One of the federal government’s largest departments will cut its 40 locations in the National Capital Region down to just seven over the next six years.
Officials say the decision will result in the feds vacating a number of privately held buildings they currently occupy.
Part of the plan includes the Department of National Defence’s long-awaited move to the former Nortel building on Carling Avenue, government officials said. That has been in the works since the government bought the building three years ago.
When all is said and done, DND will go from 40 locations in the region to seven. The department will have three locations for its roughly 14,000 employees in Ottawa when the plan is completed: a building at 1600 Star Top Rd., a building downtown and the Carling Campus. There will also be four locations in Gatineau.
Government officials, who spoke at a technical briefing only on condition that they not be named, said some of the locations that DND is vacating will be used for other government departments.
However, they said the government will move out of other locations, most of which are leased from the private sector. Those locations will be released back onto the market.
Federal civil service cuts have already led the government to vacate large tracts of office space in recent years. That’s helped push the amount of available space to its highest level in recent memory.
The city had a vacancy rate of 7.9 per cent as of the third quarter of 2013, according to the most recent market report from brokerage firm Cushman & Wakefield Ottawa – a jump from six per cent a year ago.
That’s created greater competition among landlords who are trying to fill suddenly vacant office space.
Friday’s announcement means the federal government, the city’s largest tenant when it comes to private sector space, will occupy even less space once the plan is completely implemented in six years’ time.
Public Works spokeswoman Annie Trepanier, responding to questions via e-mail after the briefing had concluded, said the department is currently finalizing a plan that will decide which buildings it plans to not renew.
She didn’t have details about how much space DND has in the National Capital Region in total, since that department manages some of its own properties.
Government officials said during the technical briefing the feds have planned the transition so they won’t need to break any of the leases they currently have with the private sector.
What the government was going to do with the Carling Campus had, until Friday, been an unknown for the city’s real estate brokers.
The government paid $208 million to buy the property in 2010. However, as recently as last February, the government still lacked a budget, timeline and specific plans to make the move.
Now the feds say they plan to spend an additional $506 million to refit the building so it’s appropriate for DND employees.
The government will also spend another $41 million on what it calls “transition costs.” That’s what it will cost the government as it continues to pay the leases for the buildings it plans to vacate before the project is completed.
Employees will first start moving into the Carling Campus building in 2015, government officials said Friday.