Association has up to three years to find a new location
By Mark Buckshon
Ottawa Construction News staff writer
The Ottawa Construction Association (OCA) has sold its building and property at 196 Bronson Ave. to a Toronto-based condominium developer, but the association won’t be moving for at least a year, and possibly as long as three years.
OCA president John DeVries says Lamb Developments Ltd. purchased the property for $4.6 million. The developer will lease the property back to the association for between one and three years.
“We have provided a $3 million mortgage to Lamb Developments for the next two years of the lease,” DeVries said. “The interest we receive monthly from the mortgage is almost equal to the monthly lease payments – the amount is approximately $13,000 per month.”
This means that at present, the association has received $1.6 million less real estate commissions. DeVries did not disclose the commissions, other than “it is the usual type percentage.” (At five per cent, the association would pay the broker, District Realty Ltd., $230,000 in commissions.)
DeVries said the OCA has an option to extend the lease for a third year if it wishes, “but there is (also) an option by either party to terminate the lease with six months notice after one year has lapsed.”
“With the current cold condo market, most likely it would be the OCA thinking of terminating the lease early.”
“We will be looking aggressively at various property options now that the sale has gone through,” DeVries said. “The message to the members is that we are not going to rush any decision on a purchase.
“(We’re) looking for (an) existing building or empty property opportunities that can hold over 50 parking spots as parking has to be free for members in the future site. Building needs are in the 10,000 sq. ft. of area, with the majority of space for educational and meeting room requirements.”
The developer plans to build a $90 million multi-tower condo project on the site. In an earlier interview, Brad Lamb said he anticipates the building permit value will be approximately $42 million, and he expects contractors and sub-trades working on the company’s current and recent Ottawa projects will be contracted to work on the new site.
He said the lease-back to the OCA will give the developer time to have the property rezoned to allow for “three or four structures in one building.”
Lamb said he anticipated the condos would sell in the $200,000 to $500,000 range, and there would be retail space on the ground floor – hopefully a major food retailer.
The developer said he is satisfied with Daoust Construction, which has worked on other local projects including Gotham and SOBA. He said he also is happy with Bellai’s work on concrete forming and Taggart’s site preparation and he anticipates his business would continue with its current design and engineering consultants.
Lamb said it may take a year or more for the project to be designed and approved, but this time-frame suits him as he believes the market will be ready for the condos once they go on the market, with sales commencing later in 2014.
He said he anticipates his company will continue to build approximately 400 units a year in several markets across Canada. The business started in Toronto, but has expanded to serve other markets and he anticipates much of the business’s growth will be outside of Toronto in the next several years, as Toronto’s easy-to-develop land has been exhausted. “Halifax, Montreal, Edmonton, Winnipeg, Saskatoon and Regina, are all cities expensive enough to get 500 sq. ft. housing built,” he said.