By Brian Slemming
Any day during the summer, you can find a line up of people waiting to buy a ticket for an express elevator ride up 553 metres to take in the spectacular view of Southern Ontario from the CN Tower in Toronto. The tower, opened in 1976, is one of this country’s most popular tourist attractions. Each year more than 1.5 million people make the trip to the top and at an average cost of $25 the attraction grosses almost $40 million each year. Gordon McIvor, speaking for the owners, says, “It is extraordinarily successful. We own a property that is far more famous than our company is.”
Garrison Woods celebrates its association with its military past by retaining existing street names from the former Canadian Forces Base.
McIvor is vice-president of strategic acquisitions for Canada Lands Company, which is the CN Tower’s owner. Canada Lands is a federal Crown corporation, which acquired the CN Tower when the government privatized Canadian National. The railway giant, which was the original owner and developer of the tower, was privatized through a share offering that did not include the tower. The government preferred to keep the tourist attraction but wanted ‘hands-off’ management, so Canada Lands Company was an obvious place to park the business. That decision placed Canada’s tallest piece of real estate with an organization that owes its total existence to real estate.
While ancient alchemists failed in their attempts to turn base metals into gold, the alchemists at Canada Lands are experts at turning largely worthless real estate into a developer’s dream. Canada Lands receives no funding from the federal government, and in fact it has returned $370 million to the government in dividends from successful real estate deals.
“When we were set up in 1995 people wondered why the disposal of unwanted government property was not left to the private sector,” says McIvor. “Prior to our formation, that was how the government disposed of unwanted assets. An astute auditor general pointed out that the government was missing out on hundreds of millions of dollars… So Canada Lands came into being.”
The company purchases assets from the federal government that are no longer required. It buys from federal departments at “fair market value” and then begins a process of public consultation to canvass ideas for use of the property in question. “We believe that real estate is a local activity. We open offices where we have acquired property. When that project is completed we close the office down and move to other areas,” says McIvor. When the “project is completed” the property has undergone a rezoning process and has been sold to private industry or developers. It is that rezoning or up zoning that can turn an unused, out-dated desolate military base into prime real estate gold.
Located on the 156-acre former Canadian Forces Base Calgary, the Garrison Woods development has won many urban design awards.
Every property that Canada Lands owns is for sale, with one exception – the CN Tower. “That stays with us,” says McIvor. Everything else is open for offers, but don’t look for any fire sales. The corporation has no need to rid itself of anything – it can just sit out price declines and recessions, and only sell when there is a profit.
So successful has Canada Lands become that foreign governments, with their budgets under stress, have been flying to Toronto to see just how the operation works. Representatives from China and the United States have recently visited Canada Lands. Presumably these foreign information seekers can take the opportunity to visit the Metropolitan Toronto Convention centre while they stay at the Intercontinental Hotel – both properties are part of Canada Lands’ diverse portfolio.
So what are these properties that the government declares are not needed? Old military bases are high on the list of surplus properties. Some of these bases were built in the 1940s and are environmentally polluted. Asbestos was an essential building material when the bases were built and now lands have to be cleaned up before they can be disposed off. That’s Canada Lands’ task. So far the corporation has handled 11 bases across the country from Newfoundland to Alberta. Six have already been cleaned up, rezoned and sold to developers.
The process of adding value to the properties begins with soliciting local reaction to basic development ideas. “We begin (the consultation process) with a basic land-use plan. Then we work with individual city planning departments, members of the local real estate business, architects, builders, designers and the general public,” says McIvor. The intent is to get ideas and concerns from local people. When a plan has been agreed upon the corporation issues a request for proposals. Once an acceptable proposal has been received, the property is sold and the private sector takes over.
Canada Lands is proud of the work it has done with a variety of properties. “Many of those military bases are right downtown,” says McIvor. “But we are able to plan their revitalisation and develop mixed-use communities that combine a variety of mixed housing and recreational facilities.”
Canada Lands has not only found a use for unwanted buildings and property, but it has discovered a way to get increased value as well. The company has received international recognition for the redevelopment and sustainability work it has done and received many awards, both domestic and international.
McIvor sums up the company’s achievements this way: “Our projects have become very respected. In addition to the awards we are building a reputation for the quality of our projects, and that is what we are about, quality.” And, let it be added, making a profit.
