The Public Private Partnership

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The Public Private Partnership
Experience Sharing Seminar on PPP Duty Visit to
Canada 19 - 28 June 2006
Toronto Ottawa
Better Building Partnership
ByWard Market
By Uson CHUNG, Senior Project Manager
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The Public Private Partnership
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Better Building Partnership
Toronto Better Building Partnership (BBP)
Programme
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Better Building Partnership
Background

• January 1990, City of Toronto committed to reduce
  city's net carbon dioxide (CO2) emissions by 20
  per cent, relative to 1988 levels by the year
  2005.
• In 1996, launched BBP Programme
• In 1999, the newly amalgamated City of Toronto
  reaffirmed goal and launch full scale programme
• City of Toronto steers and takes a lead role

HOW?
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Torontos Energy Consumption
Better Building Partnership
Street Lighting
Residential
0.1
Multi-Residential
18.2
2.2
Industrial
13.6
Transportation
Institutional
36.1
8.1
Commercial
21.7
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Building Renewal and Energy Efficiency
Better Building Partnership
People
Systems
(energized)
Structure
(passive)
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Better Building Partnership
How to deal with so many buildings? So many
people?
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Better Building Partnership
Public-Private Sector Partnership

• Oversee the program
• Provide independent, un-biased technical advice
  to the building owners
• Pre-qualify and screen EMFs
• Provide loans to building owners through the Loan
  Recourse Fund (LRF)

• The EMF (Energy Management Firms, a team of
  experts in their field) - provide "turn-key"
  solutions from feasibility study to construction
  and commissioning.
• Toronto Hydro and Enbridge Gas Distribution Inc.
  - provide training and educational programs and
  technical advice on new and emerging
  technologies.

• Join BBP programme
• Agree financing and re-payment arrangement with
  EMF
• Attend training programs

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What is the Better Buildings Partnership ?
Better Building Partnership

• An innovative public-private sector partnership
  program that promotes and implements
  energy-efficient retrofits of commercial,
  institutional and multi-residential buildings.
• Environmental initiative that addresses and
  supports CO2 emission reduction (Kyoto protocol,
  20 Goal)
• Major job creation and economic development
  initiative

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BBP Sponsors and Partners
Better Building Partnership

• City of Toronto
• Toronto Atmospheric Fund
• Enbridge Gas Distribution
• Toronto Hydro Corporation
• 36 Implementing Partners
• Property managers for over 440 buildings

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Program Features
Better Building Partnership

• Workplace Health Safety
• Project costs normally recovered from energy
  savings
• Off-balance sheet financing
• Innovative financing, credit enhancement by City
  and the Toronto Atmospheric Fund (TAF), and loan
  leveraging for private buildings
• Better Buildings Loan Repayment Reserve Fund
• Loans to public/non-profit sector fully secured,
  partially secured or unsecured depending on needs
  of each project

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BBP Programs
Better Building Partnership

• The Residential Energy Awareness ProgramThe
  Residential Energy Awareness Program is a program
  designed to increase the public's knowledge of
  energy efficiency and conservation in the
  residential sector. By increasing awareness
  around lifestyle changes that would reduce
  household energy use, we protect the environment
  and save money.
• The Large Office Building ProgramThe Large
  Office Building Program has been a very
  successful component of the BBP and has already
  achieved great energy/water cost savings.
  Expansion of this program across the entire city
  will enable many more building owners to
  participate in the program.
• The Small/Medium Commercial Buildings ProgramThe
  Small/Medium Commercial Buildings Program
  provides tools that assist participants of this
  sector to realize energy and expanding cost
  savings. This program is designed to increase
  awareness of the benefits of energy efficiency
  and to provide financial solutions for these
  projects.
• The Multi-Residential Non-Profit Buildings
  ProgramThe Multi-Residential Non-Profit
  Buildings Program was oversubscribed in the pilot
  phase of the BBP as there was a tremendous market
  response. Potential benefits for building owners
  in this sector include decreased operating costs,
  reduced maintenance costs and an increase in
  property value.
• The In-House Energy Efficiency ProgramThe
  In-House Energy Efficiency Program retrofits
  municipally-owned buildings. Energy/water
  efficiency continues to an opportunity for cost
  reduction and environmental protection through
  CO2 reduction.
• The BBP Loan Recourse FundThe BBP Loan Recourse
  Fund provides loans through the Enbridge Gas
  Distribution Inc. to building owners for energy
  efficiency retrofit projects by securitizing
  loans. This is an innovative program designed for
  the small/medium ICI and multi-residential
  sectors.

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Why BBP?
Better Building Partnership

• Enhance and preserve asset value of buildings
• Reduce operating costs
• Improve position for purchasing power
• Improve occupant comfort and productivity
• Enhance tenant satisfaction and retention
• Demonstrate environmental stewardship
• Energy Efficiency can be strategically integrated
  into the overall property management plan

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Business Case Self-Funded Solution
Better Building Partnership

• No risk to owners
• Guaranteed savings and paybacks
• Cash flow neutral with available financing
• Guaranteed savings
• Capital upgrades energy and operational
  advantages
• Planned replacement of equipment
• Control of energy costs in a volatile market
• Turnkey solutions
• eliminate additional workload for staff

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The Energy Retrofit Process
Better Building Partnership

• BBP assesses the building
• Building Owner issues Request for Proposals (RFP)
• Energy Management Firms (EMF) conduct
  walk-through audit and submit proposal
• Building owner signs Letter of Intent to selected
  EMF
• EMF completes a detailed feasibility study
• If the feasibility study supports original energy
  savings project proceeds or pay
• If the engineering study is negative project
  folds and the building owner is not billed for
  the work performed by the EMF

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The Energy Retrofit Process (contd)
Better Building Partnership

• Building owner and EMF finalize measures
• Building owner signs Contract
• EMF completes detailed engineering design
• EMF, in consultation with building owner, selects
  the equipment and contractors
• EMF manages implementation of measures
• EMF and building owner verify energy savings

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Project Goals
Better Building Partnership

• Offers new, reliable, and efficient equipment
• Reduces need for
• expensive repairs
• replacement of equipment
• mechanical service contracts
• Greater building comfort for building occupants
• Greater savings, especially as utility costs rise
  
• Better basis for electricity purchase
• Improves the environment - CO2 reductions
• Building owner shows leadership by managing and
  reducing overall building operating costs

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Typical Measures
Better Building Partnership
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Results to Date
Better Building Partnership

• No. of buildings 443
• Floor Area Retrofitted 39 million ft2
• Job Creation 3,800 person years
• Operating Cost Reduction 19 M per year
• Economic Impact 131 M
• CO2 Emission Reduction 173,600 tonnes/yr
• Cumulative CO2 Emission 876,118 tonnes
• Reduction (2004)

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YMCA of Greater Toronto
Better Building Partnership

• 2M project - 3 bldgs.
• 172,000 in annual savings
• 11.9-year simple payback
• Boilers, lighting, building automation, glazing,
  HVAC
• CO2 reduction - 5,755 tonnes per year

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Toronto Community Housing Company
Better Building Partnership

• 1.2M project - 13 bldgs.
• 176,000 in annual savings
• 7-year simple payback
• Lighting, DHW, boilers
• CO2 reduction - 2,013 tonnes per year

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City of Toronto Buildings
Better Building Partnership

• 4M project-7 bldgs.
• 570,000 in annual savings
• 7-year simple payback
• Boilers, chillers, lighting, asbestos removal
• CO2 reduction - 6,600 tonnes per year

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Toronto Public Library
Better Building Partnership

• 3.2M project - 85 bldgs.
• 282,000 in annual savings
• 11.4-year simple payback
• Lighting, lamp and PCB ballast recycling,
  building automation, fuel conversion
• CO2 reduction - 4,200 tonnes per year

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Neill-Wycik Student Cooperative
Better Building Partnership

• 1.65M project
• 112,000 in annual savings
• 14.6-year simple payback
• HVAC, boilers, air sealing, water conservation,
  washroom renovations, telephone system
• CO2 reduction - 571 tonnes per year

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Supportive Housing Coalition
Better Building Partnership

• 225,000 project
• 23,000 in annual savings
• 9.9-year simple payback
• Boilers (fuel conversion), lighting, controls
• CO2 reduction - 355 tonnes per year

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Nisbet Lodge Home for the Aged
Better Building Partnership

• 345,000 project
• 44,000 in annual savings
• 7.8-year simple payback
• Boilers,lighting, air sealing
• CO2 reduction - 426 tonnes per year

LOAN PAID OFF!
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Metropolitan United Church
Better Building Partnership

• 250,000 project
• 20,000 in annual savings
• 12.9-year simple payback
• Heating upgrades, lighting, insulation
• CO2 reduction - 242 tonnes per year

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Better Building Partnership
York Condominium Corp. 386100 Prudential Drive

• 337,000 project
• 50,000 in annual savings
• 7 year simple payback
• condensing boilers for heating and domestic hot
  water, air sealing, building automation, corridor
  ventilation upgrades
• CO2 reduction - 474 tonnes per year

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Better Building Partnership
York Condominium Corp. 380301 Prudential Drive

• 313,000 project
• 46,000 in annual savings
• 6.8-year simple payback
• New condensing boilers for heating domestic hot
  water, air sealing, building automation
• CO2 reduction - 434 tonnes per year

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Better Building Partnership
Toronto Dominion Centre

• 33M project - 4 bldgs
• 5M in annual savings
• 6.6-year simple payback
• Elevators, life safety systems, lighting,
  building automation, HVAC
• CO2 reduction - 35,000 tonnes per year

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Better Building Partnership
First Place Tower(First Canadian Place)

• 17M project
• 1.4M in annual savings
• 12.2-year simple payback
• Lighting, HVAC, building renewal, fire safety,
  elevators
• CO2 reduction - 27,000 tonnes per year

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Better Building Partnership
BBP Financing

• Loan Repayment Reserve Fund
• Loan Leveraging
• Securitization
• Blended Loans (TAF BBP)
• Private Financing
• Incentive Programs

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Better Building Partnership
Financing Examples
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Better Building Partnership
Financing Examples (contd)
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Dr. David Suzuki
Better Building Partnership
(A world-renowned geneticist, academic and
broadcaster, Dr. David Suzuki has spent the past
40 years educating the public about environmental
issues)

• The BBP demonstrates the art of the possible
  The positive and practical link between the
  economy and the environment.
• Its a cause to celebrate, a situation where
  everybody wins.

(BBP Launch May 4, 1999 - Design Exchange
Toronto)
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Ottawa By Ward Market
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History
Early picture of Ottawa River
Colonel By building the Rideau Canal. 
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History

• For over 150 years, the City of Ottawa has
  operated the historic ByWard Market.
• The Market was the central place for farmers to
  sell their produce, but also to sell cattle and
  livestock. Butchers would set up shop and
  slaughter animals right in front of you.
  Livestock selling continued until the early
  1980s.

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History

• The original market building was constructed in
  1848 and the current one was built in 1926.
• It was renovated in 1975 and re-opened in 1976.
• In 1985, the building became a domain for Art and
  Craft producers.
• In the early 90s, the City of Ottawa planned to
  further develop the area.

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The Plan

• In 1993, the City Council approved the ByWard
  Market Strategic Plan for the reintroduction of
  specialty food retail in the Market building as
  one of the main objective.
• A design and financial feasibility study
  determined that a renovation of the building was
  possible and estimated at 3.6 million.
• As the capital funds were not available, Council,
  in March of 1996, approved a Request for Proposal
  for the operation and alteration of the building.
  

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The Plan
September of 1996 The ByWard Market Building
Revitalization Group (BWMRG) was chosen as the
preferred proponent.
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The Partnership

• In November 1997, a joint venture (JV) between
  the City of Ottawa and the BWMRG was put into
  place under the terms of a 20 years lease.
• The JV is to ensure that a strong, viable and
  attractive food retail component continue to
  serve as a commercial anchor in this dynamic and
  changing community.

City of OttawaMarkets Management
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Eight Key Functions of JV

• area/property management
• contract/lease management
• standholder/tenant relations
• tourism, public relations and representation
• promotion and marketing
• policy development and planning
• project management
• financial and general administration.

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Events
Beginning in November 1997, the building
underwent a major transformation and rejuvenation
whereby it was expanded, renovated and upgraded
in order to house a broad range of specialty food
retailers, along with artisans who had for years
called the building home.
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Events

• BWBRG invested over 2 million in the renovation
• Tenants spent an additional 2 million in
  fit-ups.
• Building officially re-opened on June 18, 1998.

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Results

• increased ground floor square footage three fold,
  from under 6000 to over 18,000 square feet

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Results

• more than 18 tenants in the building

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Results

• all exterior agri-food, arts and craft, and
  refreshment stand holders, who had occupied
  stands around the old building, were accommodated
  through a comprehensive relocation plan

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Results

• in 2005, the City received 105,500 in base rent,
  in accordance with the rent sharing formula

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Results

• the City received almost 100,000 in property
  taxes annually

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Results

• the Citys operating savings are estimated at
  100,000 per year

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Results

• the Building is fully leased

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ByWard Market
Unlike most municipal services which are
tax-funded, the Markets program operates on
a cost-recoverable basis with stand fees and
lease revenue covering all direct operating and
capital costs, which amounts to over 1 million
annually.
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The Public Private Partnership
Experience Sharing Seminar on PPP Duty Visit to
Canada 19 - 28 June 2006
Toronto Ottawa
Better Building Partnership
ByWard Market
By Uson CHUNG, Senior Project Manager