Lean manufacturing principles are being applied to the planning and construction of a $1 billion mixed-use development near the B.C. capital of Victoria.
The Capital City Centre project in Colwood, a city of about 16,000 on the capital region’s West Shore, is being built in phases that meet market demand but no more, said the co-founder of the company that is financing the project.
“I’m building just enough for what you need at that moment but (also) what you can sell at that moment at time,” Adam Gant, co-chair and co-founder of League Financial Group, told the annual general meeting of the Victoria chapter of the Building Owners and Managers Association of B.C. on April 12.
For example, in a traditional project of this type, all the underground parking would be built at the outset at enormous cost, he said. Economies of scale might save on construction costs but they won’t help generate any revenue “for however long it takes you to build those towers,” he told the lunchtime gathering of about 35 people.
Gant did the math and concluded that it would make better financial sense to build an above-grade parking structure early in the project and then demolish it to enable underground parking when those later structures are built.
“If you compare that with the efficiencies in the construction costs by building all at once, it’s a massively bigger number that you just waste by having capital sit in the ground,” Gant said.
Ground broke on the Capital Centre project in January, about six years after it was first proposed. It will replace a decades-old strip mall that covers just under 14 acres. About half of the old shopping centre has been demolished. The rest of it will also come down, including a building now occupied by London Drugs, which will be an anchor tenant in the new project.
Gant said he expected the new London Drugs store to be completed by 2013. Two food stores are competing for a spot in the development. And a six-storey office-retail building, of which League will occupy the top three floors, would be ready in 2014.
The developers are also looking at “specific office tenant users who will help incubate their businesses,” Gant said. While he declined to name any names, or even sectors, he envisioned a business that would start by occupying a single floor and expand into more space in subsequent stages.
He also hinted at an announcement within the next two months of a scheme that “we think will actually drive demand in the project and really create the occupants to fill up a lot of the residential we have.”
When built out in 15 to 20 years, the project will boast upwards of a million square feet of office space, about 2,200 condos, and 190,000 to 200,000 square feet of retail area, Gant said in response to questions from the audience.
The project would include a mix of wood-frame buildings, townhouses, and residential towers as high as 29 storeys. It would also include innovative features like a district energy system, similar to one in the Westhills development in nearby Langford, and plug-in stations for electric vehicles.
Gant received a warm reception from the BOMA crowd, although some people expressed concerns about how the project would affect the “Colwood Crawl,” the pet name for the region’s notorious traffic congestion.
“There’s a lot of people they’re going to pack in there eventually,” said John Board, a BOMA board member who works for Kone Inc. Nevertheless, he added: “I liked his financing. I like his staging. I work for an elevator company and I like the fact there’s lots of opportunity for people in my industry.”
Bruce Scott, general manager of the Grounds Guys Landscape Management, also acknowledged the traffic concerns. “But I see people living and working in their local communities,” Scott added. “I think you’ll see a lot more of that as the West Shore grows.”
Skeptics have criticized the project since it was first proposed in 2006, Gant said. As he told the BOMA group, however, the project has evolved since then. One of the original consultants had worked on Paul Reichmann’s Canary Wharf project in London, which influenced the original vision for Capital City Centre, previously known as Colwood City Centre.
“Every single building was going to be a high-rise tower,” Gant said. “And the phasing idea at the time was build three towers at once and do the underground parking for a three-tower body.”
Rather than do that, it was decided to build the project in phases, which would mimic how cities naturally grow, he said.
“You don’t build all the underground parking in your entire downtown,” he said. “You build it one tower at a time as the need for that tower above it (happens).”
While League is taking a slow approach to this project, Gant and Arruda have been anything but slow in building their business empire since starting it in 2004.
About a decade ago, Gant, now a 32-year-old married father of three, was studying engineering at the University of B.C. and running a College Pro painting franchise. Originally from Kelowna, he dropped out of UBC to come to Victoria to join the national rowing team. At six-foot-six, he still has the lean and chiseled frame of a world-class athlete while also projecting a smiling, gentle-giant demeanour.
Gant told the BOMA crowd that he is also well aware of other large developments that are reshaping the Victoria region, such as former NHLer Len Barrie’s Bear Mountain project, which went into bankruptcy in 2010. After looking at absorption numbers for other Victoria projects, Gant said he had to “do a little gut check” and ask himself if there is enough demand in the market for a project like Capital City Centre.
“I don’t know if we actually had a good answer,” he said. “(But) we came away feeling really great about that question.”