Property Biz Canada
Canada Lands Corporation has its most successful year in a decade
Property Biz Canada
Mon Oct 24 2011
One of the least known federal government success stories is crown corporation Canada Lands Company Ltd. (CLC).
Established to dispose of surplus properties while maximizing value to the Canadian taxpayer, the CLC is in the midst of its most successful fiscal year in more than a decade.
This past August it announced sale of the Metro Toronto Convention Centre complex to Oxford Properties for approximately $250 million. The deal included the north building of the convention centre, the nearby InterContinental Hotel, an adjoining office building and a covered parking garage.
“We have had a really good fiscal year so far,” said Gord McIvor, vice-president of strategic acquisitions with Canada Lands Co.
The centerpiece of CLC’s holdings is the CN Tower and adjoining lands in downtown Toronto. The landmark tower is celebrating its 35th anniversary, the introduction of the sky-high EdgeWalk – a new CN Tower attraction which allows visitors to take a stroll on the outside of Canada’s tallest structure – as well as the start of construction of a mega-aquarium at the base of the tower.
The now under construction Ripley Entertainment aquarium will cement the CN Tower’s status as the city’s most popular tourist destination. “It was the first new tourism facility to be undertaken in 20 years in Toronto, the last one was the Hockey Hall of Fame,” said McIvor of the new aquarium. When completed, the 100,000 square foot aquarium will be the largest in Canada.
While its CN Tower-related activities are keeping it in the public eye, CLC’s main business is the repurposing of former Canada Forces bases across the country into residential and commercial real estate uses. Currently, the corporation has six major major projects underway from British Columbia to Newfoundland, not including its CN Tower activities.
Established in 1995 to repurpose government lands, CLC has purchased 13 former military bases from Ottawa and converted them to civilian uses, a process that is not as easy as it sounds, said McIvor.
“They are huge properties, that tend to be right downtown in cities and so people are obviously very concerned about what is going to be on those properties,” said McIvor. “But we consult widely and we have advocated always for densification because we believe that the use of the automobile should be mitigated and not have people go way out to the suburbs to live.”
The result is “European-style neighbourhoods.” CLC’s most celebrated re-development was in Calgary on what used to be Currie Barracks and is now known as three neighbourhoods: Garrison Woods, Garrison Green and Currie Barracks. “It has won just about every sustainable development award in the country.” It has won kudos from the Urban Development Institute and was the first project in Canada to get the LEED ND (Neighbourhood Design) designation from the U.S. Green Building Council.
In its most recent fiscal year, CLC earned revenue of $217.8 million and income before taxes of $38.2 million and it had property sales of $104.5 million. As always, the CN Tower provided stability for its operations, generating income before taxes of $9.7 million while real estate and corporate operations generated pre-tax income of $28.1 million.
“It (CLC) is a company that also has the advantage of having the CN Tower,” McIvor said. “Real estate is cyclical in nature but the cycles of real estate are different than the cycles of a tourism facility so we have a very good ability to have strong sustained cash flow.”
McIvor expects its shareholder, namely the federal government which also happens to be the largest landowner in the country, will provide it with plenty of projects in the future.
“The government is going through a period of deficit reduction and as part of that deficit reduction we understand that there will be certain properties that will be brought to market through Canada Lands so we are looking forward to continue playing a vital role helping the government sell some of these properties.”
Since 1995, CLC has distributed $392.8 million in cumulative distributions to the federal government in the form of dividends, upfront payments and note repayments for properties.