What began as a project to streamline office space for Edmonton’s municipal workers has ended up as an ambitious attempt to contribute to revitalizing the city’s downtown core – and shown just how much a bold and imaginative procurement process can accomplish.
The Edmonton project has become a shining example of how enlightened public sector procurement can be used to achieve much wider economic and social policy goals, such as urban renewal and job creation.
“We had a city council that was pushing us to think outside of the box to drive something that’s transformational,” says Dan Lajeunesse, the city’s manager for corporate procurement and supply services. “It went far beyond just getting the best bang for the buck. It was very much a strategic, city-building outcome.”
About 3,000 City of Edmonton employees currently work downtown, some in two buildings owned by the city and the rest in space leased from private landlords in seven separate buildings.
City planners realized a few years ago that the time was ripe for a fresh approach.
For one thing, the downtown area had seen only one new office tower built since the 1990s. Furthermore, one of the city-owned municipal buildings needed costly repairs, and leases in many of the privately owned buildings were due to expire in 2016. Plans for a new downtown arena that would be the home of the Edmonton Oilers, the city’s NHL hockey team, triggered plans for urban renewal in the city’s core.
The city issued an open request for proposals in late 2013. It received 13 responses, and following an extremely rigorous evaluation process, negotiated a deal based not only on the cost of new office accommodation, but also the potential for further downtown development and broader economic stimulus.
The eventual winner, Edmonton Arena Corporation, owned by the Katz Group and WAM Developments, committed to building a new office tower with the city as the anchor tenant. Its plans also included significant additional development in the downtown. The Katz Group, who own the Oilers, is also the city’s partner in the new downtown arena.
The city estimates that the arrangement will save $30-million in rental costs and has helped stimulate $500- million in related downtown commercial development.
In a tribute to the robustness of the process, none of the unsuccessful bidders has challenged the city’s decision. Mr Lajeunesse notes: “We were able to achieve the highest possible openness of competition and transparency. Typically, this kind of deal would have happened in the backrooms somewhere. We leveraged innovative tools to deliver a pretty spectacular outcome using an open competitive process.”
The city’s supply chain experts played a key role. “A lot of it stems from being able to demonstrate value to our clients,” Mr Lajeunesse says. “You need a procurement function that is operating in a very strategic way, that has a seat at the table, and that has some unfettered influence over the process.”
In another tribute to its success, the Edmonton project won the Supply Chain Management Association (SCMA) 2015 award for excellence in supply chain management.
The new arena is due for completion in September 2016, in time for the Oilers’ first game of the 2016-17 season. Two months later, assuming all goes to plan, hundreds of municipal workers will move into their new 27-storey office tower right across from the arena. A new era in the development of Alberta’s capital city will have begun.
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