robertson. “This modular housing development is an innovative, low-cost solution that quickly delivers affordable housing by utilizing vacant city land as we wait for more permanent social housing to be built.”

Report identifies top human resource challenges

A popular saying in the real estate community is that property managers wear many hats. From tenant relations and hiring contractors to financial and legal concerns and overall project management, day-to-day operations vary and unexpected issues arise without notice. Added to this juggling act is human resources, as managing people, including employees, is becoming an increasingly valuable role along this career path.

Accordingly, the real estate industry figured prominently into the new Conference Board of Canada’s (CBC) Talent Management Benchmarking: Human Resources Trends and Metrics, Fourth Edition, which surveyed 1,700 organizations across the country. The recent report delves into the effectiveness of talent management practices related to areas like talent acquisition and employee engagement, helping organizations better understand human capital.

As the report states, Canadian organizations face three top challenges related to human resources: building the leadership pipeline, improving employee engagement and responding to rapid change. Workplaces are changing and will need skilled and adaptable workers. However, what seems to engage them most is a work culture strong in both learning and development.

Building leadership

Building the leadership pipeline remains the biggest HR challenge for Canadian organizations, and such development continues to be the highest HR priority. Recruiting the overall workforce has shown improvement, but almost a fifth of respondents stated that recruiting leaders with “mission-critical skills” is still an issue.

In response, companies are building leaders in order to take over key positions, but less than half employ enough leaders to assure the transition, especially for positons lower in hierarchy. Organizations report that less than 29 per cent of executives who report to the CEO are recruited and promoted from within. Fewer organizations are segmenting the talent pool, but the majority do look at skills, potential and performance, and provide incentives. Overall, segmenting for hot skills has decreased since 2008.

Employee engagement

Engagement ranked as the second most important human capital challenge. But despite the majority of disengagement seen among employees with 20 to 25 years of service, specifically in skilled trade and technical jobs, engagement ranked higher as a priority for the short term than the long term. As the report speculates, the reasoning for this could be because engagement is seen as more tactical than strategic.

Another research model released last year, Employee Engagement: Leveraging the Science to Inspire Great Performance, identified seven factors that make up 78 per cent of what influences engagement. Employers are urged to continue to address these areas through organizational strategy.

While it is somewhat dependent on the type of work, confidence in senior leadership tops this list and needs to be a growing area of focus. While immediate managers impact an employee, especially in retail trade and IT, senior leaders have slightly more influence in workers’ sense of pride in their company. When thinking of retention, employers should focus on professional and personal growth – a factor the model states has the greatest influence on attrition.

Another top concern among respondents, many of whom measure and track engagement, is acknowledgment and recognition. Rewards are “levers for organizations to attract, engage and retain employees in a constantly changing business environment;” yet organizations are aware they don’t properly communicate their rewards programs, and few offer a total rewards statement.

Rapid change

In sectors such as real estate, replacing the skills of retirees with similar talent won’t be enough amidst such change like technology disruption, the report stresses.

Back in 2005, the CBC found only four per cent of HR leaders cited technological change as a human capital challenge. And in 2016, 26 per cent identified a similar challenge facing the workplace.

This increased concern reflects the more than a third of respondents who rank the ability to respond to rapid change as a top short-term human capital challenge in 2016, more so than for the long term.

Key factors to consider in APD project pursuits

Alternative project delivery (APD) projects can take many forms, ranging from design-build (DB) to full public-private-partnership (P3), and are becoming more common for large, public infrastructure projects. Over the years, we’ve learned a lot of lessons. What to do, what not to do, and what can unexpectedly catch teams off guard and take a project off the rails. In our current, competitive environment – fueled by the promise of more APD projects, consultants need to consider several key factors in successful APD project pursuit and delivery.

Track trends In Canada, most APD projects are public sector driven. This gives consultants ample time to look at the scope of projects and track potential funding through the release of government budgets. By monitoring the funding cycle, and budget allocation, we can estimate the timing of the RFP and estimated project completion. This is the time where you need to identify if you have the capacity, and ability to pursue the project.

Better together No company can go it alone. A trusted team of partners needs to be assembled to deliver a project that clients are happy with on time, and on budget. Because potential projects are typically identified years in advance, there is plenty of time to begin assembling the team. I recently attended the Canadian Council for Public-Private-Partnerships conference in Toronto. Not only was there a great discussion about various P3 opportunities across the country, it was clear that attendees were interested in meeting with potential partners to discuss teaming opportunities. If firms want to be successful, they need strong partnerships established well in advance of the RFP. Ideally, firms should build teams with which they have a history of success, as clients are looking for a team that they know will work well together and has a long history of proven performance.

Building capacity While formalizing external partnerships, it is critical that you look at building capacity internally. For example, if the objective is to successfully compete on transportation projects, make sure you have the bench strength and capacity to pursue and deliver on these opportunities. P3 projects are multi-year efforts. If more than one project is secured, your designers, construction services or project management team commitments could overlap. Coordination is key to ensuring you do not under deliver on the service you committed to. The challenge is not to spread resources too thin.

Timelines can make or break a project Waiting for an APD project to begin can often take years. From the initial project announcement to pursuit to team selection, projects often see a number of delays. However, once the project is announced, the clock starts and clients often identify short timelines for key milestones. Often, these timelines are tied to financial incentives. If the project is late, the team can be penalized. If delivered early or under budget, the team could receive a bonus. While unexpected challenges or delays can occur anytime or on any project – when working on an APD project the pressure to deliver on time is elevated. Communication is the only way to keep a project moving ahead. At the beginning of the project, be clear on approvals, and expectations. Anyone who has worked on a P3 knows clear communication is the only way to successfully deliver a project.

Consistency is key A change in staff on the project team, or a change on the client side can easily take a project off track. The group of people at the beginning of a project must remain on the project until the end to maintain continuity. In fact, some clients are now looking at penalizing teams for staff changes in key positions. As these are multi-year projects, creative ways need to be found to encourage people to see a project through to the end but ultimately, it is imperative to maintain a consistent project team to ensure successful delivery.

Stay optimistic about opportunities A year ago, the industry thought that the funnel of P3 projects and funding would be flowing in 2016. The new federal government specified that APD would play a big role in getting infrastructure projects off the ground. While budgets have identified priorities for the next five years, we are waiting for details on the new infrastructure bank and how that will impact infrastructure priorities. Does opportunity exist? Yes. Do we know what will materialize in the next six to 12 months? No. So take the time now to identify what you want to chase. Build your capacity and be ready.

Gord Johnston is the executive vice president and business operating unit leader for Stantec’s infrastructure practice leading the transportation, community development, and water business lines. He has 30 years of private and public sector experience in the design and project management of infrastructure projects throughout North America and abroad.

Photo: Stantec P3 project – the Iqaluit Airport Improvement Project

Workplace safety tips for property managers

Being placed in the position of coordinating both mechanical and building systems, and dealing with a variety of issues personal to clients’ homes, has the potential to place property managers in harm’s way. How can property managers stay safe when they face so many potential hazards in the workplace?

Personal safety should be a priority in all workplaces; however, there is joint responsibility in managing risks. If employers and employees work together to minimize risk, everyone can benefit from a safer work environment.

Know the risks

A responsible employer will ensure that their property managers have access to information and reporting tools specific to safety in the workplace. This might include physical hazards as well as workplace violence and harassment.

Employers and employees should familiarize themselves with the Employment Standards Act and meet their individual obligations. It is the responsibility of everyone —whether it be the employer, employee or condominium corporation — to ensure a safe environment and to take all reasonable steps to plan before disaster strikes.

Staying safe when disaster strikes

While property managers always want to be everything to everyone, they must remain aware of the situation at hand and must never put their personal safety at risk. For example, in the event of an engulfed fire, do not personally try to put out the fire. For another example, in the event of a major water pipe break, do not personally try to clamp the pipe.

Managers must always have well-thought-out policies and procedures in place so that the appropriate person may be contacted to address the situation at hand. Managers must know who to call, and when to call them, but in most cases should not be expected to personally rectify the emergency situation. In addition, employees have the right to refuse unsafe work in accordance with the Employment Standards Act.

Managers must be able to consider all the risks in real time to make an informed decision. It’s important to consider potential scenarios in advance to avoid great personal risk as well as serious cost implications for the property. For example, if a property manager is responding to major flooding, it would be critical to recognize the possibility of live electrical wiring and that certain areas may be structurally unsound and therefore unsafe to enter. Property managers should look to licensed and trained contractors as partners in identifying and rectifying these hazards.

Managers must also remember to respect police, fire and municipal or other government officials who initially respond to emergency situations. The role of property managers is to assist first responders as necessary but property managers must always remember that they themselves are not first responders. The role of the property manager is to help with information and direction where required, and resolve subsequent and resulting damage or concerns from the emergency situation.

Tips for day-to-day safety

Certain activities can result in unnecessary risk. Being proactive in considering personal safety can help keep property managers out of harm’s way.

One strategy would be to identify dangerous or restricted areas of a condominium and stay clear of them. Allow trades with appropriate training and safety gear to take responsibility for areas such as the transformer room, elevator shafts and external rooftops.

Property managers should also be mindful of who they are meeting, especially if they are going alone.

Finally, consider a strict no-cash policy in the office. Access to cash promotes theft, so it is prudent both from a safety and fraud prevention perspective to accept payments only via cheque, money order, or debit/credit card (if available).

In high-rise buildings, where there may be security staff or superintendents, the property manager may want to use a buddy system. They can let each other know where they will be going and who they will be meeting throughout the day. They can also check in with each other at agreed upon intervals so that in the event something happens, the other staff members know how to check on their buddy.

The Ministry of Labour notes that “We are all responsible — employers, supervisors and workers — for preventing workplace illness and injury.” When everyone works together and makes a genuine commitment to safety, it’s possible to reduce the risk of personal injury and make workplaces much safer, even as inevitable emergency situations arise. Property managers should speak to their employer about potential risks and be aware of hazards in their work environment.

Lyndsey McNally, RCM, is team leader at Malvern Condominium Property Management. Her main focus is on policy development and quality assurance.

Andre LeBlanc, RCM, is operations manager at Malvern Condominium Property Management and has been managing condominiums of all types for approximately 15 years.

The value of hospitality renovations

Sooner or later, every owner of a hotel or restaurant must take a hard look at renovations – the fading paint, the tattered wall vinyl, the wearing carpet, at the slightly, or hugely outdated furnishings and make that financial decision. Is it time for a minor or major facelift to breathe new life into their hotel or restaurant or can it wait a bit longer? The timing question is easily answered if the establishment is a franchised one since most franchisors have stringent renovation requirements as part of their franchise agreement with their franchisees. Independent owners also regularly ponder renovation issues, and must choose their timing just as wisely.

As an interior design firm, it has been our experience that a hotel or restaurant that undergoes a minor facelift can expect an increase in profit or sales of 10 per cent on average and 30 – 50 per cent for a full renovation. Effectively designed renovations protect current market share and hopefully gain new clients. As well they can decrease operational costs either through new or upgraded equipment, or improved space planning and flow for customers and staff which both contribute to the end profitability.

In a recent article, Lauren Keller and John Burke for Hotel News wrote on the financial impact of hotel renovations. They followed a hotel three years prior to renovation, the year of the renovation, and two years after renovation. The hotel underwent an extensive $9-million renovation and went from a 3.8 Trip Advisor Rating (its lowest ever) to a 4.3 after renovation. Additionally, the property benefited from a 33 per cent greater net operating income than prior to the renovation. The hotel not only increased its market value to justify the renovation costs but also outpaced the nearby competition.

Franchised hotels typically have Property Improvement Plans (PIP). The purpose of a PIP is to ensure consistency within the brand, not only to protect the brand’s standards but also the investments of other franchisees. Some brand’s PIPs can be quite restrictive and owners can fall into default with heavy penalties or even lose the flag if they don’t comply within the allotted timeframe or negotiated agreement. Improvements are triggered at various stages of a hotel’s life span. Some of the numerous factors dictating the type of renovation needed include: the overall age of the property, the maintenance or upkeep, and the amount of foot traffic it has received.

For either hotel or restaurants typically, small renovations like carpet and soft goods replacement are required at the five-year mark. This is where the designer comes in. This includes carpet in hotels/restaurants, lounge seating in guestrooms or reupholstering booths and banquettes in restaurants. More extensive renovations like tile replacement, millwork or case good updates, and wall vinyl replacement take place after eight – 10 years. Major renovations include bathroom upgrades and often consider new space planning and reconfiguration such as relocating bars, service stations, counters, and reconfiguration for larger or smaller suites or rooms. A qualified designer can assist the owner not only in FF&E selections but also in space planning and detailing that enhances the overall guest experience and flow of the facility.

Required renovations also apply to restaurant chains and fast food locations. For the food and beverage industry, these are required either by the franchisor or the landlord in the lease agreement. In cases where the franchisor is on the head lease, the franchisor enforces the landlord’s requirements in addition to franchise required renovations that protect the brand and provide a consistent offering to its customers. This ensures that if a customer visits a restaurant in Toronto and one in Calgary, there are not only consistencies in the food, but also in the quality of the interior concept and operation.

There is resistance from franchisees and independent owners alike to spend new money when they feel they are finally getting ahead and have just recently paid off their last debt from either a new build or previous renovation. Since penalty fees or default terms don’t apply to independent owners, it may be especially tempting for them to think their establishment can continue as is without a decrease in revenue. It has been shown that an asset in need of renovations generally has a loss of continuous market share and profits that average 10 per cent per year compounded.

Each type of establishment and property is different yet is faced with the same challenges – when is the right time and how much to spend. The decision of when to renovate, beyond just maintenance is an essential one for every owner as it will have a lasting impact on the current income and success of the property, as well as the ultimate value of the asset. An interior designer can assist the owner in determining budgets or phasing of the FF&E replacement or renovations for proper planning of the needed renovation.

Doris Hager is the founder and principal of Hager Design International Inc. in Vancouver, an international interior design firm specializing in the hospitality industry.

HCMA welcomes three new principals

HCMA Architecture + Design in Vancouver welcomes three new principals – Paul Fast, Michael Henderson and Melissa Higgs.

The three new principals are already integral and established leaders in the HCMA practice, working closely with the clients to find creative solutions to each community’s unique challenges.

They join the four other HCMA principals Darryl Condon, Karen Marler, Stuart Rothnie and Carl-Jan Rupp.

“One of the ways that we seek to amplify our positive influence as a firm is by connecting many voices and considering a range of perspectives. We’ve made remarkable progress in the last few years by expanding our service offerings with complementary strengths in response to the multifaceted nature of the challenges our communities face. Inviting three new voices to the partnership is the natural next step in our firm’s evolution and we can’t wait to see the impact they will have as principals,” says Darryl Condon, managing principal.

Higgs’ focus has been on designing arts and culture projects and community recreation facilities, including the award-winning Grandview Heights Aquatic Centre.

Fast is interested in creating architecture that helps to extract and define a strong regional identity. His work is focused on reconnecting people to their environments through the considered use of material, form, space and light.

Henderson promotes community building in both the facilities they design as well as in their studio environment. With a unique focus on sports, recreation and community centres, he has acted as project architect for some of HCMA’s largest aquatic and recreation projects.

New $55 million Salish Secondary school on track

Construction is well underway on the new state-of-the-art $55.2-million Salish Secondary school in the Clayton North area of Surrey.

Building the new school began in the fall of 2016 and is 60 per cent complete. The concrete structure is in place and a roof will soon cover the construction already underway. This work includes exterior wall framing and insulation, interior steel framing, electrical work throughout the building and mechanical ducting.

The new Salish Secondary school will open to accommodate 1,500 grade 8-12 students. It will feature modern learning spaces to support B.C.’s new curriculum with a large open-concept student common area and high-tech labs. Designed by KMBR Architects Planners Inc., the school will also contain two gymnasiums, a fitness room, a theatre and numerous outdoor and roof-top social spaces.

The new school will take pressure off of Clayton Heights and Lord Tweedsmuir Secondary schools, which have been over-capacity for several years.

“More and more families are moving to Surrey for its great lifestyle and community supports. To accommodate the growing number of students, more spaces are needed within the school district – the largest and fastest growing district in the province. I am thrilled to see construction of the new Salish Secondary is on track to serve families of the community well into the future,” said Stephanie Cadieux, MLA for Surrey-Cloverdale.

DGS Construction Company Ltd. is the general contractor. Construction began in fall of 2016 and is expected to finish in 2018. The school is expected to be open for students in September 2018.

Federal infrastructure funding delays

The federal government has announced unprecedented investment to renew Canada’s aging public infrastructure. However, there have been delays in rolling out the funds to get the much needed projects off the ground and the deadline for Phase I is approaching fast. The Canadian Construction Association (CCA) has expressed concerns regarding the March 18, 2017 deadline to several government ministers and is advocating for extension.

Since 2000, successive federal governments have invested considerable dollars in supporting the efforts of provincial and municipal governments to renew Canada’s public infrastructure. The most recent federal contribution was announced this fall when Justin Trudeau’s Liberal government dedicated an additional $35 billion to infrastructure, bringing the total federal investment over the next 11 years to $186 billion. When provincial-municipal leveraging is added, more than $300 billion will be spent by all three levels of government to modernize Canada’s aging core infrastructure. In addition to these funds, the federal government has also committed nearly $32 billion to the renewal of federal assets including infrastructure in parks, small-craft harbours and federal buildings across the country.

Lack of Progress

With so many numbers floating around, it is not surprising that many CCA members are increasingly confused by all these announcements, particularly since most members have seen precious little of this announced investment translate into tangible projects at the local level. In fact, the Parliamentary Budget Office (PBO) recently released a rather scathing report critical of the federal government for its lack of progress in rolling out these funds across the country. According to the PBO, 3,866 projects have been identified for funding at a value of $4.6 billion. Of those, only 1,682 projects valued at $333 million are expected to be completed by March 31, 2017. This means that the remaining 1,461 projects valued at $3 billion will be completed by March 31, 2018. How and when the remaining $7.4 billion of the $11.9 billion announced as part of Phase I will be allocated remains a mystery, which is particularly troubling since many of the projects funded under Phase I must be substantially completed by March 31, 2018.

Where’s the Hold up?

To begin, the addition of new money and the decision on the part of the federal government to change the leveraging requirements precipitated the need for new framework agreements with all the provinces and territories. As is often the case, negotiations took longer than anticipated and the last of these agreements were only signed in late summer of 2016. As a result, many of the projects approved for construction were not tendered due to delays in the design and engineering phase.

Complicating matters further has been the slow pace at which some provinces have submitted projects to the federal government for approval. Again, given the federal funding requirements, it is not surprising that the due diligence on the part of provincial and municipal governments have contributed in part to the delays in obtaining funding approvals. As familiarity with the process improves, many of these delays should be eliminated.

Finally, though it is easy to fault the federal government, and most certainly appropriate for delays in tenders for improvements to federal assets, it must be remembered that the federal government with respect to most co-funded projects is simply a funding agent. The federal government is not the tendering authority so it does not control the pace at which projects are ultimately tendered. In the case of water and public transit projects, it is for the most part municipal governments that dictate the pace of construction, so other than the deadline for substantial completion, the federal government has no tools to expedite the tendering process on the part of other levels of government.

Advocating for Extensions

While CCA appreciates the need to expedite construction, the use of the federal deadline has in some cases forced municipal tendering authorities to attach severe liquidated damages penalties to many of the Phase I projects. With so much additional Phase I work yet to be awarded, this could force many contractors to build into their price additional labour or risk premiums, thereby increasing prices and reducing the amount of infrastructure purchasable from these fixed budgets.

CCA has expressed concerns regarding the deadline to several government ministers and continues to advocate for a reasonable extension for projects that experience unavoidable delays or are required to use unrealistic project schedules to satisfy the federal substantial completion deadline of March 31, 2018.

Michael Atkinson is the president of the Canadian Construction Association. If members are aware of projects that should receive a reasonable extension, please contact Bill Ferreira of CCA at [email protected].

Helping developers achieve project success

Martello Property Services Inc. is well known in residential, commercial, industrial and institutional circles for not only managing assets on behalf of its clients, but also maximizing their value so that they generate revenue success over the long term.

But it would be a mistake to assume that Martello presides solely over properties already on the market: it is equally sought by clients involved in new construction projects.

Warren Smithies, senior vice president, explains. “Since being founded in 1988, we’ve evolved into four distinct divisions, and our cumulative expertise enables us to position new assets to their best advantage, as well as find quality tenants once the project is complete; help with due diligence; or facilitate the transition of a sale or through a holding period.”

Martello is a standalone fee management company that provides consulting, asset management, and property management services for clients who wish to hand off the operational (and often the financial) decision making to experienced professionals. It manages more than 5 million square feet of floor space throughout Western Canada, and its portfolio includes everything from shopping centers and office buildings to mixed use and residential rental properties.

Smithies’ father, Wayne Smithies, initially developed his business as an apartment management specialist, but strong word of mouth led not so much to diversification but rather a steady mastering of different disciplines within the complex world of real estate. As such, Martello’s staff today consists of portfolio managers, strata managers, technical service advisors, operations managers, administrators, and accountants. Most recently, it became the only property management company with an internal brokerage insurance division.

If the logistical difficulties of management compel even the most diligent asset owners to retain Martello, the myriad elements that go into making a new construction project a success are even more daunting. “To cite one example, we were asked to take over the new Columbia College when its construction was nearing completion in 2012,” says Smithies, referring to the community college in Vancouver whose history dates back to 1936.

Columbia’s directors, who were fully occupied with administrative development, retained Martello to find high quality staff and develop service contracts. “We also oversaw construction deficiencies in conjunction with engineers and city planners, and we were directly involved in the commissioning of the facility,” says Smithies.

All told, Martello fulfilled its duties in six months, ahead of the grand opening. “Usually we take a year, but the directors had to abide by a tight timeline,” says Smithies.

It’s a measure of Martello’s success that its average tenure with clients is just over nine years. “That represents the average holding period of clients’ properties, after which the assets are sold or passed onto partners or family,” says Smithies.

Whatever the need, Martello provides customized solutions to asset holders and tenants. For more information on the company, visit www.martello.group

Regular upgrades to building systems reduce costs

As building systems age, the cost of annual maintenance, inspections and long term renewals increase at an exponential rate. The requirement for Depreciation Reports in B.C. has provided an excellent resource for strata owners to develop long term financial plans to ensure the funds are available when they are needed, but there are still potential special levies and increases that cannot be avoided as our building systems age.

One opportunity to reduce costs over time is the routine upgrading of building systems that demand gas or electrical services. Simple upgrades like changeover to LED lights, shower heads, minor adjustments in building climate controls, routine HVAC servicing and fireplace timers can produce amazing results.

Real results are the proof that energy upgrades save money, reduce long term cost and save energy. A 106 unit Richmond strata built in the 80s recently upgraded their lighting to LEDs and made some minor changes to outdoors fixtures. The total cost was $28,000 for the upgrades and labour, monthly savings were instantly $600. In less than 48 months the strata upgrades are paid for, and the strata continues to reduce their electrical operating cost by $7,200 per year. In the event the rates increase, the savings are that much greater.

Gas fireplaces are also a significant opportunity to reduce costs and GHG emissions. In most strata corporations the gas is a common expense with no real opportunity to monitor each owner’s use, but the strata corporation could adopt a bylaw that requires the installation of a timer on each strata lot fireplace that would limit the use to a maximum of one hour before it has to be reset. By installing timers, strata corporations have prevented owners from using their gas fireplaces as their principle heating source on 24 hour cycles. That has seen reductions of up to 60 per cent of their annual gas consumptions.

Rooftop make up air units that are also a significant source of gas consumption should be updated to a hybrid heat pump system that significantly reduce operating cost, and a one degree adjustment in building temperatures for hot water or common area heating may result in a 3-8 per cent reduction in overall energy costs.

While strata corporations are undertaking energy upgrades, HVAC alterations and building renovations, they should also be cautious about the treatment of hazardous materials. Alterations to common property or strata lots could expose asbestos, mould, or other hazardous substances.

Strata councils are often being pressured by the owners to permit a wide range of alterations to strata lots and common property that frequently result in a significant burden or risk for the strata corporation. A kitchen renovation for example, may be the beginning of a plumbing and environmental nightmare for a strata if the details of the alterations are not clearly understood, and the scope of work has a negative impact on the building services or exposes the strata to environmental management risks.

Strata councils often take a hands off approach when an owner wants to make significant alterations to their units; however, the moment the proposed alteration requires cutting into drywall, removal of any walls, altering ceiling finishes, altering soundproofing, changes to plumbing configuration, moving electrical equipment or changing ventilation, your alarm bells should sound and the council needs to pay close attention to the proposed alteration request.

In the event there are alterations that result in environmental abatement and disposal, the cost of the alteration could significantly increase, and the owner along with the strata corporation may be responsible for costs and penalties associated with environmental and health violations. Drywall, flooring, surface finishing and heating facilities that contain asbestos are a significant health hazard and should always be treated properly. Toxic mould, frequently discovered during renovations, may also pose a significant health risk and should be managed safely.

Before a strata hires a contractor, or a strata lot owner commences alterations, confirm all the details of the upgrades or changes in writing, and clearly identify who will be responsible to identify any potential hazards and how they will be reported to the strata corporation to ensure proper handling and budgeting for abatement.

Tony Gioventu is the executive director of the Condominium Home Owners’ Association of B.C. (CHOA), a consumer association in British Columbia with more than 200,000 members comprising strata corporations, owners, and business members who serve the strata industry. Tony plays an active role in research and development of building standards, legislation for strata corporations and consumer protection.

Benefits of having the right property manager

Constructing a building that meets all regulatory standards and is made to last is one thing; but making it generate revenue over the long term, in a manner that is advantageous to both the owners and tenants, can be a logistics nightmare – and that’s why Martello Property Services Inc. is such an important tool for asset holders.

For the past 29 years, Martello has provided a wide range of services, including management of residential, commercial and mixed use stratas; consulting (to help do-it-yourself clients better understand all of the inner workings of leasing, maintenance and regulatory requirements); assisting the transfer of property assets between generations and improving financial performance (on behalf of families and investors); and helping corporations and syndicates ensure that their assets are managed to maximize investor/shareholder gains.

Martello’s team, led by president Wayne Smithies, has developed Martello with a keen appreciation that flexibility is vital to its diverse clientele. “This is especially true of property management,” says Warren Smithies, senior vice president. “By engaging us, building owners can have as much control as they want over their assets, whether it be vetting new tenants or overseeing upgrades – whatever their needs may be.

“And if they want to step back completely – which is often the case with clients whose assets are in another province or country – we handle every aspect of management for them, including accounting and rental payments, thanks to our in-house accounting experts.”

One of the grim realities of property management is that despite the best intentions of even the most experienced owners, quite often a property can become outdated or fall into disrepair. “People underestimate the complexities of management, which includes upgrades and the daunting task of securing desirable tenants,” says Smithies.

A North Vancouver strip shopping mall is one example of how Martello transformed an underperforming property into one that worked for the owner. “Over the years it had simply been outclassed by the competition and the tenant mix wasn’t all that it could be,” says Smithies. “We developed a redesign plan with architects and engineers; the entire mall façade was revamped and most recently we were able to attract a high quality anchor tenant as well as another recognizable brand tenant.”

For other clients whose properties require upgrading, Martello has implemented an aggressive asset strategy that not only improves tenant mix but also reduces operating costs and creates new revenue streams. “We also develop preventative maintenance programs to help clients avoid major issues as well as nip smaller issues in the bud,” says Smithies.

Martello implements its strategies without requiring any equity contributions from the client. “Our fee is derived from the total revenue a building generates, payable by the tenants, not the owners,” explains Smithies.

With over five million square feet of floor space managed and with three offices in Vancouver, Edmonton, and Calgary, Martello has earned its reputation for being one of the most trusted real estate advisory firms in Western Canada. For more information on the company, visit www.martello.group