'Long overdue:' City hopes to save $30M a year by closing some office locations
Chris Fox, CP24.com
Published Wednesday, September 18, 2019 10:03AM EDT
Last Updated Wednesday, September 18, 2019 1:12PM EDT
The city plans to reduce the number of offices it operates by more than 60 per cent over the next five years, savings tens of millions of dollars in the process.
Mayor John Tory made the announcement at city hall on Wednesday morning, calling it a “long time coming.”
He said that the initiative, dubbed Modern T.O, will focus on optimizing and modernizing many of the locations where the 15,000 members of Toronto’s civil service work while at the same time shuttering others that are deemed surplus.
As part of the plan, Tory said that the city will pursue a “significant revitalization” of Metro Hall and the Etobicoke and Scarborough civic centres so that hundreds of additional jobs can be placed at those locations.
Meanwhile, he said that the leases on dozens of other office properties operated by the city will be allowed to expire.
Once fully implemented the plan will result in the city reducing the number of properties it operates from 52 to 20, saving an estimated $30 million a year.
Eight city-owned properties will also be unlocked for as yet undetermined potential city-building initiatives, such as the development of affordable housing.
Those properties include the TCHC’s headquarters at 1900 Yonge Street, the TCHC’s headquarters at 931 Yonge Street and the Toronto Parking Authority’s headquarters at 33 Queen Street East. Also on the list are the Toronto Coach Terminal at 610 Bay Street, which is currently leased to a number of inter-city bus providers, and the Toronto Public Health building at 277 Victoria Street that is currently home to a supervised injection facility.
A staff report pegs the combined value of all eight properties at $420 million.
“This is just one of those things that is a common sense business-like thing to do,” Tory said. “Just to put this into perspective, the $30 million a year (in savings) is equal to one point in property tax and I do think there are many things people would like us to do with that property tax money instead of real estate leases on outdated spaces.”
Tory said that the city could retain ownership of some of the eight surplus properties and lease them out for the development of affordable housing but he said that it is also possible that some of them will be sold.
In a statement, Board of Health Chair Joe Cressy said that staff will undertake a process to ensure that all services currently offered at the public healthy building on Victoria Street will “remain open and accessible in the immediate neighbourhood,” regardless of what becomes of the building itself.
"Just as we can be smarter and more efficient with our office space, so too can we leverage existing City-owned land for public benefit and city-building,” he said.
More shared workstations
Tory said that as part of the plan approximately 1,200 jobs will be relocated to the Scarborough Civic Centre and another 1,200 jobs will be relocated to the Etobicoke Civic Centre.
He said that once fully implemented, there will be a 25 per cent reduction in the square footage of office space the city operates but hopefully an uptick in the functionality of the remaining space.
The staff report says that the functionality of spaces will be improved, in part, by a switch over to more “shared workstations” following a study that found that its assigned workstations are vacant 36 per cent of the time.
“We will continue to deliver city services and this has nothing to do with that. If anything it will allow us to deliver city services better because we can start from scratch with real estate and offices that have been designed to offer services better,” Tory said.
Renovation costs pegged at $250M
The city will have to spend $250 million in modernizing city hall, Metro Hall and the Scarborough, Etobicoke and North York civic centres so that the buildings can work better and accommodate up to 5,800 additional employees, according to the staff report.
But it says that in doing so the average square foot of space occupied per city employee will go down from 200 square feet to 150 square feet and the annual cost of providing that space per employee will decline to $5,200 from $7,100.
“It is 2019 and quite frankly this kind of thing should have been done earlier than now in the interest of running an efficient city,” Tory said. “We have to stop spending money on outdated cubicles and outdated uses of space and frankly expensive leases that build in a profit for the landlords. I am not against people making a profit but if we own spaces of our own we should use that first before we rent space from somebody else.”
The staff report says that in order to begin work on implementing the plan, council will have to approve $4.4 million in funding in 2020. That number includes $3 million for additional site due diligence, $800,000 to establish a dedicated project team and $500,000 for consultations involving stakeholders.