Nanaimo City Hall responds to questions on $15.7-million annex plan

Friday afternoon, the City of Nanaimo issued the following press release, in response to public questions regarding its plan to replace the existing annex with a new, $15.7-million structure.

The News Bulletin's previous story (City spending $15.7 million on annex) was published in our May 12 print edition.



Friday, 13 May 2011

Answers to questions regarding new City Hall Annex

The following questions and answers are provided further to the City press release and

backgrounder dated 2011-May-02:

Why does the existing City Hall Annex at 238 Franklyn Street need to be repaired or replaced?

The existing City Hall Annex needs to be replaced because, in the event of an earthquake, it is

not safe for the public and for employees. The building was found through an engineer’s

analysis to be substantially deficient in seismic design and construction. Given the serious

deficiencies identified, the building had to be seismically upgraded or alternate office space had

to be found for the City’s customers and staff.

The following is a quote from the Engineer’s report:

“Upon review of the seismic condition of the building, we conclude that in a seismic event, there

is a high risk of significant damage or partial collapse of the building occurring.”

“The seismic deficiencies of the building are such that the building requires upgrading to make it

life safe for its occupants.”

The summary report section of the engineer’s report has been posted on the City’s website at:


Why did the city not know of the deficiencies before it was purchased?

A due diligence review done at the time of purchase (1999) revealed that it had deficiencies but

not as severe as the City eventually learned during the project planning phase. The order of

magnitude of the expected repairs in 1999 dollars was approximately $20 per square foot or

around $800,000. In preparing to do the work, we learned that the current City Hall Annex was

not built to the drawings that were relied upon for the due diligence and that the repairs would

be much more expensive.

What would be involved in repairing the existing Annex? What would it cost and why won’t

this be done instead of building new?

Repairing the existing Annex would require moving the staff out either in rotation or all at once

to rented office space to allow for the engineering upgrades to be done.

Prior to amending the budget for the construction of a new City Hall Annex, the City had

budgeted $6.2 million over 3 budget years for the repairs ($4.3 million for engineering and

construction costs, $0.8 million for contingency, $0.5 million for repairs/replacements related

to the upgrade, $0.5 million for temporary office space and $0.1 million for moving costs). Until

these works were substantially done, these numbers would remain best estimates only.

Council compared the expected outcome of the upgrade; (i.e. continued operation of an

inefficient building near the end of its service life that was approaching capacity coupled with

significant disruption in public service during the renovation period) to a purpose-built, efficient

building that had some capacity to grow with the community.

Renovating the existing building would result in a structure that would meet 60% of the BC

Building Code, meaning that those in the structure during a seismic event would likely be able

to exit the building safely, but the building would likely be damaged to the point of having to be

demolished. A new building would be constructed to 100% of the BC Building Code meaning

that, not only would occupants be likely to find escape routes, but also that the building is

expected to be repairable after such an event. (During the design process, Council will consider

constructing the building to a post-disaster seismic standard to allow the building to be

operational directly after a seismic event).

With these factors in mind, Council concluded that a new building is a better investment.

Why doesn’t City Council ask the taxpayers about this project, like in a referendum?

The City needs to keep the building safe for the dozens of public who come into the current City

Hall Annex each day. Further, as an employer, the City has an obligation to keep a safe work

premises. The current City Hall Annex is not safe. Accordingly, the City has no choice but to

establish a safe building.

In accordance with the Community Charter, the City Council has the legal ability to borrow for

periods of less than 5 years without public assent (i.e. a referendum or other approval process).

What public process has the City used for the City Hall Annex replacement?

Council’s first analysis involved reviewing existing structures for suitable office space. While

this process was not directly fruitful, it did show that there were a number of ways to provide

for the required space. To properly evaluate the possibilities, City Council needed to benefit

from the creativity of the private sector, which it did through a public Expression of Interest call

(“EOI”) issued on 2010-Jun-15. For this process, Council intended that it would continue to use

the existing City Hall for providing public service, as it has since 1951. Accordingly, it decided

that staff currently working in the existing Annex must largely remain downtown in close

proximity to the main City Hall.

The EOI may be viewed at:

The City received 15 submissions from 13 proponents. The various submissions from the

private sector proponents included the following possibilities for the City to evaluate:

 Build on City owned land

 Build on privately-held land

 Build for City to lease

 Build for City to buy

 Build for City to first lease then buy

 Build in phases

 Build mixed use for City to occupy with other uses

 Modify an existing privately-owned building for the City to lease

 Modify an existing privately-owned building for the City to buy

 Add on to City Hall

All of the above were represented in the submissions in a number of combinations.

The City considered all of the submissions starting in August 2010, short-listing the field from 15

down to 6 by late October then down to 2 submissions by mid-December. In March 2011,

Council directed staff to proceed with construction of a new building at 411 Dunsmuir Street by

entering to a contract with ICI/Windley Contracting.

Why did Council evaluate the proposals and make the decision “In Camera”?

The responses to the Council’s EOI were submitted to the City in confidence. The submissions

included land and buildings that may have been the subject of future negotiations with existing

tenants and leases that landlords do not want to unnecessarily disrupt. Further, Council

needed to be able to deliberate its options without exposing its position to the proponents.

The Community Charter allows Council to deliberate and pass resolutions “In Camera” in the

above circumstances so that the financial interests of the taxpayers are protected.

What are the general specifications for the new building at 411 Dunsmuir Street?

The new building is three storeys, totalling 42,900 sq. ft., with 20 parking spaces underground

and 20 parking spaces off the Wesley Street access at the rear of the building. The building

design will allow for an expansion if there was a future requirement for additional floor space.

The building is being designed to meet the City zoning bylaws for use and for height.

How will the new City Hall Annex be paid for?

Funds for the project will come from money set aside in the budget for the Annex upgrade,

reserves and short-term borrowing of up to $4 million. The short-term borrowing will generate

a one-time tax increase of approximately 1.1% starting in 2012 and ending in 2016.



For further information regarding this project, please contact:

Mayor John Ruttan OR Douglas Holmes, Assistant City Manager/

250-755-4400 General Manager, Corporate Services


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