When you’re buying a site that has been called the cradle of Canadian history, it’s probably not going to be an ordinary real estate transaction.
(Google Street View image)
By David Sali
Jonathan Westeinde can attest to that.
Mr. Westeinde is the founder of Ottawa-based Windmill Development Group, a firm that completed arguably the most scrutinized land deal of the year when it inked an agreement to buy Domtar’s property on Albert and Chaudière islands and in downtown Gatineau earlier this month.
On paper, Windmill purchased 37 acres of former industrial land. In fact, it’s a place of immense significance to aboriginals, with deep roots in Canada’s economic history, located little more than a stone’s throw from Parliament Hill and under the jurisdiction of two cities.
“There definitely were some challenges,” Mr. Westeinde said in perhaps the understatement of the year. “It’s not (as) straightforward (as) buying a parking lot. There are a lot of complexities to work around.”
He’s not popping open the champagne yet, either. The lands must be rezoned for mixed-use development, meaning the deal might not close until the first quarter of 2015.
“It was definitely a roller coaster and will remain a roller coaster until 15 years from now when the whole thing’s built out,” Mr. Westeinde said. “There’s lots of exciting things to happen here, but there’s also lots of complications and lots of difficult waters to navigate through. But that’s what keeps it exciting.”
Windmill plans to present its rezoning application to the city councils of Ottawa and Gatineau in the spring. Mr. Westeinde said the firm has already consulted extensively with both cities, the federal government, the National Capital Commission and the aboriginal community.
Dealing with that many interest groups and levels of government, as well as the inevitable liability issues that come with purchasing former pulp and paper land, has consumed almost all of the company’s energy for the past six months, he said.
“We’re not the type of developer to draw some plans and say, ‘This is what we’re doing, take it or leave it,’” he said. “You’re never going to get 100 per cent alignment – that’s the development business. But we will expend an inordinate amount of time up front now really making sure that we have consulted.”
Windmill, which has forged a reputation as one of Canada’s greenest developers, has a bold vision for the property that includes waterfront restaurants, cafes and public parks, along with low-rise, highrise and affordable housing and historical exhibits.
“We really want to make this something that will put our nation’s capital on the map with another destination for people to come to,” Mr. Westeinde said. “If we want to go look at comparable communities to what we’re trying to create, we have to get on a plane and go over to Northern Europe or the Middle East, where they’ve really done some leading-edge master planning community concepts.
“We want to have that here, and have people flying into Ottawa to take a look at what we’re doing. We have to understand there’s going to be a lot of scrutiny and take that very, very seriously.”
The sale of Domtar’s lands was a long time coming. Various groups have been calling for the property’s redevelopment for decades, and once Domtar closed its Gatineau mill in 2007, it began searching for a new owner.
Initially, the company looked at selling the lands to another paper manufacturer, said Stewart Marcoux, Domtar’s vice-president of asset redeployment. A couple of firms showed interest, he said, but ultimately walked away.
“All of them thought the site was too expensive,” he said. “For a paper mill complex, the deal just didn’t make sense.”
For a while, it appeared the federal government might step up, but that fell through.
“Unfortunately, it just didn’t pan out,” said Mr. Marcoux. “Once we concluded the federal government wasn’t going to be involved in the transaction – directly, anyway – we started looking at private developers. We were waiting for the most suitable developer to come along, someone that would be able to take this site to the next level and had a vision for it.
“A lot of people, I’m sure, would have liked us to do something with it much earlier, but it’s not as easy as it might appear from the outside to sell a property of this nature.”
Windmill was among the first developers to call in late 2010.
“It’s hard to find real estate that’s located in a fantastic location like this that gives you the opportunity to really build an integrated community like that,” Mr. Westeinde said. “It fits very well with our business model, and it’s a very rare opportunity. That real estate is of great historical value to the city of Ottawa and Gatineau, but it is also arguably some of the best real estate in the city, when you see where it’s located, its access to transit, the fact it’s all waterfront. All those metrics are there.”
Once Domtar sold the site’s hydroelectric assets to Energy Ottawa’s affiliate Chaudière Hydro LP in October 2012, it turned its full attention to finding a buyer for the remaining property. The company talked with a few other developers before calling Windmill last spring with the news it had won the bid.
“At that point, we felt pretty elated that we might actually be able to drive this forward,” said Mr. Westeinde. “It was a mix of obviously tremendous excitement, but also a heavy burden and responsibility because this is one of those developments that can wreck us if we do it wrong. So it’s also got a bit of fear and trepidation to it, but that’s all part of the excitement of moving it forward.”
The company’s track record as a platinum LEED developer made the difference, Mr. Marcoux said.
“We believe in sustainable business practices and I think Jonathan and his team’s vision is very positive,” he said. “I’m very optimistic. I think Domtar has signed with the right partner here … that can take this property to a new level.”