Thank you. Mr. Ootes.
Debates of Feb. 16th, 1998
Topics
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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The Chair John Ningark
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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Jake Ootes Yellowknife Centre
Thank you, Mr. Chairman. Could the deputy minister confirm that Mr. Herndier and URBCO and their potential joint venture partners submitted a proposal to buy the Laing Building? Thank you.
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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The Chair John Ningark
Thank you. Mr. Lovely.
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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Lovely
Thank you, Mr. Chairman. I have to admit that the discussions that I had with URBCO, Mr. Herndier, were discussions only. I have not seen a proposal, although I understand that a proposal may have been submitted to RWED. Thank you.
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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The Chair John Ningark
Thank you. Mr. Ootes.
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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Jake Ootes Yellowknife Centre
Thank you. I understand that a proposal was submitted. Perhaps, if I can make reference to what I have been told, what this proposal was, and that was to buy the Laing Building. It was based on a variety of different options. It was a 20-year lease, they were proposing to do $2.5 million worth of renovation costs, which included office space and re-cladding of the building. Their proposal was to charge $15 a square foot and pay the government $3 million for the building. They had another option for $10 a square foot and a payment of $2 million. A final option was for $5 a square foot and $1 million. I am informed that this was discussed extensively and that a proposal was made. It was discussed extensively with some of the deputies' officials. Could he tell us if I am correct in the proposal? Thank you.
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
February 16th, 1998
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The Chair John Ningark
Thank you. We will be taking a break after Mr. Ootes' question. Mr. Lovely.
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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Lovely
Thank you, Mr. Chairman. I cannot tell you whether or not the numbers that you are quoting are entirely accurate because I really cannot remember. When we were working on the Yellowknife office space plan, we were working on a plan designed to mitigate the negative economic impacts of a major surplus in the Yellowknife market. We had proposals from a variety of companies to do creative things. One company suggested that they would give us a great deal if we would put all of our staff into their buildings. All we had to do was agree. They would buy the Laing Building and take it off the market. They had a variety of proposals associated with the Laing Building. Mr. Herndier talked to many of my staff over the years and I know the issue of the Laing Building was on the agenda quite a few times. In the final analysis, because of the numbers of organizations who were concerned about the need to maintain some competition and some fairness, it was decided to recommend to Cabinet that any new space that we enter into leases for would be entered into through a competitive process. Thank you.
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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The Chair John Ningark
Thank you. Mr. Ootes.
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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Jake Ootes Yellowknife Centre
I would like to touch base on Lahm Ridge and the Laing Building in comparison. It has been stated to us in various memos that the cost of improvements to Lahm Ridge was $500,000 and spent over the last seven years. That was in a memo from Ms. Kennedy. However, in the Arthur Laing
Building the improvements, government spent $2 million to $3 million over the last four to five years. Could I get confirmation of that, please?
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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The Chair John Ningark
Thank you. Mr. Lovely.
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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Lovely
Thank you, Mr. Chairman. I cannot verify those numbers but I can check them fairly quickly. I could perhaps have an answer on that after the break, in terms of the actual detail. One of the biggest problems, Mr. Chairman, was that the requirement for $3.9 million of additional funds for code upgrades, things like elevators and a new HVAC system, was a factor in considering the future of the Laing Building. Thank you.
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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The Chair John Ningark
Thank you. We only have a few seconds, Mr. Ootes.
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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Jake Ootes Yellowknife Centre
Thank you, Mr. Chairman. To mitigate that cost to the government, URBCO and their partners were prepared to spend $2.5 million in improvements, as I said earlier. That would cover a lot of it. Thank you.
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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The Chair John Ningark
Thank you. If you want to respond briefly, Mr. Minister.
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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Jim Antoine Nahendeh
Mr. Chairman, what the honourable Member is making reference to is a DDC proposal that came to government and not necessarily to this department. The deputy minister is not aware of those numbers from DDC, nor am I. The Yellowknife office plan was initially approved last summer and finally approved last month, in January. The whole office plan rationalization calls for the disposal of the Laing Building. The Laing Building is up for sale and there are a number of groups who are interested in pursuing it. In speaking to the Minister of Finance , he would like to see it proceed through a public tendering process. If the DDC has a proposal and it is a good proposal, then it will be considered. Thank you.
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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The Chair John Ningark
Thank you. It has been a long afternoon. We will take a 15-minute break. Thank you.
--Break
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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The Chair John Ningark
Thank you. I would like to call the committee back to order. Asset management, operations and maintenance, total operations and maintenance, $42.577 million. Agreed?
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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Some Hon. Members
Agreed.
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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The Chair John Ningark
Thank you. Mr. Ootes.
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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Jake Ootes Yellowknife Centre
Thank you, Mr. Chairman. I would like to go back to an earlier question I had. I did a conversion of the square metres of the Lahm Ridge Tower and it works out to, 29,941 square feet. Approximately 30,000 square feet. Could the Minister tell us if that is correct?
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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The Chair John Ningark
Thank you. Mr. Minister.
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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Jim Antoine Nahendeh
Mr. Chairman, we do not have the conversion. Thank you.
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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The Chair John Ningark
Thank you. We believe, Mr. Ootes, you are quite correct. Mr. Ootes.
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
Item 19: Consideration In Committee Of The Whole Of Bills And Other Matters
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Jake Ootes Yellowknife Centre
Thank you. Perhaps I can deal with some mathematics, Mr. Chairman. What I am trying to show is that retaining the Laing Building is what should have been considered, a very viable method to go versus the Lahm Ridge Tower. If my calculations are correct of 30,000 square feet, then the two departments that are in Lahm Ridge Tower could potentially be accommodated with some adjustments in the Arthur Laing Building. If that is the case, it would save the following monies because in the documentation we have been provided, to move the Executive and FMB out of the Laing Building would have cost $1.4 million. To lease the Laing Building, we would have only the operating cost in there because it is government owned. If it was sold, then the government could realize $3 million plus pay $15 per square foot. Therefore, if the Laing Building was used at $15 per square foot, the total cost of operating would be $900,000 per year. With the way that the government went, they would have to lease new space for the Executive and FMB, say, at the same cost of $15 per square foot. That would total $550,000 and Lahm Ridge, at $20 per square foot, would be $600,000 for a total of $1.1 million. The difference is $200,000 per year in cost of leasing. Over a ten-year period, let me just state I think it could be between $1 million and $2.5 million depending upon the exact cost of the square footage of the Lahm Ridge Tower. If the Executive and the FMB had moved, it would have cost $1.4 million to move. The government instead will make $3 million in return for the sale. I do not understand the economics of this situation where it paid to retain the Lahm Ridge Tower.