More questions than answers on city hall expansion project
Tuesday April 28 2009
By PAM DOUGLAS
The Region of Peel expanded its office space for $56 million, but the City of Brampton says it would have to pay close to $200 million for a city hall addition.
Now, eyebrows are being raised at city staff’s price tag on city hall expansion as downtown business leaders and some councillors question the math.
Staff shocked councillors at a workshop Monday with the assertion that a 246,000 square foot Class A building— with brick and other high-quality finishes— would cost $204 million, not including the price of any land that may have to be purchased. That also doesn’t include a main branch library, retail space at street level, a police sub-station or any other amenities. A similar Class B building, described as “glass and steelâ€, would cost $172 million, according to Julian Patteson, the city’s commissioner of buildings and property management.
Those amenities would push the cost as high as $294 million, according to Patteson.
“I don’t know where they’re coming up with $204 million, especially not including land costs,†said Regional Councillor Paul Palleschi, who supports expansion. “I think they’re high.â€
Regional Councillor Elaine Moore, who also supports going ahead with the project, said she was “aghast†when she saw the numbers.
“The numbers just don’t add up. They make absolutely no sense,†Moore said, noting “iconic†office space can be built for around $300 a square foot, but Patteson’s numbers put the cost at $830 a square foot.
“These numbers are just beyond belief. A number of (councillors) have been asking questions...†she said.
Patteson could not provide any details or explanations at the workshop. Instead, City Manager Deborah Dubenofsky promised councillors a breakdown soon.
Patteson told councillors in his presentation that the figures have been double checked, and peer-reviewed by an outside agency for accuracy.
But he could not explain why the Region of Peel was able to build a 200,000 square foot Class B building for just $56.5 million at a time when construction costs were peaking. The region building has just officially opened, and includes a full police station to replace 21 Division and a cafeteria.
The contrast left several councillors asking ‘why’.
“It’s frightening... It takes our breath away, when we see what the Region of Peel spent...†Regional Councillor John Sprovieri told Patteson.
Patteson said he is still attempting to find out if the figures are comparable, and Palleschi said he, too, has called region officials to find out why there is such a large difference.
With a date for a public meeting on the issue still undetermined, city councillors wondered out loud at Monday’s workshop what information they would be able to bring to the public for consideration. After a full day, which included a financial presentation on the significant economic hit the city is taking this year, politicians quickly went through the list of amenities and removed all but the retail space, police sub-station and library for future consideration.
Real estate expert and York University business professor James McKellar presented councillors with various ways they could build the project by including the private sector, and told them borrowing large sums of money over several decades likely won’t be an option in the current climate, but he offered alternatives.
“You would have to guarantee what your tax hike would be to service that debt,†he said in explaining what the city would have to do to secure such loans, despite its Triple A credit rating.
McKellar also told councillors they have to make the best decisions they can make with the information they have available to them, and now is the time to do it.
“If you know what you want, yes, do it today, because I don’t know what’s going to happen a year or two from now,†McKellar told councillors. “The great value today is you’ve got some thinking time...If people say you should wait a while, I’m not sure what you gain.â€
He told councillors that city staff have already invested a lot of time and effort, and it is a complex project to undertake.
“This is a good time to make the commitment and a good time to just make sure the Ts are crossed and the Is are dotted,†he said. “I can’t see a better time in the future.â€
Brampton Mayor Susan Fennell, who told the workshop, “I am for the taxpayer,†pointed out that the city has already made arrangements to accommodate all additional staff expected to be hired through to 2014.
However, Patteson said it would take approximately three years to build an expansion, and planning could take two.
The city currently uses its own buildings and rents space to house staff. The annual cost is $600,000 a year, but that will soon increase to $1 million for those leases, councillors were told.
After the workshop, Brampton Board of Trade Executive Director Gary Collins said city staff need to do a lot more homework on the issue.
“The city needs to go back and sharpen their pencil a bit,†said Collins, reiterating that the board supports downtown revitalization. “I don’t know how they generated those numbers.â€
He questioned Patteson’s assertion that the underground parking garage alone would cost $40 million to build.
“I don’t think that’s an accurate number,†Collins said.
He said the costing also does not take into account revenue generated by leasing out office space not immediately needed by the city, cost-sharing measures with Peel police and retailers, money that could be found by selling other surplus city-owned land including the existing downtown library site, or assessment income from the office space the city is currently renting that would be handed back to the private sector.
He also suggested funds could be freed up from other capital projects that qualify for federal or provincial funding, and re-directed. Administration space does not qualify for any grants, and development charges can only be used for the library, if it were included in the project.
The city is debt-free, but borrowed to build the existing city hall