City of Ottawa gets deal of the Millennium: It can buy a $92 million office building and development site for $12 million


Ottawa Construction News staff writer

The City of Ottawa is about to get an office development bargain because of a three-way deal with a local developer and a bankrupt telecommunication company negotiated early in the Millennium, as the city expanded its boundaries to include suburbs formerly within the Regional Municipality of Ottawa-Carleton.

Under a deal with current owner Arnon Corporation and the building’s former owner, the now-bankrupt Nortel Network, the city arranged to lease 100 Constellation Dr. (The Mary Pitt Centre) until 2026 near what had been Nepean’s former City Hall. The property has an estimated value of between $84 and $92 million, a city staff report says.

However, the agreement negotiated in 2003 gave the city the option of purchasing the building and 6.88 acres of adjacent land for $12.2 million, including closing costs, city staff have reported to the finance and corporate services committee.

Current building rent for the structure, which houses several city offices and departments, is $6.3 million a year. Even with some operating costs, the city will save $5 million a year when it purchases the building – meaning, on rent savings alone, the city will achieve payback in about two years.

As well, the adjacent land provides significant opportunities for municipal development. College Ward Coun. Laine Johnson told CBC News that the property could be used for housing, including units at market rent and others for low-income residents.

“It’s massive and its a really good deal for the city and its going to be truly transformation for this community,” she told the broadcaster.

The property, located near Algonquin College, “would provide added benefits to the city, which will be defined in a new Algonquin Station secondary plan, set to launch later this year.”

The city would take over the property by the end of February, 2025.

The city’s finance committee will discuss the report on June 4, and city council will vote on the recommendation a week later.


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