Frito-Lay loses appetite for Barrhaven warehouse build proposal
Fate of Fallowfield/416 lands likely to rest with OMB, developer says
Published on July 12th, 2010
Ottawa Business Journal
A global snack-food manufacturer is back in the market for a new Ottawa distribution centre after pulling away from a proposal to build a 100,000-square-foot facility in Barrhaven.
Frito-Lay Canada says it is in discussions with several landlords and developers to accommodate the company’s expansion.
“Our business has been growing in Ottawa and Eastern Ontario,” says company spokesperson Sheri Morgan.
“As our business grows, so do our space requirements.”
Frito-Lay currently leases space inside a one-storey, seven-bay building at 37 Enterprise Ave. in the Merivale Industrial Park south of Hunt Club Road. The property has a total of 31,225 square feet, according to the BOMA Ottawa Commercial Space Directory, and is owned by Freedman Holdings Inc.
Ms. Morgan says an expansion of Frito-Lay’s current location is also on the table and that the company does not expect to finalize its plans until next year.
Frito-Lay was listed as the lead tenant in a development application filed with the city for a vacant triangular 27-acre land parcel near Highway 416 and Fallowfield Rd. in Barrhaven.
Along with the 100,000-square-foot Frito-Lay warehouse and office, which would house 230 employees, application documents show there is also potential for a 220,000-square-foot office, a 105,000-square-foot industrial building, a 130,000-square-foot R&D facility and a 60-room hotel on the site.
Developer DCR Phoenix had applied to amend the city’s official plan to allow warehouses on the property, which is currently designated for “prestige” business park uses.
The application was scheduled to be dealt with by the city’s planning committee last week, but was referred back to municipal staff after Frito-Lay withdrew from the proposal, according to a city spokesperson.
DCR Phoenix planning manager Bill Buchanan confirmed Frito-Lay is no longer being considered as a potential tenant.
He says he hopes the application will come back to the planning committee in the next two months. While Mr. Buchanan says his firm is looking at whether to continue pursuing warehousing opportunities, he believes there is a “very strong argument” to support it and predicts the application will ultimately end up being appealed to the Ontario Municipal Board.
City staff, the head of the Barrhaven Business Improvement Area and the councillor for the area all oppose allowing warehouses to be built on the site.
“We already have suitable space for (warehousing) and plenty of it,” says BIA executive director Andrea Steenbakers, pointing to the vacant land in the South Merivale Business Park, at Prince of Wales Drive.
She argues the DCR Phoenix property should be set aside for high-value employment. Ms. Steenbakers adds the area is a gateway to Barrhaven and says the community would be ill-served by the sight of industrial buildings and tractor-trailers off the highway.
The “gateway” concept is also cited by city staff, who say the application is inconsistent with the Nepean Secondary Plan. However, Mr. Buchanan says that planning document is a decade old and in need of updating. He also notes the property cannot be seen from Highway 416 because of landscaped berms and says “gateways” are poorly defined by the city.
“They keep saying Strandherd Drive is a gateway and we want it to look nice.
That’s fine. So tell me, what do you define as a gateway? What do you feel is needed to make it look nice? And frankly, we get nothing out of them,” says Mr. Buchanan.
The opposition to DCR Phoenix’s proposal comes as the city faces a shortage of serviced industrial land in accessible locations.
Colliers International sales representative Warren Wilkinson says many logistics companies are being forced to make do with older, dilapidated buildings. He adds build-to-suit opportunities are few and that companies are being forced into short-term lease renewals.
“The challenge, especially if it is located within the Greenbelt, is the cost per acre,” he says.
“If you are using it as an investment, it is difficult to get a decent return and make the numbers work.”
Last year, a municipal consultant released a report that concluded too much of Ottawa’s vacant industrial and business park land is unserviced, far from highways or cut into unworkably small parcels to accommodate the city’s future employment growth.
Ottawa’s new economic development strategy, tabled at a city committee last week, calls for a more active approach to managing the supply of employment land.
Suggestions include putting a higher priority on extending trunk water and sewer lines to high-demand properties, establishing a fund to brand and market existing employment areas and swapping low-demand employment lands for those that are in higher demand, but inadequately zoned or publicly owned.