The “Dream team” behind what is arguably the largest and most complex waterfront redevelopment in Canada has taken full ownership as the multi-billion-dollar project continues to unfold in the National Capital Region.
In its Q2 report, Dream Impact Trust reported that it, along with Dream Asset Management Corp. (DAM), had acquired the remaining third-party interest in the 34-acre Zibi redevelopment which spans property along the Ottawa River in the cities of Ottawa and Gatineau.
Ownership of the share will be split 50/50. The purchase was settled with a cash payment of $9.1 million and a promissory note with a face value of $5.5 million.
The seller is Theia Partners, which counts among its principals Ottawa’s Jeff Westeinde. For years, he has been Zibi’s public face, well known as an active investor and entrepreneur with a strong focus on sustainability and cleantech in real estate. He continues to serve as president of Zibi Canada.
Transition to income asset
“My role is largely unchanged,” Westeinde told RENX. “Theia continues to work with its partners at Zibi on high-level strategy onsite, leading the sustainability file and community engagement.”
For Zibi’s syndicate of investors, the long-term plan has always been for it to become an income-generating development. Serving as an asset management firm is much more in Dream’s wheelhouse than it is for Theia, Westeinde said.
“Now is as good a time as any,” he said of the sale. “My confidence in the team at Dream to continue to take Zibi in the right direction is huge.”
Zibi remains on track for a completion date in 2032.
“I think we’ve got the best project and development team in the region,” said Gordon Wadley, COO of Dream Office REIT. “They have worked really hard through COVID to mitigate any risks or delays.” But while 2032 remains the target date, “we are not holding ourselves to that,” he added. “We want to do it right.”
Zibi a complex development
Just getting the redevelopment off the ground took years, thanks to a complex tangle of political, environmental and historical considerations.
Zibi includes shoreline and islands in two provinces (Ontario and Quebec) and two cities, on land that is sacred to Algonquin First Nations (Zibi is the Algonquin Anishinabe word for river).
A Crown corporation, the National Capital Commission, is also a major stakeholder.
“Zibi goes way beyond bricks-and-mortar development,” Wadley said. “Sustainability, climate resilience and social equality have never been more front and centre at the forefront of society. These have always been our key pillars.”
Zero-carbon affordable housing
In pursuit of that, Canada Mortgage and Housing Corp. (CHMC) announced in July a $70-millon investment for Zibi. Of that amount, $60 million will be used to construct Zibi Block 10. This 15-storey building will provide Gatineau with 162 new units of much-needed rental housing.
The balance will be applied to connect 200 affordable housing units to the region’s first zero-carbon District Energy System (ZCU).
The ZCU relies on post-industrial waste energy for heating, and the Ottawa River for cooling. So, Zibi will not only include affordable housing, but also, affordable housing that sets a new standard for sustainability and carbon reduction.
Zibi checks all the boxes
All this ties in with Zibi’s goal to adhere to all 10 principles of the One Planet Living framework developed by Bioregional and the World Wildlife Fund. These principles include eliminating greenhouse gas-emitting energy sources and encouraging social equity.
Wadley and Westeinde said it’s important that Zibi embody these principles and also serve as a living example to educate. Block 10 will also include, on its ground floor, an education centre ideal for anyone from engineering and urban planning students to the general public.
“I am picturing throngs of students coming and spending the afternoon to learn a little about the site,” Wadley said. “That’s something which we couldn’t be more proud of.”
What’s next at Zibi?
Six of Zibi’s 44 planned buildings, which comprise commercial and residential space, are expected to be occupied by the end of 2021. One of these is the eight-storey, 158,000-square-foot class-A office building on East Chaudiere Island which has the federal government as the anchor tenant.
Other buildings currently under development and predevelopment include:
– Block 10: 162 residential units in Gatineau. This is the 15-storey building which includes financing from the July CMHC announcement, at the corner of Eddy Street and Rue Jos Montferrand.
– Block 11: 149 residential units, 11 storeys, in Gatineau on Rue Jos Montferrand, where development started earlier this month.
– Block 206: 207 residential units, 25 storeys, started this past spring on West Chaudiere Island, with delivery in Q2 2023.
– Block 207: 80,000 square feet of commercial class-A, seven storeys, started in conjunction with Block 206 (West Chaudiere Island), for delivery in Q2 2023.
– Block 210: a 30,000-square-foot heritage structure bricks-and-beam retrofit that Wadley says is unmatched in the region. It’s located on Albert Island, adjacent to the Canadian War Museum.
– Block 7: “Shovel Ready” upon sufficient preleasing (160,000 square feet of commercial), this six-storey mixed use also includes retail at grade. Located in Gatineau at the corner of Rue Laurier and Jos Montferrand. This one has the short 24-month lead time upon leasing commitments. Wadley said approvals are in place and site work has begun to achieve that shorter lead time.
The development timelines for the Block 207, Block 7 and Block 210 commercial buildings require preleasing commitments. For these buildings, Wadley said the dates are estimates and active discussions are underway with prospective tenants.