REAL PROPERTY CHALLENGES New light rail project revitalizes Ottawa’s downtown core BY GORDON E. MACNAIR, SR/WA, AACI, P.APP The Canadian city of Ottawa has long suffered operational in 2018, it will provide rapid and high- the effects of severe bus bottlenecks through the quality transit service from the Tunney’s Pasture downtown core area. With increasingly slowing mixed-use center/employment node in the west service and the declining reliability of the city’s transit to Blair Station Mixed Use Center/employment system, action was clearly needed to address the node in the east. This 13-station electric Light Rail ongoing congestion problem. Transit system will span 12.5-kilometres (7.7 miles), including a 2.5-km (1.5 mile) tunnel that connects the In December 2012, the Ottawa City Council awarded downtown core. the contract to design, build, finance and maintain the first leg of Ottawa’s Light Rail Transit system – the The real property challenges associated with a Confederation Line – to the Rideau Transit Group. project of this magnitude were considerable, as were The project is part of the city’s overarching and long- encouraging transit-oriented development and other term smart-growth objectives laid out in the Official initiatives to support intensification. Plan, Transportation Master Plan and Infrastructure Master Plan. Together, these plans call for the creation Securing the Rights of densified, mixed-use neighborhoods surrounding Confederation Line stations. The property requirements for the Confederation Line consist of four project components: the Confederation The $2.13 billion line is the largest infrastructure Line guideway and stations, the integrated station project in the City of Ottawa since the construction entrances, a maintenance and storage facility and the of the Rideau Canal in 1826. When complete and easements for the electricity provider, Hydro Ottawa. 20 Right of Way JULY/AUGUST 2014 With the exception of the tunnel section, Subterranean Tunnel Segments Creating a Positive Commuting the Confederation Line is a conversion Experience of the city’s surface Bus Rapid Transit An important aspect of the project is Network and therefore exists mostly the 2.5 km tunnel that will run directly Maximizing station integration within its existing right of way. A through the city’s downtown core. From opportunities in the downtown core range of real estate acquisitions were a valuation perspective, the acquisition of is a critical project element, as it required to permit the construction, subterranean tunnel segments presented creates functional entrances, business future operation and maintenance a range of challenges. Compensation for connections and a more desirable of the Confederation Line, including these takings has yet to be settled in some commuting experience. It also frees up the acquisition of fee simple interests, instances, however the city anticipates the right of way on downtown streets, easements (permanent and temporary), that factors such as the depth of the upper creating a more functional public licenses and encroachment permits. Many limit of the taking, the current use of realm that balances the needs of transit of these have been stratified to separate the properties at grade, and betterment users, pedestrians and cyclists while our surface, subsurface and aerial rights, associated with the construction of providing an opportunity for an improved as required to address complexities the new transportation infrastructure streetscape. Therefore, it was an important in property acquisition for tunnel will continue to play a central role in property acquisition objective to secure construction through the downtown. determining the market value of tunnel the property rights for these integrated segments and injurious affection to station entrances. Public lands represent approximately 75 remainder lands, if any. percent of the property requirements for Complementing this objective, and in the line. The vast majority of these lands Wherever possible, the city attempted recognition of the city’s goal to proactively have been secured through complex to minimize the need for property engage private or public participants to Memorandums of Understanding with acquisitions by making strategic use of promote transit-oriented developments federal, provincial and other institutional existing city property for various project and connections at or near stations, landowners such as Parks Canada, Public requirements, such as staging areas and the city undertook certain business Works and Government Services Canada, by entering into targeted agreements for development strategy initiatives in 2008. the Ontario Ministry of Transportation, limited property rights. For example, The first step was to send out Requests for the University of Ottawa and the the city negotiated a five-year lease of a Information to private sector businesses National Capital Commission. Since a downtown surface parking lot that was and landowners along the tunnel municipality does not have the power to being held for future development. The alignment. City staff also approached expropriate federal or provincial land, negotiated agreement provides access for numerous landlords, developers, retailers, detailed and multi-faceted processes tunneling equipment in the mid-section landowners and other interested parties BY GORDON E. MACNAIR, SR/WA, AACI, P.APP were required to secure the right of of the Confederation Line tunnel, while to explore and promote opportunities way. While these complex negotiations leaving ownership of the parcel and the to integrate into downtown stations. We presented many challenges, they also future development potential of the site have currently been successful in locating provided the city with the opportunity to with the property owner. five of the six entrances for the three resolve outstanding property issues with the National Capital Commission that date back to the 1980s and relate to the construction of the bus rapid transitway. Some of the property requirements for the Confederation Line were in private ownership. The majority of these property rights were secured through negotiated agreements, although some required the expropriation process. In those instances where construction timing made it necessary to initiate expropriation proceedings, the city continued to pursue negotiated settlements with these property owners. To date, the city has completed two rounds of expropriations and anticipates moving forward with a third round in 2014 to secure a number of temporary working easements should they be required. Moving ahead on time and on budget, the 13-station electric light rail transit system is expected to be completed and operational in 2018. JULY/AUGUST 2014 Right of Way 21 tunnel stations off the right of way. This Maintenance and Storage perspective, the relocation aspect strategy resulted in downtown properties presented some challenges for the city, as connecting to the Confederation Line The land assembly needed for the many replacement properties identified underground. Negotiating the property maintenance and storage facility involved by the expropriated owners/tenants rights required for these entrances proved 18 improved properties with a total of 26 represented substantial betterments, an interesting challenge, especially since acres, approximately 340,000 square feet including new construction and larger acquiring property rights within an of building space in office and industrial premises. Notwithstanding this, all of existing building is somewhat unique buildings, 12 owners and 19 tenants. The the expropriated owners/tenants have and uncommon in Ottawa. However, we acquisition included the expropriation now secured replacement properties, and remained focused on achieving a win-win of a 10-unit industrial/commercial the city has financially settled with the scenario for both parties, and our efforts condominium in its entirety, which is majority of them. proved successful. believed to be the first expropriation of this kind in the Province of Ontario (and The facility will provide the Term sheets have been executed with all possibly in Canada). The city registered maintenance and storage of vehicles five owners, with other documents, such the Expropriation Plan in January 2012, for the Confederation Line Light Rail as construction agreements, to follow at took possession in May 2012, and entered Transit system. Construction will be a later date. Three entrances will require into occupancy agreements with most of completed in time to allow it to be used integrating with or accommodating the owners and tenants. The last tenant to do the final assembly of the vehicles existing structures such as office, mixed was vacated in March 2013. prior to commissioning. The project use and shopping centers, while a constructor, Rideau Transit Group, was fourth integrated station will require an After completing the expropriation of handed possession of the property in existing retail/office building entrance be these properties, the city undertook a April 2013, and all of the improvements demolished. A fifth downtown location property management role with respect have since been completed. The land is on a vacant parcel of land, however, to the maintenance and storage facility assembly also allowed the city to through the granting of air rights, the properties for approximately one year capitalize on a strategic acquisition for a station entrance planned for the site will and amended