The city forecasts a decline in the value of Lansdowne's air rights due to an earlier Ontario Municipal Board settlement, but is largely offset by design changes and a decision not to house the Ottawa Art Gallery on that site.
As part of a mediated settlement with nine community groups in April, the city agreed to reduce the height of a residential tower on Holmwood Avenue to 10 storeys, and cap the number of units to 280. A mid-rise tower was also removed from the air-rights design.
The settlement, which was approved by the OMB in June, reduced the air rights by $3.4 million. However, the city noted its changes made up all but $200,000 of the difference.
The information is part of a report on requests for expressions for interest that will go before the city's finance and economic development committee on Thursday.
So far, there have been 26 requests for the document since the process started in September 2010, the report says. This led to confidential meetings with the interested local developers as well as some based outside the city.
Since there was no lease agreement with an office tenant ahead of construction, the meetings revealed most developers felt developing the commercial building would represent a "significant risk," the report stated.
As such, the city has decided to split the residential and office air rights to "maximize" the offers it receives, and allow parties to choose between one and the other instead of being required to do both, it added.
"Feedback indicated an interest in residential opportunities, with more limited interest in the office opportunity," the document stated.
"A desire for clarity was identified with a need to provide further details regarding design, development costs, timing for payments, legal conditions, and the overall process when the (request for offers) is issued."
The schedule for completion has been delayed due to an OMB appeal as well as an overturned court case from Friends of Lansdowne concerning procurement, the city added.
Council will review the matter in December, a month later than planned, with air-right agreements finalized in May 2012 instead of March 2012. Construction will finish in July 2014, more than a year past the original end date.
Current air rights, totalling 368,000 square feet, are for:
- The 10-storey residential building on Holmwood Avenue;
- A four-storey residential building on Holmwood Avenue;
- A 15-storey tower, with all but one storey for residential use;
- An eight-storey commercial and retail building;
- A one-storey commercial space over a parking garage.
