James M. Flaherty Building (90 Elgin) | 17 Fl | Completed

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Supposed to be vacated this spring. Construction complete 2014.

Arnon, GWL low bidders for Lorne Building redevelopment

Peter Kovessy RSS Feed
Ottawa Business Journal

Construction still scheduled to be completed by end of 2014

Ottawa developer Arnon Corp. and Canadian insurance giant Great-West Life are rumoured to be the low bidders in a federal competition to turn an aged government building on Elgin Street into a 17-storey office tower.

Public Works declined to identify the front-running redevelopment team, but said in response to questions that a contract is expected to be awarded March 31. The recent correspondence contains the first mention of the new building’s proposed height.

The seven-storey Lorne Building is located at 90 Elgin St., between Albert and Slater streets across from the National Arts Centre. Public Works plans to demolish the 50-year-old building and construct a new 489,000-square-foot office, with ground-level retail, on the site and adjacent surface parking lot.

An Arnon official contacted by OBJ referred questions to GWL, which did not return messages left at its Ottawa office or Winnipeg headquarters.

The federal government first announced its intention to redevelop the Lorne Building in late 2009. Solicitation documents published at the time showed the government planned to use a “lease-purchase approach.”

Under that model, a private-sector proponent would design, construct, finance and manage the building. Public Works would continue to own the site and would lease it to the proponent for 25 years, plus the allotted time for demolition and construction. The developer would then, in turn, sublease the space back to Public Works.

Those solicitation documents named the Department of Finance and Treasury Board as the future tenants of the building. Both are currently housed in L’Esplanade Laurier, which is in need of extensive renovations and was purchased by the federal government last summer.

A contract to redevelop the Lorne Building was initially expected to be in place by last fall. Despite the procurement delay, Public Works said it still expects construction to be completed by the end of 2014.

The government pre-qualified three developers and ultimately received two bids. While Public Works will not name the companies involved in the procurement process, OBJ has learned Morguard was the other bidder.

Sources say Brookfield was pre-qualified, but opted not to submit a bid.

Artistic renderings of what the new building will look like will be released after a contract is awarded.

The government previously said it expects the office tower to be a “jewel” befitting its prominent location.

Public Works said the Lorne Building will be vacated this spring.