News
1. IMPing along
Examiner transportation columnist Erica Butler reviews the highlights from Halifax council’s opening budget talks on transportation and the Integrated Mobility Plan.
Click here to read “IMPing along: under Halifax’s new transportation plan, what will change?”
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2. “The building boom is not sustainable”
Turner Drake, the real estate intelligence firm, issued a press release yesterday under the headline headline “A 5% OFFICE VACANCY RATE IN HALIFAX? COMING IN 2042!” It reads:
The vacancy rate in Halifax’s CBD is up over a year ago — not surprising, with an additional 338,694 ft.² of rentable space on the market, 80% of it Class A. Vacancy now sits at 17.32% … a far cry from the 5% considered a healthy market. How far? 625,750 ft.² of the 879,665 ft.² of currently vacant office space would need to be leased to restore equilibrium to the downtown office market. At the average absorption rate of the past five years, i.e. 25,420 ft.² per annum, it will take 25 years to achieve a 5% vacancy rate with the current building inventory … but more new supply is currently under construction. These are the conclusions from the latest of 24 rental surveys recently completed by Halifax real estate counsellors Turner Drake & Partners Ltd.
The surveys are thought to be the most comprehensive ever conducted in HRM: a team of trained researchers collected rental, operating expense and vacancy data for 317 office and industrial buildings, some as small as 5,000 ft.², with an aggregate rentable area of over 20.0 million ft.²
The bellwether for Halifax’s office market is the downtown Central Business District (CBD), where vacancy reached 17.32% in December 2017, up 2.7 percentage points from a year ago (14.64% vacancy in December 2016), and a frightening 15.2 percentage points above the 15-year low of 2.16% vacancy rate in December 2008. It has been a shockingly fast climb, driven by a construction boom of new office space coming to market in the face of a changing market. An aging population means a reduced workforce. Added to that, companies are changing how they use office space, downsizing their total footprints via fewer square feet per employee. The trend towards virtual commuting and more collaborative work spaces have made this possible: individual offices are not au courant.
The Class A market now has 150,433 ft.² of vacant space — the equivalent of 56% of the 269,169 ft.² of new space which was added to the market in the past year; Class A net rental rates have fallen 0.45% year over year in the face of a vacancy rate which climbed to 21.8% from 16.2%. A lull in new space coming on stream in 2018 will allow demand to catch up, briefly, before more space comes on stream starting in 2019. The building boom is not sustainable, and comes at a price beyond even the taxpayer cost of the government subsidies which contributed to it. Landlords of space old and new will see their rental rates kept low due to an imbalance of supply and demand. The city’s tax base stands to suffer as property assessments will be (justifiably) reduced for buildings whose revenues are depressed. Heritage properties, expensive to maintain and operate, will continue to be placed at risk unless heritage preservation incentives are increased to outweigh the economic incentive to demolish them: the very identity of Halifax as a historic city stands in the balance.
3. Scotian Basin drilling approved
A press release from the Canadian Environmental Assessment Agency:
The Honourable Catherine McKenna, Minister of Environment and Climate Change, today announced that the proposed Scotian Basin Exploration Drilling Project is not likely to cause significant adverse environmental effects and the project can proceed. The project is an exploration drilling project proposed by BP Canada ULC located approximately 230 to 370 kilometres off the southeast coast of Nova Scotia.
In reaching her decision, the Minister considered the Canadian Environmental Assessment Agency’s Environmental Assessment Report. The Report includes the Agency’s conclusions and recommendations on the potential environmental effects of the project, the proposed mitigation measures, the significance of any adverse environmental effects and the follow-up program.
As part of the Environmental Assessment Decision Statement, the Minister established legally-binding conditions, including mitigation measures and follow-up requirements that the proponent must meet throughout the life of the project. Implementing these conditions will reduce or eliminate the potential effects of the project on the environment.
As a next step, the proponent is required to obtain the appropriate regulatory authorizations and permits before the project can be carried out.
More information on the Scotian Basin Exploration Drilling Project can be found here.
4. Matt Whitman does something stupid
“Halifax regional councillor Matt Whitman is under fire after retweeting a letter from a white supremacist organization on Thursday afternoon,” reports Alexander Quon for Global:
The letter, written by ID Canada and addressed to Halifax Mayor Mike Savage, was critical of the recent decision by the city to remove the statue of its controversial founder Edward Cornwallis.
“Canadians expect the memory of our European founders to remain unpolluted by revisionist attitudes,” the letter reads.
“This incident is a worrying manifestation of a brutal disregard towards the accomplishments of Canada’s European founders.”
ID Canada describes themselves as an “ethno-nationalist and identitarian youth movement” that says Canada was “never meant to be a melting pot of third-world migration.”
Many of the tweets on ID Canada Twitter account link to videos or images with anti-Islamic and anti-immigration messages.
Whitman’s retweet prompted this response from fellow councillor Waye Mason:
@matlantivex You are retweeting a neo-nazi hate group. I am speechless. What the hell is wrong with you?
— Waye Mason 🇺🇦 (@WayeMason) February 1, 2018
In case you need a scorecard, here’s the Examiner’s catalog for “Matt Whitman does something stupid”:
Reverse networking edition
Tell a thin-skinned cop to #GetALife edition
Chinese fire drill edition
“I’m not racist, you’re the racist” edition
Garbage detective edition
“Negro” edition
Chinese junket edition
Genius edition
Mexican Matt edition
“You should play basketball” edition
And now: My Nazi pals edition
I can’t decide if the reverse networking thing is stupid or just dumb, and I actually defended Whitman’s criticism of Action Man Scott Warnica, but there’s only so much explaining away allowed here. The full weight of stupidity has long ago tipped the scale.
And there’s two and a half years until the next municipal election.
5. Port-a-potty
An RCMP release from yesterday:
February 1, 2018, Dutch Settlement, Nova Scotia … Halifax District RCMP is asking for the public’s assistance in locating a stolen portable toilet.
The Royal Flush portable toilet was stolen from a worksite on Highway 277 in Dutch Settlement sometime between January 26 and January 31. It is described as being blue, with a white roof and red trim. A logo with Royal Flush and telephone number is attached to it. The portable toilet was empty at the time of its theft.
I have a file of port-a-potty photos:
6. Volta
Yesterday, the government announced $2 million in new funding for Volta Labs. I still haven’t seen any metrics on what constitutes “success”… but anyway, I’m told that there was an event at the Maritime Centre to mark the announcement, and that for some reason (I don’t know why) a group of Indigenous people showed up to protest. If anyone knows anything about that, please let me know.
7. Cecil Clarke
Cape Breton Regional Municipality mayor and soon-to-announce PC Leadership candidate Cecil Clarke has come out as gay, reports the CBC:
Clarke said someone “wanting to possibly shame” him threatened to expose his personal life, so he made the decision to share the information himself.
“If that’s homophobia and the fact that I’m gay in political life, then shame on people that do that,” he told CBC’s Mainstreet Cape Breton.
When I first read that, I thought, Wouldn’t such an outing be met with a collective yawn? I mean, aren’t we way past shaming people for being gay? But maybe not; there are still an awful lot of small-minded bigoted people out there.
And the threat of the outing was stressful, Clarke said, as he had been sexually abused as a child:
“When I was four and then seven, I was sexually assaulted as a child. I thought I’d recovered very well from that and that I had the love of a family that was there for me and a community that supported me. This week, all of that hurt and pain came barrelling back.”
He did not provide details of the abuse, which he said was “swept under the rug.”
“The RCMP of the day were at the door; I remember the images. It was like, ‘OK, how do we make this go away?’ And that was it.”
Views
1. William Johns
“Back in the 70s, I squandered a lot of time searching for one of Nova Scotia’s finest craftsmen; the problem was he had died well over a hundred years earlier,” writes Stephen Archibald:
The object of my desire was a Welshman named William Johns. From about 1835 to 1865 he operated iron foundries in Halifax that made the best decorative cast iron ever produced in Nova Scotia.
In the later nineteenth century, almost every town in Nova Scotia had an iron foundry making: stoves for cooking and heating, agricultural and lumbering machinery, fittings for the vast wooden shipbuilding industry, and equipment for coal and gold mines. The iron foundries have all vanished and so have most of their products.
William Johns started in the early days of the iron foundries in Nova Scotia and kept his business going for 30 years. His products have a high degree of finish and an elevated sense of design. And most important for us, he marked his work, so 180 years later we can say: Johns made that!
Government
No public meetings today.
On campus
No public events.
In the harbour
5am: Itea, container ship, arrives at Fairview Cove from Norfolk
6am: E.R. Tiamping, container ship, arrives at Pier 42 from New York
7am: Selfoss, container ship, arrives at inner harbour anchorage from Cebu, Philippines, awaiting berth at Pier 42
3:30pm: NYK Artemis, container ship, arrives at Fairview Cove from Norfolk
4pm: Schippersgracht, cargo ship, sails from Pier 37 for sea
4:30pm: Itea, container ship, sails from Fairview Cove for Liverpool, England
6pm: E.R. Tiamping, container ship, sails from Pier 42 for Kingston, Jamaica
Footnotes
The groundhog isn’t peer-reviewed.
In defence of Matt Whitman, I should point out that Waye Mason is also not perfect. He does use double spaces after a period.
Re: Protest at Volta
Engineers Nova Scotia was hosting a professional development information session for members about fracking.
From the website:
The Good, the Bad and the Ugly of Hydraulic Fracturing – Halifax – SOLD OUT
Feb 1, 2018 11:40 AM – 1:00 PM
Presentation Outline:
This presentation will give a very simple and brief overview of the history of oil and gas in the Maritimes and beyond. The presentation will also outline the hydraulic fracturing process and shows that exploration and production of oil and gas can be done safely in Atlantic Canada while benefiting the local economy and environment.
The protesters showed and more or less took over the talk and it ended early.
Since the beginning, the No Frack group have asked the O&G industry to provide the factual recorded data that details how many water monitoring wells were placed adjacent to the reported 157000 shale gas wells that industry has said they fracked safely and to provide the water monitoring test results to back up their safe fracking claims… but the O&G industry has ignored the request. The information presentations the industry makes restate the same information over and over, but when ever they are asked to provide facts to back up their claims, they never come through. Put facts before the public, not just the same old marketing guff. This leads the protesters to believe either the industry has not done significant water quality monitoring or that the results do not support their claims that everything is always done safely. Provide facts in the form of a detailed written report that can be reviewed by anyone… everyone has heard the marketing guff.
The Turner drake report should come as no surprise since similar crystal ball gazing has occurred in comments made to the Halifax Examiner on a number of occasions before. If there is no development room left downtown, then developers will perhaps start building structures in more rural growth centres. In order to fill office spaces downtown, one needs appropriately sized businesses that can afford to locate downtown… new businesses with sustainable services to offer…. now there is a concept that presently defies a solution. Plus many people say Halifax does not have a parking problem; but the people who might fill the presently vacant office spaces will need to park somewhere. It is beyond belief that everyone will want to or be able to take public transit… even if public transit could meet the needs of those new office workers.
Maybe one or two of the existing downtown developers will partner up to start building the best public transportation solution of the future… that being a subway. A subway is really the only solution that beats the existing traffic congestion and routing problems that plagues today’s public transit system. The subway system can be built in slow time to meet the needs of the 2040 downtown business growth estimates. And before people say a subway will cost too much, the cost can be spread over the next hundred years… after all, Halifax will likely be still here at that time in the future, eh? It is time to stop wasting money on bandage efforts to restructure Halifax’s existing road system… the money saved will help pay for subway development. The tunnel boring machines of today are certainly up to the job; but does our Regional Council have the ability to step outside the box and implement long term development plans for the future that will be beneficial?
BE BOLD Halifax, BE BOLD.
It’s stupid for a councillor to retweet white supremacists (sorry, “Identitarians”) but there’s something even more off-putting about Whitman’s position on Cornwallis.
Whitman believes that we should be celebrating genocidal imperialists because of their “European heritage” or at least sympathizes enough with that view to retweet a white supremacist group that also holds those beliefs. Sure, if he knew they were white supremacists he probably wouldn’t have retweeted them but the fact remains: Whitman’s beliefs about Cornwallis match those of a white supremacist group.
Stephen Archbald is such an interesting man. I would have liked to have known him while I lived in Halifax. I enjoy EVERYTHING he has contributed to the Examiner.
I’m sure it would be a real treat just to sit down and talk to the man about the beauty and history of Halifax and also shed a tear for what we have lost.
Sometime last summer, a Royal Flush port-a-potty was delivered to the property right next door where a new home has been built (at the speed of molasses). In addition to the on-site workers who have used the facility, numerous “randoms” in a variety of city-owned and private company vehicles pull up all the time, exit their rigs and relieve themselves (I suppose) before getting back on the road. Neighbourhood watch has never been so interesting.
How much of the downtown vacancy rate is a result of the city allowing office space in the industrial park lands it has sold off, where great tenants, including but not limited to, provincial and federal government departments have moved?
Regarding downtown office space. Everyone seems to think that the owners of Class B and C office space will just sit on their assets and do nothing. Expect to see the conversion of old office space into residential or hotel units (if the floor plate is conducive). Buildings with a large amount of functional obsolescence will be torn down and the site’s redeveloped, most likely into residential over retail. What about the impending demolition of the the Ralston Building, is that included in their projections? The vacancy rate has a denominator and a numerator. Any projection needs to look at both.
Ironically there is still demand for new best in class office space in good locations. Queens Marque will fill up and will force GWL to upgrade Purdy’s Wharf and other similar assets. And so it goes. the sky is not falling.
This x1000000. I often wonder if Turner Drake wants Council to run a command economy. Given the downtown zoning is multi-use, developers chose commercial or residential, they are not forced to do commercial. So do you want government protecting lazy landlords who have not reinvested in their properties by restricting supply of new buildings? There has to be a market function here. I expect half the empty office space to be converted to residential because of market pressure. I expect a number of landlords to sell and exit because they are not up for competition.
Apparently, according to the Metro story, they’re also saying that the residential market is nearly saturated, which will stifle conversion of heritage buildings into residential purposes. I don’t know where that comes from, and they don’t provide any sources to back it up. It seems to be simply an opinion. In reality, the absorption rate for new residential buildings is high and the city’s population is growing faster than in years past, so unless they have some data I’m not aware of and which they choose not to cite, I don’t see any signs that the residential market is “saturated.” Hypothetically it could get there, but I don’t see it yet.
Of course, Turner Drake’s basic point is inarguable: construction of new office buildings long ago passed into irrational exuberance territory. We’ll be rebalancing supply and demand for a long time.
But their data points and forecasts are always fully of tractor-trailer-sized holes like the above, and they draw alarmist conclusions, like when Mike Turner told the Herald last year that “there will not be any heritage buildings in the downtown core outside of Barrington Street in the next 10-15 years because it is not economical to keep them.” Well, maybe, but call me doubtful.
They’re also consistently hammering down on this “aging population means a reduced workforce” talking point, which leads me to wonder if they’re event consulting Statistics Canada’s readily available labour force data. The Halifax labour force has consistently grown, year-over year, almost every year for decades. Some months it falls back and some it pulls ahead, but the overall trend is modest growth, right up to the current year. Nothing indicates that’s about to change in the short term, if anything, the jump in immigration in recent years suggests it’s sustainable longer term.
I wish reporters would push back on some of these points.
Take out the Halifax Shipyard naval contract and what do the numbers look like ?
I imagine the shipyard contract has next-to-no effect on downtown office space.
As for population/labour-force growth, Irving’s job projections are 11,500. We can assume that’s the best-case scenario, as Irving would want to be as rosy as possible in their estimates. Given that the year-over-year labour-force growth hasn’t changed much in the past 20 years (slow but steadily up) we can probably assume the shipyard is having at best a modest effect.
As for population growth, by far the greatest factor in population growth is immigration. Natural increase (1,100 more births than deaths) and migrants from elsewhere in the province more or less tie up the 2 and 3 spots. So unless a lot of brand-new immigrants and babies are working at the shipyard, I think the shipyard has a pretty minor effect on overall population growth.
So take out the shipyard and I think the situation would look roughly the same.
The 2018 assessments for several downtown office buildings show a significant decline in assessment values, with values lower than in 2014.
The good news is found at the Nova Centre where the assessment has risen from $65,000,300 to $200,009,300 – with taxpayers paying most of the property tax increase from the convention centre.
Cecil Clarke is gay ….. an open secret…taxpayers are not interested.
Cecil Clarke goes to China…….a secret trip he and refuses to provide details.
He misread the memo about which secrets we wanted details about.
How is that cultural sensitivity training for HRM councillors coming along?
In the cbc article he appears to wearing a dashing fox hunting outfit. Go big or go home?
Tim. I unequivocally deny that port-a-potty was used as my campaign headquarters. That port-a-potty was on Bedford Row in front of my old workplace. I would never run a Dartmouth campaign from H/\LIF/\X. My HQ was the port-a-potty at Sullivan’s Pond.
Heh.
I’m going with the theory the two Port-a-Potties were in fact Tardii, linking your Bedford Row location directly to Austin Campaign HQ in D/\RTMOUTH.
Amiright??
Hahahahahahaha
Good one!
According to AllNovaScotia.com, the disruption at Volta was anti-fracking protestors at a presentation on fracking.