GNWT inks deal to redevelop hospital
Agreement with Ventura Stanton Inc. allows current facility to be leased out as commercial space, calls for renovations to 'soften' exterior
Shane Magee
Northern News Services
Friday, January 8, 2016
SOMBA K'E/YELLOWKNIFE
The territorial government has signed a contract with a developer to re-purpose the existing Stanton Territorial Hospital as rentable commercial space once the new hospital is built, contracts released this week show.
A rendering of what the entrance to the new Stanton Territorial Hospital will look like when complete in 2018. - photo courtesy of the Government of the Northwest Territories |
Should the GWNT opt to rent space in the building it will still own, it will pay a discounted rate because of a revenue sharing agreement.
What will happen to the building after the new hospital has been finished was subject of debate during the territorial election. At a public forum, then-cabinet minister David Ramsay suggested turning it into an addictions and mental health centre.
The GNWT signed a contract with Ventura Stanton Inc. in September, which will be the landlord for the building once it is no longer a hospital, according to Mike Burns, the assistant deputy minister for the Department of Public Works.
A search of the NWT corporate registries directory returned no results for a company with that name, however, that name was registered in Alberta in late August. It remains unclear who makes up the ownership structure of Ventura.
No decision has been made regarding whether the GNWT will exercise its right to sublease part of the building from Ventura, Burns said.
"We're looking at all of our options right now," he said.
On Monday, the GNWT posted the contract online. Its more than 2,000 pages set out the terms of the plan to design, build and maintain a new Stanton Territorial Hospital via public-private partnership with Boreal Health Partnership.
The GNWT also released an independent assessment of the bidding process that found the awarding of the $350-million construction project to Boreal was carried out fairly.
Included in a PDF of the contract with Boreal is a lease agreement with Ventura, although the company's name is blacked out.
Boreal, in its bid for the project, proposed using the old hospital in a commercial manner once the new facility is built.
The lease sets out that Ventura will assume the risks associated with occupancy, operational and capital maintenance, energy and other risks over the 30-year term of the contract for the old building.
Some of the revenues from the leasing of the space will be shared with the GNWT.
Speaking in the legislative assembly in October, Health and Social Services minister Glen Abernethy told MLAs if the GNWT opts to do so, the government will pay a discounted rental rate.
"So, there might be some future cost to leasing those buildings," he said.
The contract includes terms requiring Boreal and the Ventura to provide about $13 million for remediation of the existing 13,300-square metre structure, including removing any hazardous materials and renovations to make it ready for commercial occupancy.
Those renovations include a new roof, interior renovations, conversion of the heating plant from one meant for industrial use to one for commercial use, new ceilings with lights, sprinklers and the "softening" of the exterior appearance.
That so-called softening will mean "taking it from an institutional look to a warm and friendly commercial/residential type feel," part of the contract with Boreal states. It includes landscaping to make the building "more inviting for the customer/client."
The GNWT opted to go with a private developer that would carry those costs and recoup them over the 30-year contract so the government doesn't have to pay, Burns said.
As Yellowknifer previously reported, the contract stipulates what types of uses could happen at the existing facility after renovations are complete.
Those include: medical, dental and other health professional offices, general office or business offices, restaurants and food services, retail, gyms or sports facilities, education facilities, child care, art galleries and cultural facilities, accommodations for visiting medical workers, residential housing, long term care or assisted living, nursing home or hospice, hotel and dry cleaning (but only if no actual dry cleaning happens there). Liquor and tobacco sales, firearms sales, gambling and "adult entertainment" are prohibited.
A summary of the fixed-price contract with Boreal states the government retains financial risks associated with changes to the scope of the new hospital during construction and for construction delays caused by the GNWT. It also retains the risk for delays in the purchasing of materials and changes to the interest rate.
Boreal takes on risks for construction delays it causes, labour shortages, geotechnical issues, design errors or omissions, estimate errors, weather delays, construction deficiencies, inaccurate estimates of the building lifespan and facility maintenance costs.
Construction is expected to be complete by Oct. 31, 2018 with the transition to the new facility happening between November and the end of December that year. On top of the $350 million in capital construction costs, the GNWT will pay Boreal $18 million per year over the 30-year contract.
During construction of the new hospital and remediation of the old facility, the contract states Boreal should use "where reasonably available" local supplies, equipment and personnel for some or all elements of the work.
New renderings were also released this week indicating an area has been reserved for a future expansion near the emergency room entrance for an MRI machine, which is used to scan a person to create detailed images of organs and tissues.
