In the shadow of L’Esplanade Laurier, business is tough and a solution seems far away

December 19, 2025

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On a typical workday in the years before the pandemic, Thali was the place to be for lunch. The Indian restaurant at the foot of the towering L’Esplanade Laurier office complex would open its doors at 11:30 a.m. and by 11:45 about 100 downtown workers had already come flooding in, recalls owner and chef Joe Thottungal. “Those were the best days,” he said of the eatery he opened in 2018. “We were only open for lunch because it was more than enough for us to be sustainable. It was very unique. People weren’t driving (to reach us). They would just come down from upstairs.” During the 50-year history of L’Esplanade Laurier, the two gleaming, 23-storey towers occupying a full city block at the corner of Laurier Avenue West and O’Connor Street were home to some of the federal government’s most powerful departments, including the Department of Finance. “Imagine if there were 2,000 to 3,000 employees working there,” Thottungal added. “If 10 per cent came to see us, it’s 200 people. I would only need about five per cent to fill the place.” Then, the pandemic. Thali lost much of its customer base almost overnight. To complicate matters further, in 2023, the federal government announced a list of properties across Canada that would be earmarked for disposal, with 21 of those properties in Ottawa. One was L’Esplanade Laurier, representing about one million square feet of office space in the downtown core that has remained largely vacant for the better part of six years. At Thali, Thottungal said foot traffic has picked up, especially for dinner, but is nowhere near the numbers before the pandemic. And it’s starting to show on his bottom line. “Now we have to be open for lunch and dinner to make ends meet … 2025 was not our best year.” Of course, there are a number of factors at play. Even with more people coming downtown to work, Thottungal said fewer people are buying their lunches compared to before the pandemic. “(People don’t) have disposable income to spend. Before COVID, people were spending. They would go out to eat two or three times a week. Now when I ask around, they say, ‘We have to pack our lunch because it’s getting expensive,’” Thottungal said, adding he’s also seeing fewer lunch meetings as more workplaces limit spending budgets. Ongoing issues related to parking and transit have also made it difficult. Still, the current state of L’Esplanade Laurier and the uncertainty surrounding its fate loom large. Thottungal says he isn’t the only one feeling the effects of the vacant complex, with surrounding businesses having experiences similar to his own. Ultimately, Thottungal isn’t sure what will happen. While rumours have circulated about the building being converted into residential units, Thottungal doubts that will happen. “When I signed the lease in 2018, they told me that, in five or six years (the building) will be given away,” he said, adding he doubts anything will happen for at least another three to four years. According to Darren Fleming, CEO of Real Strategy Advisors, office space in the downtown core totals about 17 to 18 million square feet. L'Esplanade Laurier represents about six per cent of the core’s office total space. “To have that amount of space that is out of place, it creates a gap. It’s dead space in the middle of the core. That’s not good for anybody, because ground-floor retail in the downtown core is really an ecosystem. You don’t just need public servants coming down to eat sandwiches. They need to consume utilities, enter parking garages and fill prescriptions. They’re a part of the downtown ecosystem. “Ground-floor retailers depend on foot and drive-by traffic unless they’re a destination. For example, your dentist. Once you’re a patient there, you’ll seek them out, but a dry cleaner or a restaurant? They’re often convenience purchases that you’re only making because you’re close by. And if one whole city block is just an island, it means you’ve got underperforming retail.” Part of the current dilemma is that there has been little news from the federal government since 2023 about the properties on the disposal list. “The challenging part is by saying nothing, the federal government has just left us with this island and there’s no real plan (for its future),” Fleming said, adding that realtors are also finding it difficult to lease retail spaces in the vicinity of L’Esplanade Laurier. A 2024 report by the Downtown Ottawa Revitalization Task Force suggested that converting L’Esplanade Laurier and other federal buildings on the disposal list into residential complexes would be “critical priority” for downtown Ottawa. At a recent event in Ottawa, Prime Minister Mark Carney suggested the Jackson Building at 122 Bank St., just up the street from L’Esplanade Laurier and also on the disposal list, could be a candidate. “Over the course of the new year, the federal government will transform the Jackson Building (with) the Canada Lands Company. We will be able to use this vacant space to build new affordable housing,” Carney said. But while the Jackson Building is a “strong candidate” for residential conversion, buildings such as L’Esplanade Laurier are not, according to Shawn Hamilton, principal at Proveras Commercial Realty. “If the floorplates are too large, it becomes inefficient to subdivide the floorplates down into apartment-sized units, so they’re not like a bowling alley or inefficiently large … The City of Ottawa planning guidelines recommend a floorplate of 8,500 to 11,000 square feet. Anything larger than that becomes inefficient, and the Jackson Building falls into that sweet spot.” L’Esplanade Laurier does not. “The floorplates are over 20,000 feet and it may even be 25,000 feet,” Fleming told OBJ. “If you’re trying to create apartment (units), you’ve got to think about the distance from the exterior, where natural light comes in, to the core (of the building). If the market demands 1,000- to 1,500-square-foot units, you’d end up with a bunch of little bowling alleys with windows at one end. It’s not very desirable and it’s pretty hard to convert something that big. “The problem we’re facing is that, unless someone completely guts and renovates that building, bringing a million square feet of new office space onto the market would really act as this vortex, pulling rents and everything down around it.” What’s the solution? “Other than a fire?” Fleming quipped. “We need a large, institutional-level user, if they’re going to use it as-is.” While Fleming would have liked to have seen the site house a new arena for the Ottawa Senators, he said that post-secondary institutions might be a better fit. “It’s very close to public transit. It’s got a big parking garage and it’s got a lot of footprint,” Fleming said, citing the example of the former Constitution Building at 305 Rideau St., which is now Theo, student housing for the University of Ottawa. Centretown BIA executive director SabriNa Lemay is aware of the effect on the surrounding community, including businesses, saying that vacant spaces like L’Esplanade Laurier are contributing to “major losses in the area.” “We are working hard to create programs that allow for change to happen (and for) new businesses to come in. A place like L’Esplanade (Laurier) has so much potential – enough potential to become a tourist attraction to the area,” Lemay said in an email to OBJ. “We are always ready to explore this and have been.” The BIA has been creating more placemaking projects to attract people to Centretown to help animate the area. For example, it recently announced it would turn Snider Plaza into an urban park to create more greenspace downtown, inspired in part by the success of the “Street Seats” pilot project this summer. That project converted parts of Florence, Frank and McLaren streets into pedestrianized areas. In a survey conducted by the city, 66 per cent of respondents said they visited nearby businesses more frequently because of the project. But the real responsibility for at least the start of a solution lies with the federal government, in Fleming’s view. “There’s a reluctance from anyone to take (L’Esplanade Laurier) on, because of the instability of who’s going to rent it. It’s possible that the federal government could recommit to that space if they’re ordered back as part of a good stewardship, but there are certainly newer, better and more up-to-date buildings that could accommodate any back-to-work footprint.” He added that it’s up to the government now to present a plan so things can move forward. “To the extent that the Government of Canada feels any empathy for the plight of urban centres, which they emptied out by their own lack of strategy, you would think they would be willing to come forward and have a voice at the table. When you look at all this re-energizing of the core that the (Ottawa Board of Trade) is doing, (the federal government) is not there. Where is the political will? “This is not just about Ottawa. This is the capital. This is one of their assets that they’re ignoring. What kind of leadership are they showing by doing this?”