Economic Development Edmonton Office Relocation

Recommendation:
  1. That the relocation (at a cost of approximately $2.5 million) of Economic Development Edmonton’s (EDE’s) Offices during the demolition and construction period of the Hall D expansion of the Shaw Conference Centre be approved.
  2. That the 2003 relocation costs of $1,235,439 ($932,175 one time costs and $303,314 lease cost) be funded by the City’s Financial Stabilization Reserve.
  3. That the annual lease cost of the relocation for 2004 and 2005 be considered by Council as a part of the City’s 2004 and 2005 budget process.

Report Summary

Edmonton Tourism and other divisions of the corporation currently occupy space to be renovated for Hall D, or space in very close proximity to the construction site. Alternate office space is needed until the end of construction which is anticipated to be year end 2005. Several downtown locations were investigated. The most suitable and cost effective is considered to be 1 and ½ floors of the Telus Tower, a total of 25,869 square feet.

Report

The space currently occupied by Edmonton Tourism is entirely within the boundary of the Hall D expansion site and other EDE office staff are working within a few meters of the construction site. The noise and vibration caused through the construction period will be a major distraction and inconvenience for EDE staff and the many visitors to EDE’s office space.

Budget / Financial Implications

The relocation of EDE’s offices does not qualify for the cost sharing participation in the Shaw Conference Centre (SCC) Hall D expansion project. Funds from the federal and provincial governments will be dedicated to only those parts of the expansion project that qualify as capital improvements.

The anticipated relocation costs breakdown includes:

One Time Relocation Costs

Telephone, move-in and miscellaneous costs /
$2.50 psf /
$ 64,675
Information technologies / 50,000
Office furniture / 817,500
TOTAL One Time Costs / $932,175

Annual Lease Costs

Lease costs are based on a three year lease. Cost per square foot after tenant improvement allowance and including operational costs is $23.45 per annum.

2003 July to December / 25,869 sf @ $23.45/psf /annum /
$ 303,314
2004 January to December / 606,628
2005 January to December / 606,628
TOTAL Lease Costs / $1,516,570
TOTAL RELOCATION COSTS / $2,448,745

At this time no monies are budgeted for the relocation of offices expenditure.

It should be noted that the City’s Financial Stabilization Reserve is below its recommended level and financing the relocation costs by this option increase the concerns of this situation.

Justification of Recommendation

  1. Hall D can not proceed until Edmonton Tourism has been moved out of their current location. There is not sufficient space elsewhere in the SCC to provide an adequate alternative for the Tourism division and the noise of demolition and construction over this period of thirty months will create a work environment that is not acceptable for the conduct of EDE’s business, and not suitable for EDE’s office staff, clients and stakeholders.
  2. Should Council approve the relocation of EDE’s offices, financing the costs through the City’s Financial Stabilization Reserve is the only viable option.
  3. It is suggested that Council consider the financing option for the relocation lease costs for 2004 and 2005 as a part of the City’s annual budget process.

Others Approving this Report

Randy Garvey, Corporate Services Department

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