As published on page C1 on December 9, 2006
Ottawa needs to lower price on its coast guard site
John Mazerolle
Telegraph-Journal
SAINT JOHN - The highly anticipated development of the Coast Guard site is a "long ways away" because the federal government's asking price for the site is too high, the city manager says.
Terry Totten says the city's project with the Hardman Group, a private firm, has not moved ahead because Ottawa appraised the location without taking into account how much it would cost to make the area ready for development.
"It's a wharf, so the thought that you can just go in and build there is just not going to happen," he said. He did not divulge the amount of the appraisal.
Earlier reported estimates suggested that the property - owned by the Department of Fisheries and Oceans - would sell for $3 million to $4 million, a cost that could be borne by the city and then recouped through a lease to the Hardman Group.
The scope of the $75-million project would be the largest for the uptown since the development of Market Square more than two decades ago. If the project moves ahead, the site will be redeveloped to include a hotel, condominiums, residential units, commercial and retail space, parking and an educational technology complex, all connected to Harbour Passage and the inside pedway.
When the project's details were first announced in December 2005, some officials optimistically suggested that the development could start in the summer of 2006. But the project hasn't gone very far.
"Whether it's the Coast Guard side or (the city-owned and adjacent) Peter's Wharf, any cost of the construction because of the nature of the land is going to be high," Totten said. "It's going to be difficult to make anything cost-effective down there."
The potentially high cost of construction on the site has already had ill effects. NB Liquor recently backed out of negotiations with the Hardman Group to set up a high-end store on the property because construction costs made the rental price too high.
"It would have been a good location, but it was out of our range," said Mike O'Brien, vice president of facilities for the government corporation.
One glimmer of hope for Totten is that, according to Treasury Board of Canada rules, the site must be appraised every two years. He is expecting the results of another appraisal before Christmas.
"I believe that the appraised value of that site should reflect that it would be tens of millions of dollars to get that site ready," he said.
The appropriate officials at federal Public Works, the department responsible for appraising the land, could not be reached for comment.
William Hardman, the president of the Hardman Group, was confident the project would go ahead. But he said that the federal government needs to take into account three things - the lack of any true foundation at the site, the expense of building by the water, and the poor condition of the concrete seawall that protects the property from tides and erosion.
City engineers expect the seawall to collapse within the next 20 years, he said, adding that fixing it will cost several million dollars.
He said any construction will have a built-in "substantial cost" because concrete or steel piles are required to connect the building to the bedrock.
He compared it to the steel pegs that hold up a backyard playground.
"Without the pegs, the swing set falls down," he said.
Hardman said he doesn't consider the deal stalled. A lot of work has been going on behind the scenes, he said. There is an unnamed hotel company committed to the project, and Hardman's company is ready to pre-market its residential units, he said.
He said that once the land is sold people will see work done within six months.
"We've made good progress," he said.
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As published on page B3 on December 11, 2006
High-tech changing Saint John
David Shipley
Tech beat
Telegraph-Journal
Though the pace is quiet and slow, there is a high-tech tide of change happening in Saint John.
The industrial city, known throughout the country as a blue-collar town, is embracing information and communications technology at a faster pace than other municipalities in the province.
Over the last few weeks there have been several positive portents for the Port City's ICT sector.
Consider first the recent report by the non-profit ICT industry group, propelSJ. The group's findings showed Saint John is poised to add as many as 1,300 high-paying jobs in the ICT sector.
More than 600 of those jobs will be created over the next two years, representing a 132 per cent increase in employment in the sector.
What's even more interesting is the rest of the province is only expected to add another 400 jobs over the next few years, making Saint John the centre with the majority of the growth.
To put Saint John's growth in perspective, a second Irving Oil refinery in the city, if it's built, will add 1,000 full-time jobs.
The new Canaport liquefied natural gas terminal under construction in Mispec will add 40 full-time jobs.
If propelSJ's prediction plays out, the trends seem to show that the next generation of employees in Saint John will be more likely to wear business attire instead of coveralls and work boots.
While Saint John's energy hub concept has received a lot of attention - rightfully so given the billions of dollars in projects underway or proposed - perhaps it's time to start building a greater buzz about Saint John the IT hub.
In some ways that buzz is already starting to build.
As Saint John-based New Brunswick tech guru Gerry Pond points out, ICT firms dominated this year's Saint John Board of Trade's 22nd annual Outstanding Business Achievement Awards last week.
ICT firm Centerbeam captured the gold award for business excellence, while Web 2.0-focused Evolving Solutions garnered the gold award for emerging enterprise.
Pond's own Mariner Partners also left with an accolade, getting the gold award for entrepreneurial achievement.
"To me that says something," said Pond this week. "You don't need a lot more proof that there are some things happening."
And there's going to be more ICT companies competing for the top business awards in Saint John.
Pond said while propelSJ's Launch 32 initiative, which aimed to see 32 new ICT companies start up in 32 months, hasn't launched as many companies as fast as he would have liked, more announcements about new start-ups are coming soon.
But while Saint John's tech star is on the rise, perennial rival Moncton is starting to get its geek game together.
The completion of its study on the ICT sector, which was done with the University of Austin's IC2 Institute, is a sign that Moncton is preparing to be a serious player.
Among the recommendations of the report is the creation of a business incubator in a physical building.
While propelSJ has its Catalict business incubator program in Saint John, the program doesn't provide actual office space for new start ups.
If Saint John's city council was smart, it would consider copying this recommendation by working with propelSJ and other private sector groups to open a physical building for new ICT companies.
The city could help by donating the value of the property taxes for a number of years. After all the city has cut property tax deals in the past for the energy sector and a deal on property tax for a small office building wouldn't cost nearly as much as previous deals.
Perhaps a company with some spare office space could donate the space for several years, as was done in Austin, Texas for their business incubator.
An investment by the city in creating a physical office space for new ICT startups, combined perhaps with a partnership with UNB Saint John and the private sector, could speed up the number of new ICT companies starting up in the Port City and help Saint John stay ahead of Moncton.
Saint John will likely always have gritty visual reminders of its industrial past, but smart investments and a bit of energy by the private sector and government could help it embrace its bright technological future.
David Shipley is a Moncton-based reporter for the Telegraph-Journal.
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As published on page B1 on December 8, 2006
Saint John's hot housing market tops in region
Michelle Porter
Telegraph-Journal
SAINT JOHN - Nowhere in Atlantic Canada is the housing market hotter than in Saint John, according to the latest statistics.
And the reason, analysts say, lies in the current and expected boom in the energy sector.
"New Brunswick is the strongest of all the Atlantic provinces," Alex MacDonald, regional economist with the Canada Mortgage and Housing Corporation said Thursday. "That's a reflection of continuing strong growth in housing and in the oil and gas industry. There are a number of large projects which are helping to push non-residential [construction] numbers and we expect that to continue into next year."
MacDonald was responding to an unexpected surge in the construction sector, as numbers from a Statistics Canada report for the first 10 months of 2006 show the value of building permits pushing past the $6-billion mark across the country. That's the second-highest total in history.
Overall, the value of building permits in the province rose by 7.7 per cent in the year to October, with rises in commercial permits and housing permits that were almost equal. That's just 0.3 per cent below the growth seen in Halifax. Across Canada, the value of building permits rose 10.3 per cent. Both Newfoundland and Labrador and Prince Edward Island saw declines in overall values.
But what is going on in Saint John is a different story.
"The numbers in Saint John inflate the numbers overall for New Brunswick," said Étienne Saint-Pierre, an analyst with Statistics Canada.
The value of Saint John's building permits surged by 21.4 per cent compared to the same period last year.
What does this mean?
"This mainly a reflection of the increase in demand in housing because the difference in the number of houses and the value is not very big," explained Saint-Pierre.
Bill Edwards with Building and Inspections at the City of Saint John predicted that Saint John would not see a slowdown in building activity anytime soon.
"I think what's happening in Saint John will be sustainable for a long time," he said.
The value of residential and commercial building permits issued in Saint John to the end of November is well over $101 million dollars. Last year's value peaked at $77 million dollars. The city has issued 1,142 permits, 182 of which were for multiple and single-family housing, representing 313 dwelling units. Last year, 166 housing permits were issued, representing 215 units.
The strength of the housing market is also reflected in housing starts, said CMHC's MacDonald.
"New Brunswick is showing the strongest level of growth. Single starts are declining the least amount in New Brunswick," he said.
Single starts are flat at best in most major cities across Canada because of the high cost of housing compared to income. First time-buyers tend to look at other kinds of housing, MacDonald said, such as semi-detached and condominiums.
"It's not surprising that New Brunswick is holding up well. The reason is that the economy is doing well. There is a resurgence in energy projects. There's a perception of optimism. I've seen what optimism does to an economy," he said.
"The challenges going forward will be price. That's why multiple units are already rising in New Brusnwick and Saint John. First-time home buyers are looking at semi-detached units because they still want to live in a house, but don't want the cost. That trend should continue next year, with starts focusing on higher-density units priced for the market.
NBers have the highest level of house ownerhship in Canada and New Brunswick is the strongest area of growth in term of rental construction.