The "stump," a tragic landmark of the early 1990s recession, is about to disappear from downtown Toronto.
Brookfield Properties Corp. today will take the wraps off its proposal for a new office tower to be built on the mothballed site, with KPMG LLP as the anchor tenant. Under the new plans, the six-storey, ugly reminder of the past devastation of the real estate industry will be demolished.
The accounting firm has three offices in Toronto, including its headquarters at Commerce Court West.
Work on the proposed Bay-Adelaide Centre halted in 1993, leaving a grey, concrete elevator core on top of a parking garage that has affectionately been known as "the stump" ever since.
The project is the latest of three skyscrapers slated for the city's core after a hiatus of some 15 years following the collapse of the Toronto office market in the early 1990s.
Tom Farley, president of Brookfield's Canadian operations indicated in April that revised plans call for a 1.1-million-square-foot office tower with an adjacent hotel and condominium development. There are also long-term plans for a second office tower on the site.
In May, Toronto city council gave the nod to a 50-storey office tower to replace two low-rise buildings on the Bay-Adelaide site. A public square has been designated for the part occupied by the "stump."
The project is expected be completed by 2009 - the same year as two other major office towers that have already been announced for downtown Toronto.
Raymond Wong, national research director for real estate company CB Richard Ellis Ltd., said the three new projects will add 3.1-million square feet of premium office space, but there won't be a glut.
The three projects will push the vacancy rate up to 10.6 per cent from 3.9-per-cent rate projected for 2008, and the current 6.8-per-cent rate, Mr. Wong said yesterday in an interview.
"It's a far cry from 1993 when [vacancy]was at 18.6 per cent, so this 10.6 per cent is almost a balanced market," Mr. Wong added. "There are no major dangers to the office market."
Last week, privately held Toronto-based Menkes Developments Inc. announced the building of a $250-million, 30-storey tower beside the Air Canada Centre.
Vancouver-based telecommunications company Telus Corp. is the lead tenant, and is taking up 60 per cent of the 780,000-square-foot tower.
Last December, Toronto-based Cadillac Fairview Corp. signed Royal Bank of Canada to be lead tenant in its new 43-storey, 1.2-million-square-foot tower to be built at Simcoe and Wellington Streets, beside the new Ritz-Carlton Hotel. The tower will be known as the RBC Centre.
New York-based Brookfield, the real estate arm of Toronto-based Brookfield Management Inc., began to revive the Bay-Adelaide project last fall after buying the 50-per-cent stake it did not already own from Canadian National Railway Co.'s pension fund.
First approved by Toronto city council in 1989, the Bay-Adelaide site was slated for a 57-storey office tower. A plan to restart the project in 1999 stalled after an anchor tenant could not be found.
The last major office tower built in downtown Toronto was the Maritime Life Tower developed by O&Y Properties Corp. at the corner of Queen and Yonge Streets in 2003.