As Ottawa transit riders gear up for their inaugural trips on the city’s long-awaited light-rail system this weekend, OBJ is taking score of who is winning and losing as the trains take on passengers for the first time.
Winner: Landlords and businesses along the LRT line
The flow of commuters is set to irrevocably change in Ottawa, with a few well-positioned landlords, retailers and restaurants poised to benefit.
Among the biggest winners here are the owners of office towers and retail properties with LRT stations integrated into the buildings. The Rideau Centre, the Sun Life Financial Centre and the Place de Ville complex are all expected to see thousands of transit riders passing through the Rideau, Parliament and Lyon stations at peak hours.
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The Sun Life Centre underwent a multimillion-dollar renovation a few years ago to refresh and open up its atrium to prepare for a larger flow of pedestrians. That same complex also added the Queen St. Fare late last year, a European-style “food hall” concept that could see a flood of regular diners when LRT starts moving.
Dave Pridham, director of leasing with Sun Life Centre landlord BentallGreenOak, told OBJ a few years ago that LRT’s arrival will help the company secure higher rental rates as well as attract and retain tenants in the complex.
Other properties along the LRT line, including Colonnade BridgePort’s Holland Cross and Morguard’s St. Laurent Shopping Centre, might reap similar rewards in coming years.
Winner: Residential developers
The anticipation of LRT alone has been enough to spur a boom in high-rise residential developments along the forthcoming transit line. Major apartment and condo projects surrounding the LRT line, such as RioCan and Killam Apartment REITs’ Frontier development near Blair Station, have either popped up or been set into motion in the years since construction first began.
“The Blair LRT station for us is a game-changer. While I know this is a city that’s still a vehicular commuter city, I think it’s going to change,” RioCan chief executive Jonathan Gitlin recently told OBJ.
“The city’s government has taken a very bold step in intensifying the LRT infrastructure here, which will in my mind prompt a lot more developments like this. There’s nothing more logical than putting density next to transit.”
Loser: The Ottawa Champions and RCGT Park
The Ottawa Champions baseball club could find new life with a direct connection to the LRT line, but the trains might arrive too late for the team already left in dire straits by the year-and-a-half delay.
The City of Ottawa recently cancelled the pro baseball team’s lease at Raymond Chabot Grant Thornton Park – just across Highway 417 from the Tremblay LRT Station – as the club had fallen more than $400,000 behind in rent payments. The team, now in search of a new owner, signed a new agreement during the 2019 season to rent the space on a per-game basis while the city considers other uses for the park – including opening up sections of the land for development.
Part of the problem, according to city staff reports, was that the Champions’ attendance suffered from two missed seasons of LRT service as construction stretched on for nearly a year and a half past the original completion date.
“We were expecting the LRT to be ready last year,” team owner Miles Wolff told OBJ earlier this summer. “There have been several things that we didn’t expect that came up, so here we are.”
While the Champions might still have time for a late-inning rally to salvage the team’s future, LRT is now arriving when the team is already far behind in the count.
Winner: Ottawa-based suppliers and subcontractors
Though Rideau Transit Group was the primary contractor on the $2.1-billion LRT line, a number of Ottawa subcontractors and suppliers felt the economic spillover from the massive infrastructure project.
OC Transpo boss John Manconi told OBJ last year that some $800 million in contracts had been awarded to local suppliers since construction began back in 2013. Subcontractors have also been integral to work on the LRT line, such as DST Consulting Engineers, which was among the local companies helping to dig out the underground portions of the system.
“To have Ottawa firms get this experience and exposure is great,” said George Thomas, DST’s principal, when work was just getting underway. The local firm has since strung its phase one work into another subcontract, as it’s been tapped by East West Connectors to conduct pre-construction surveys for the second stage of LRT.
Loser: Suburban commuters
While many Ottawa residents living and working along the LRT line will find Monday’s commute a little bit quicker, those who live in the city’s east or west ends but work downtown might find the train makes commuting more complicated.
Though OC Transpo bus routes will continue unchanged in the first few weeks after LRT’s launch, October will see routes such as the 90s-series buses disrupted in order to connect to the light-rail line. In many cases, this will require a transfer at Tunney’s Pasture or Blair Station to hop on the train going downtown.
Allan Wille, the co-founder of downtown tech firm Klipfolio, is among those who expected to find his commute disrupted after the LRT comes online. He told OBJ last year that while he’s happy the city is investing in mass transit, the line won’t be a major selling point for talent recruitment until it stretches out to Orléans, Barrhaven and Kanata.
“It’s not going to be a game-changer. If we want everybody to really start adopting it, it’s got to be convenient. With this phased approach – and it’s slow – habit-building may take a long, long time to come into effect,” he said.
Some downtown tech CEOs, however, seem excited about the progress of launching a light-rail transit system.
To-be-determined: Taxpayers and Rideau Transit Group
The final question to be decided at the close of Stage One LRT is whether the books are settled between the City of Ottawa and Rideau Transit Group. The months of delay and missed deadlines in completing the LRT contract left the city on the hook for millions of dollars in overrun costs related to road closures and keeping extra bus drivers on the payroll – costs it hopes to pass on to RTG.
Earlier this summer, the city’s deputy treasurer calculated a bill of $34.4 million, which factored in three $1-million penalties for missed handover dates. Since that estimate, RTG has missed another handover date, incurring another $1-million penalty. Three days ago, the city announced it was holding back $59 million from RTG’s final payment to cover costs related to the delay.
The city said it expects to recoup the full costs related to the LRT delays from RTG, but that’s assuming the construction consortium does not challenge those fees in court. Should any dispute on costs wind up in court, the final winners and losers from LRT’s first phase are likely still to be determined.
