Edmonton Economic
Development
Corporation 10-Year
Capital Plan (Capital
Budget)
Recommendation:
That the November 3, 2008, Edmonton
Economic Development Corporation
report 2008EEDC001, be received for
information.



Report Summary
This information report details the 10year capital plan of the Edmonton
Economic Development Corporation
(EEDC) for the period 2009-2018
(Differentiating requirements to
support assets owned by EEDC and
by the City of Edmonton.

Report



The October 16, 2008, EEDC Board
meeting raised concerns that the
City of Edmonton had not been
provided with the appropriate
background information regarding
total funded and unfunded capital
requirements to implement EEDC’s
long term Business Plan.
The current proposed funding
allocated to EEDC over the 10 years
is $6.1 million of which $3.6 million is
for tenant upgrades at the Research
Park and $2.5 million for equipment
and furnishings at the Shaw
Conference Centre.
No other City funding (i.e. general
financing or tax supported debt) is
allocated to EEDC over 2009-2018.



The EEDC’s 10-year capital plan
totals $97.3 million for the period
2009 – 2018. EEDC owned assets
at the Research Park total $55.1
million and City owned assets total
$42.2 million, mainly at the Shaw
Conference Centre.
The funding requested for EEDC
assets ($55.1 million for 2009-2018)
will support the continued success of
the Research Park’s incubators and
future expansion of the Park into the
new Southlands development. Other
funding alternatives will also be
investigated by EEDC.
The funding requested for City
assets managed by EEDC ($42.2
million for 2009-2018) will support
the sustainment and upgrades of the
Shaw Conference Centre
infrastructure and equipment in
accordance with the Facilities Master
Plan and the Gateway Park visitor
information centre.
Currently no funding is allocated
toward the sustainment of the
Conference Centre’s infrastructure,
other than the $2.5 million starting in
2010 for furniture, fixtures and
equipment
No capital has been spent for the
sustainment of the Conference
Centre since February 2007. This
asset will not continue to be a viable
conference facility if this trend
continues.
The longer term requirements for the
potential expansion of the Shaw
have not been included in the ten
year capital requirements
Attachment 1 provides an overview
of the EEDC’s 10-year capital plan.
ROUTING – City Council | DELEGATION – M. Hale
WRITTEN BY – M. Hale | November 3, 2008 – Edmonton Economic Development Corporation 2008EEDC01
Page 1 of 2
E
2
Edmonton Economic Development Corp. 10 Year Capital Plan
Focus Area


The investment in Shaw Conference
Centre infrastructure ensures the
asset’s useful life is maximized and
that the facility remains competitive
and profitable. Thus meeting the
City’s goal for transforming
Edmonton’s urban form and
diversifying Edmonton’s economy.
The continued growth and success
of the Research Park is critical to
supporting innovation and
diversifying Edmonton’s economy.
Budget/Financial Implications

Continuing to not fund capital for the
Shaw Conference Centre will result
in escalating annual operating costs,
reduced future revenue and return
on investment and shorten the life of
the asset.
Attachments
1. EEDC 2009-2018 Capital Plan
2. Map of Proposed Capital Projects
3. Description of Capital Projects
4. Shaw Conference Centre Facilities
Master Plan
5. 2009-2013 Capital Priorities Plan
Report (City of Edmonton)
Others Reviewing this Report
 A. Maurer, City Manager
 C. Warnock, Chief Financial Officer
and Treasurer
Page 2 of 2
Attachment 1
Highlights of the 2009-2018 Capital Plan
The Edmonton Economic Development Corporation (EEDC) 2009-2018 capital plan identifies capital
investment priorities consistent with EEDC’s 2009 Business Plan and City Council’s revised strategic
direction and vision. The key focus of the capital plan is on the continued success and growth of the
Edmonton Research Park and the sustainment and upgrade of the Shaw Conference Centre. The
success of the Research Park and Shaw are both critical in pursuit of Edmonton’s strategic goal of
achieving a more highly diversified economy and continued capital support is necessary to achieve this
end. Similarly, continued capital for the sustainment of the Conference Centre facilities is in alignment
with the strategic goal to transform Edmonton’s urban form, and the explicit priority to refocus spending
on renewing existing infrastructure. Due to the ownership structure of EEDC, current planning
incorporates the requirements of both the assets it directly owns (like those within the Research Park)
and those which it manages on behalf of the City (like the Conference Centre).
City owned assets
The Shaw Conference Centre is a substantial asset for the city and supports the City’s goal of “improving,
continuously, the capacity and capability of the organization in the delivery of services to business and
citizens”. Managing this asset for the City requires a clear and committed funding program to maximize
the useful life of the asset and ensure it remains competitive. The Conference Centre reached its 25th
anniversary in 2008. Due to the age of the conference centre, engineering and architectural studies were
commissioned in 2006 to determine the amount of building upgrades required over the next 25 years.
The studies created two bookend scenarios for the capital requirements. The City’s Assessment group
(B&FM) concluded that a current day capital requirement of $10M was necessary to ensure the
conference centre was maintained in a safe and functional manner. An external consultant provided an
estimate of $45M could be used to complete a full modernization of the facility.
Using these inputs, EEDC (with input from the City of Edmonton) completed a Facilities Master Plan for
the Conference Centre that required $19.8M in the next 10 years to not only maintain the facility, but
ensure it remains competitive with other conference centers. Within the Master Plan, impacts for inflation
have been overlaid on to the capital requirements that adds an additional $17.8M on top of the 2006
forecast. In total the first 10 years of the plan calls for $37.7M, with $2.3M required in 2009 for meeting
salon and air handling upgrades. The Conference Centre received no material capital to support the
Master Plan in 2008, has not spent any capital on sustainment since February 2007 and currently the
entire plan remains unfunded. Continued lack of investment in necessary upgrades will accelerate the
building’s decline and reduce the ability of the facility to attract national events that create economic
benefit for the Edmonton Region.
In addition to the physical infrastructure, the furnishing and equipment are all heavily used on an annual
basis. Continuing expenditures are required to maintain the assets that have no permanent connection to
the structure of a building or utilities (such as chairs, tables, electronic equipment and partitions).
Furniture, Fixtures & Equipment (FF&E) is currently funded for $440k in 2010 and $415k from 2012
through to 2016.
The Shaw is operating near capacity, with utilization rates that are best in class, but this also results in
lost business because of restricted availability. In its current form, the facility is near its maximum
economic benefit for the City. Preliminary analysis has been initiated to investigate potential scenarios for
expanding the conference facilities; however no formal alternative evaluations have occurred. The longer
term capital requirements for this potential expansion may occur during our planning horizon but no
capital estimates are included in EEDC’s 10 year capital plan. If expansion activities are pursued further,
appropriate individuals will be engaged and all potential funding sources would be sought, considering the
size and magnitude of the project
Page 1 of 3
Report: 2008EEDC01 Attachment 1
Attachment 1
The other city assets operated by EEDC are visitor information centers. The Gateway Park visitor
information centre is the busiest visitor information centre in Alberta and is located on the south edge of
the city in the middle of Highway QE 2. Preliminary plans for new highway construction in the area would
require the relocation of the current facility in 2010. The current 10 year forecast includes an unfunded
replacement cost of $2.0M for this relocation. These costs may very depending upon the Province’s plan
for the highway.
Proposed funding allocation for City owned assets for 2009-2018:
Tourism (Gateway Park)
Shaw Conference
Unfunded expenditures for City owned assets for 2009-2018:
Tourism (Gateway Park)
Shaw Conference
$
2.5M
2.5M
$ 2.0M
37.7M
39.7M
EEDC owned assets
Within the Research Park, EEDC owns 3 buildings focused on the incubation and second stage growth
for regional advanced technology commercialization. In the next 10 years capital will be required for
further tenant improvements, upgrades to advancing technology standards and growth.
The
Biotechnology Business Development Centre (BBDC) requirements of $1.6M in 2009 and $1.5M in 2010
results from the expiry of current tenant agreements and development of swing lab space for future
tenants. Renovations and repairs are required at the Research Centre 1 building for $0.5M in 2009 to
extend the useful life of the facility and ensure safety standards are maintained. The Advanced
Technology Centre will also require funding in 2010 for expected tenant improvements resulting as
existing 3 year leases expire, as well as additional funding in 2013 and 2016 to ensure the longevity of
the facility. On Block 1 in the Research Park, EEDC is expected to require $4M in 2010. There is
substantive interest in Lot 1 by developers and Biotech companies, and it is anticipated that construction
on that space will remain on schedule for 2010 commencement.
The Research Park is experiencing great success and is expected to reach its capacity very soon. In
order to continue to provide space and opportunity for the commercialization of regional innovation, within
our research park environment, EEDC is currently developing plans to expand the research park into new
“Greenfield” space. Preliminary estimates for this Southlands expansion forecast the capital to support
this to be $39M for land acquisition and infrastructure, spread over 2011 through 2013.
Funding the capital for assets EEDC owns is the responsibility of EEDC, however in most instances
financing is received from the City. It is therefore critical that these capital needs are incorporated into the
City plans to ensure the financing is available. Within the existing City capital forecasts only the capital
associated with the BBDC and Research Centre 1 are explicitly included. Funding for the continued
evolution and maintenance of the Advanced Technology Centre (a 20 year old building) remains
unfunded. Furthermore, the capital required for new development on Lot 1 or the Southlands expansion,
all be it in preliminary development, have not be funded (or financed). EEDC is investigating alternative
funding avenues for this expansion and will make every effort to minimize the financing requested from
the city. In aggregate this results in the 2009 capital requirements for EEDC owned assets being funded.
However only 30% of the capital required in EEDC’s 10 year capital plan to support EEDC owned
facilities and none of the funding to support growth within the existing park or contemplated expansion are
funded.
Page 2 of 3
Report: 2008EEDC01 Attachment 1
Attachment 1
Proposed funding allocation for EEDC owned assets for 2009-2018:
Existing facilities
Growth
Unfunded expenditures for EEDC owned assets for 2009-2018:
Existing facilities
Growth
$ 3.6M
___-___
3.6M
$ 8.5M
43.0M
51.5M
Challenge
EEDC has several unfunded priority projects within the current 10 year capital plan for the City of
Edmonton. Specifically, no base level funding is provided for the sustainment for the Shaw Conference
Centre infrastructure and continued expansion of the Research Park. The Conference Centre has a clear
and defined Facilities Master Plan that will ensure the longevity and success of the facility going forward.
The Research Park expansion is still in the development stage, but will become a priority in the next few
years. Both of these initiatives are critical to the success of EEDC’s approved business plan which
supports the City’s stated goals.
EEDC will pursue alternative funding sources where appropriate;
however it is imperative that the City understand EEDC’s long-term direction and capital funding needs
for the next 10 years.
Capital Program Summary
Edmonton Economic Development Corporation
10 Year Capital Program
(in thousands of dollars)
Project
Project Name
Capital Owned by EEDC
Edmonton Research Park
05-99-3001
Research Park - Tenant Improvements
05-99-3004
Research Centre 1 Building Upgrades
05-99-3002
Biotechnology Business Development Centre
08-99-3003
Advanced Technology Centre
07-99-3005
Advanced Technology Centre Building Upgrades
08-99-3006
Research Park - Southlands *
08-99-3007
Research Park - Lot 1 Joint Venture
Capital Owned by City of Edmonton
Visitor Information Centres
08-99-3008
Gateway Park - Replacement
07-99-3006
Visitor Information Centre - Facility Upgrades
Shaw Conference Centre
06-99-3004
Shaw Upgrades
06-99-3004
Inflations
06-99-3004
Shaw Building Upgrades (Facitilies Master Plan)
06-99-3003
Shaw Upgrades FF&E
Total Funded
Total Unfunded
Total Capital
Page 3 of 3
Status
funded
funded
funded
unfunded
unfunded
unfunded
unfunded
(Forecast)
2008
3
6,967
500
1,600
2010
2011
2012
2013
2014
2015
2016
2017
2018
2,000
12,000
5,000
12,000
2,000
-
1,760
547
1,290
671
350
267
939
933
2,270
2,254
6,504
6,459
1,497
1,487
1,720
1,708
1,519
1,509
2,000
1,986
19,849
17,821
10,066
9,997
2,307
1,961
440
617
1,872
415
4,524
415
12,963
415
2,984
415
3,428
415
3,028
3,986
37,670
2,515
20,063
2,100
2,307
4,407
1,940
22,461
24,401
12,617
12,617
415
15,872
16,287
415
6,524
6,939
415
12,963
13,378
415
2,984
3,399
415
8,428
8,843
3,028
3,028
3,986
3,986
6,115
91,170
97,285
6%
94%
20,063
12
7,039
7,039
2018+
TOTAL
2,000
-
57
unfunded
unfunded
2009-2018
TOTAL
500
3,100
1,500
7,000
39,000
4,000
1,500
1,500
15,000
4,000
unfunded
funded
funded
2009
Report: 2008EEDC01 Attachment 1
Attachment 2
Map of Proposed Capital Projects
Lot 1
$4M (2010) –
Construction of biotech building
Unfunded
Advanced
Technology Ctr
$1.5M (2010),
$7M (2013+beyond)
tenant improvement
& building upgrades
Unfunded
Research
Centre One
$0.5M – tenant &
lab improvements
Biotechnology
Bus Dev Ctr
$3.1M (2009/2010)
ongoing development
of lab, office & tenant
space
Funded
Funded
Southlands
Expansions
$39M – (2010-2012)
Development of new
research park. Land
and infrastructure
Unfunded
Edmonton Research Park
Shaw Conference Centre
Interior
Mechanical
Electrical
Inflation
FF&E
$1.7M (2009)
$15.0M (20092018) Meeting
rooms, atrium glass,
loading dock &
elevator
$0.1M (2009)
$3.0M (2009-2018)
Heating, air
handling, control
systems & plumbing
$0.1M (2009)
$3.0M (2009-2018)
Exterior lighting,
security, fire alarm
& low voltage
systems
$0.6M (2009)
$17.8M (2009-2018)
Infrastructure
sustainment
estimates are in 2006
dollars
$0.0M (2009)
$2.5M (2009-2018)
Furniture, fixtures and
equipment (noninfrastructure)
Unfunded
Unfunded
Unfunded
Unfunded
Funded
Page 1 of 1
Report: 2008EEDC01 Attachment 2
Attachment 3
Descriptions of 2009-2018 Capital Projects
Capital Owned by Edmonton Economic Development Corporation:
1. Research Centre One Building Upgrades, $500k (2009, funded)
Tenant improvements and lab and building upgrades. Research Centre One
houses emerging companies that have moved beyond the incubator stage and
often need specialized space, such as wet labs or small manufacturing facilities
2. Biotechnology Business Development Centre (BBDC), $3.1M (2009-2010, funded)
2009 funding of $1.6M is for the completion of ‘Area F’ in Phase One of the
renovation, as well as development of existing lab and office ‘white space’.
$1.5M in 2010 will support further improvements to the building following the
expected departure of an anchor tenant. The BBDC is a multi-tenant facility
designed to help growing companies in the secondary stages of development
access subsidized flexible lab space for the development of biotechnology
products and services to unleash their innovative and commercial potential.
3. Advanced Technology Centre, $1.5M (2010, unfunded)
Funding is required for expected tenant improvements as current 3 year tenant
leases are expected to expire. The award-winning, 43,000-square-foot building
opened in Edmonton Research Park in 1988 as a business incubator for up to
33 startup companies. Tenants must be research-oriented startups requiring
access to office space, labs, boardrooms and office equipment.
4. Advanced Technology Centre Building Upgrades, $7.0M (2013, 2016, unfunded)
2009 funding of $2.0M is for continued tenant improvements, with the additional
$5.0 required in 2016 for additional upgrades to the then 28 year old building.
5. Research Park – Southlands, $39.0M (2010-2012, unfunded)
Estimated funding costs are for the desired expansion of the Edmonton
Research Park into Greenfield space located near the existing park. Capital
expenditures are for site acquisition, preparation and infrastructure
development; excluding service costs.
The current research park was
established in 1980 and has been near capacity for several years. Today, the
park supports over 35 companies, employing over 1500 scientists, engineers,
doctors, technicians and support staff in 17 buildings.
6. Research Park – Lot 1, $4.0M (2010, unfunded)
There is substantive interest in Lot 1 by developers and Biotech companies,
and it is anticipated that construction on that space will remain on schedule for
2010 commencement.
Page 1 of 2
Report: 2008EEDC01 Attachment 3
Attachment 3
Capital Owned by the City of Edmonton:
7. Gateway Park – Replacement, $2.0M (2012, unfunded)
Contemplated changes to Highway 2 south would result in the Gateway Park
visitor information centre having to be relocated in 2012. Gateway Park is the
busiest visitor information centre in Alberta and replacement costs are
preliminarily estimated at $2.0M. These costs may very depending upon the
Province’s plan for the highway.
8. Shaw Building Upgrades – Facilities Master Plan, $37.7M (2009-2018, unfunded)
The Facilities Master Plan (see Attachment 4) is a comprehensive 10 year
capital plan focused on maintaining the 25 year old Shaw conference centre’s
positioning as a competitive North American facility. The City’s Assessment
group (B&FM) concluded a study in October 2006 defining a capital requirement
of $10M was necessary to ensure the conference centre was maintained in a
safe and functional manner. The current 10 year plan builds upon this “lights
on” forecast, to a total of $19.8M (refined down from a Cohos-Evamy external
report) to ensure the facility maintains its strong positioning in the competitive
Conference Centre market.
The plan also incorporates appropriate
accommodation of inflation over the original 2006 forecast, amounting to
$17.8M for a total ask of 37.7M. Forecast spending for 2009 through to 2011
($2.3M, $2.0M and $0.6M respectively) will cover elements like renovations to
the meeting level salons; replacement of some atrium glass; replacement of
boilers; and other mechanical and electrical updates. No capital funding was
provided to the Conference Centre infrastructure or the Facilities Master Plan in
2008.
Interior Upgrades ($1.7M for 2009, $15.0M over 10 years)
This funding will include upgrades to the meeting salons, carpeting, lighting,
floors and atrium glass and signage; expansion of the loading dock; and
upgrades to the elevator/escalator system.
Mechanical ($60k for 2009, $3.0M over 10 years)
This funding will include replacement and upgrades to the heating systems;
water chillers; air handling systems; control systems; and plumbing.
Electrical ($0 for 2009, $1.7 over 10 years)
This funding will include new exterior lighting; low voltage control systems;
security and card reading systems; as well as fire alarm upgrades.
9. Shaw Upgrades FF&E, $2.5M (2010-2016, funded)
Furniture, Fixtures & Equipment are currently funded. The expenditures are for
movable furniture, fixtures or other equipment that are have no permanent
connection to the structure of a building or utilities (such as chairs, tables,
electronic equipment and partitions). These items are subject to significant
wear and tear and need to be maintained or replaced periodically in order to
maintain the Conference Centre’s quality of product.
Page 2 of 2
Report: 2008EEDC01 Attachment 3
Attachment 4
Shaw Conference Centre Facilities Master Plan
Architectural
Interior Design Upgrades
Source
Bridge Across Atrium Interior
Add Finished Ceilings
Add Finishes
Replace Carpets
Complete Renovations to Meeting Level Salons
Additional Decorative Lighting
Loading Dock Expansion
Incline Elevator Replacement
Riverviewroom / Atrium Access
Cohos
Cohos
Cohos
Cohos
Cohos
Cohos
Cohos/City
Cohos/City
Cohos
Existing West Entrance at Jasper Avenue / Possible
Lease Property
Replace Jasper Avenue Canopy
Replace Sliding Doors at Jasper Avenue Entrance
Replace Glazing to Lobbies
Replace Wood Soffits & Lighting
Replace Atrium Sealed Glass Units
Window Washing Equipment for Atrium Glass
Upgrade Exterior Landscaping
Repair South Loading Road & Entrance Roads
Concession Lobbies
Upgrade Existing Washrooms
New Exterior / Interior Signage
Replace Interior Landscaping
Cohos
Cohos
Cohos/City
Cohos
Cohos
Cohos/City
Cohos/City
Cohos/City
Cohos/City
Cohos
Cohos
Cohos
Cohos
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018 2009 - 2018
$200
$1,500
$200
$1,500
$2,000
$2,000
$6,504
$500
$6,504
$500
$1,519
$1,519
$1,197
$70
$1,197
$70
$200
$200
$800
$200
$200
$800
$200
$200
$300
$300
Mechanical
Heating System Upgrades (Boilers)
Replace Burners for Boilers
Replace Low Pressure Steam Boilers
Replace High Pressure Steam Boilers
Replace De-Aerator
Replace Shell and Tube Exchangers
$200
Cohos
Cohos/City
Cohos/City
Cohos/City
Cohos/City
$200
Chilled Water System Upgrades
Replace Two Water Chillers
Replace 3rd Chiller
Cohos/City
Cohos/City
$400
$400
Cohos/City
Cohos/City
Cohos/City
Cohos
Cohos/City
$600
$500
$500
$600
$500
$60
$200
$500
$300
$300
Air Handling System Upgrades
Upgrade Seven Major AHU's
Upgrade Six Constant Volume AHU's
Upgrade One Kitchen MAU
Replace All VAV Terminal Devices
HVAC System Duct Cleaning
$60
$200
Controls System Upgrade
Replace Pneumatic Controls with Digital
Upgrade Digital Controls
Replace Main Control Panel Boards
Cohos
Cohos
Cohos/City
Plumbing System Upgrades
Replace Water Heaters
$40
Cohos/City
$40
Fire Protection Systems Upgrades
Replace Fire Protection Sprinklers Heads
$150
Cohos/City
$150
Emergency Generator Fuel System Upgrade
Replace UnderGround Fuel Storage Tank
Cohos/City
Electrical
Additional Power Distribution to Halls A,B,C
Clean Existing Floor Ports to Halls A,B,C
New Exterior Lighting to Match Hall D
Sound System Upgrade
Low Voltage Lighting Control Upgrade
Exterior Doors (Exterior Enclosures)
Replace Atrium Light Fixtures
Exisiting Service Transformers Upgrade
Emergency Power Transer Switch
Motor Control Center Upgrade
Miscellaneous Interior Lighting Upgrade
Telecommunication Upgrade
Secutiry and Card Reader System Upgrade
Fire Alarm System Upgrade
Total
$50
Cohos
Cohos/City
Cohos
Cohos
Cohos
Cohos
Cohos
Cohos/City
Cohos/City
Cohos/City
Cohos
Cohos
Cohos/City
Cohos/City
$139
Inflations Adjustments
FF&E (furniture, fixture & equipment)
Page 1 of 1
$139
$400
$400
$20
$20
$600
$
Total Infrastructure
$50
-
$1,760
$1,290
$350
$547
$671
$2,307
$1,961
$440
$939
$2,270
$267
$933
$617
$1,872
$415
$500
$600
$500
$6,504
$1,497
$1,720
$1,519
$2,000
$19,849
$2,254
$6,459
$1,487
$1,708
$1,509
$1,986
$17,821
$4,524
$12,963
$2,984
$3,428
$3,028
$3,986
$37,670
$415
$415
$415
$415
Report: 2008EEDC01 Attachment 4
$2,515
Attachment 5
2009 – 2013 Capital Priorities Plan - Summary Report Excerpts
2009 - 2013 Capital Priorities Plan
Summary Report (excepts)
Proposed Funded Capital Plan1
Budget
2009-2013
2009
Requested
2010
2011
2012
2013
415
415
415
415
2012
2013
Total
Tax Supported Operations
Edmonton Economic Development Corp.
Economic Dev, Research Pk & Tourism
Shaw Conference Centre
3,600
3,600
2,100
2,100
1,500
440
1,940
-
3,600
1,270
4,870
2009 - 2013 Capital Priorities Plan
Summary Report (excepts)
Proposed Unfunded Capital Plan2
Budget
Requested
2009-2013
2009
2010
2011
Total
Tax Supported Operations
Edmonton Economic Development Corp.
Economic Dev, Research Pk & Tourism
Shaw Conference Centre
2,307
2,307
2,307
2,307
20,500
1,961
22,461
Sources
1. Page 21, 2009 - 2011 City Council Capital Budget Discussions
2. Page 39, 2009 - 2011 City Council Capital Budget Discussions
Page 1 of 1
Report: 2008EEDC01 Attachment 5
12,000
617
12,617
14,000
1,872
15,872
2,000
4,524
6,524
48,500
11,281
59,781