From Profitable and Boring to Profitable and Exciting – Let The ‘Message’ Be More Important Than The Messenger.

Exciting, Aggressive, Environmentally Considerate and Profitable: Wallace Avenue between Rankin Crescent and Ward Street. What could have been.

Design: Moving from profitable and boring to profitable and exciting.

• How does the ‘messenger’ matter?
• Why does the ‘messenger’ matter?
• When designing; if the facts are the same or if the analysis is based on the same evidence, then what makes one messenger more acceptable than another messenger?
• What are the possible effects of being the ‘other’ messenger on a site, on a project, on a process, on a piece of the city? … And by ‘other’ I mean me.

Here is a real example in the City of Toronto. A potential client group missed purchasing an excellent property because one of the partners did not take me seriously soon enough.

It was an old lumber yard for many years. I was asked by a financier and potential partner to investigate a design for this site in a way that would provide good options to make it appealing to a developer/builder.

Let’s start with the present. The solution that is there now.

Essentially:

1. A two storey commercial volume. No basement. Ground floor can be separated from the 2nd floor to create separate units, i.e. top and bottom. 10 Units horizontally laid out. Each approximately 6.34 m wide x 20.8 m deep.
2. two parking spots per unit. 20 in total for the complex.
3. Commercial garbage bin at the very rear of the site, one per unit.
4. Roof-top heating and cooling units. Roof level venting. Some rear wall mechanical as well.
5. A 6-meter wide driveway at the rear.

The units once completed are ‘free-hold’ commercial units rented by the owner or owner-occupied. The commercial designation requires more commercial property tax applied to it. The commercial designation requires no insulation and the construction would likely be privately financed because of this commercial designation. It was a speculative build requiring a relatively quick sale. A speculative project that understood the lack of raw B and C type commercial space in the region, i.e. downtown Toronto at the time. Construction methodology is an extremely simple concrete block and brick with open web steel joists support for 2nd floor and roof. The ground and 2nd floor are a concrete slab. A dead simple warehouse construction method.

Also, no environmental assessment was required at the time. FYI, I believe this requirement came into play around 2006. However, I believe a site plan and C of A review by the city was a necessity.

Therefore this methodology relies on a relatively simple financial and construction template to calculate return on investment (ROI).

So it is important to understand if you are coming to a designer like me you must know that there is no point in me designing like 98% of other designers. In fact, you don’t have to be a good designer, architect or planner to build like this. You just make sure the zoning is permitted (as per by-laws) and give it to any high school drafting graduate. The developer will give them the required space requirements and the contractor’s quantity surveyor will give them the costs. The realtor will estimate the expected selling or rental price based on comparables and market trends. Financiers and or mortgage brokers will determine the source of project funding and capital funding based on their relationship with the development principals and their available assets and experience. They may even get financing based on the project value if it is a hard money lender.

Going forward, this may sound a little arrogant but ask yourself; is it? Is it really?

‘Arrogance’ is a design that does not simultaneously include four requirements:

1. the necessity of reasonable profit,
2. what is good for the community and future community in the making of it and after its completion,
3. that it is of benefit to the environment, and finally,
4. It is designed to be beautiful, an essential component in our daily life and in our daily spaces.

I offered my solution. It must be noted that the person asking me to design for this site knew very well why they were asking me. This financier had seen a lot of mediocre and ordinary design. In fact, he had investments in a lot of it. This time he came to me with the full knowledge that I was NOT about to do the ordinary or mediocre. He had plenty of other people who would be happy to accommodate the ordinary.

My scheme consisted of:

1. 3 major volumes: The 1st volume fronting the street containing 2 stories of commercial use. On the 3rd floor is the option for residential two bedroom units or it can also be commercially. Another option is that the 2nd-floor commercial can be converted to residential if required. Or the top two floors can be one residential unit while the ground floor is commercial use. Or the whole unit (all three floors) can be commercial or residential use.
2. Still on the 1st volume; the roof will be used for minor mechanical equipment, green-roof for water capture and roof cooling. Solar panels to offset electrical use by the businesses and or residential tenants. … And shade for the roof terraces.
3. Two parking spaces for the front volume; optionally – one parking space and the other parking space converted to a storage volume.
4. Still, on the 1st volume, each footprint would be approximately 5.3 m wide x 16.5 m deep x 3.7 m floor to floor.
5. The 2nd volume: 10 vertical units row house configuration with a footprint of approximately 5.3 m x 5.3 m – 2 bedroom house on 3 levels.
6. Still, on the 2nd volume, each unit will have a roof windmill and solar panels for electrical generation.
7. Two (2) parking spaces for each unit. Optional storage space in one of the parking spaces. The parking spaces are at grade and the building is over the parking.
8. There are no basements. Rather there are in-ground cisterns. Grey water and stormwater with the potential to recycle that water for grey water use. Further, the recycling of water to potable-water safety standards is entirely possible, it is not currently permitted by the Ontario Building Code. This will happen in the future. It must.
9. The metal walkways and decking are attached to the 1st and 2nd volumes would be designed to handle moderate hoists in their undercarriage to aid in cistern maintenance and repair when necessary as well other functions.
10. A 3rd volume is a form whose position on the site serves as a ‘crash shield’. A crash shield is not a popular discussion item, however, it is the reason that we presently have a policy in Ontario that residential housing must not be within 33 m from the centre line of the railway tracks or the track edges are protected by a natural or artificial berm. This building serves as an artificial berm.
11. Within its mass, there will be garbage rooms, recycling rooms, battery rooms, storage and other uses that contribute to the overall functionality of the complex.
12. … and just to be clear, a potential total of 38 to 40 car parking spaces for the complex if that is what the tenants wanted. What is more likely to happen is some of those spaces will be converted to bicycle parking, Auto-share type and bike parking.

There are many other things I can say about this project, however, I’ll cut to the chase. From a financial perspective, this concept/solution is not a simple ‘build and sell’. This proposal is a condominium ownership structure or a rental model with a large commercial component. The commercial component is intended to compliment either ownership format.

Other options. One does not have to build all at once. It can be phased; meaning built in phases when appropriate, i.e. as the neighbourhood evolves, increased financing is available as the value increases it then becomes possible for the ownership model to ‘flip to itself’ in order to further afford to build the other phases of the project. This refinance tool is for the benefit those owners and inhabitants while at the same time increasing the asset’s overall energy performance value and market asset value; also known as ‘forced appreciation’ in financial and real estate terms.

Apples to apple comparison;

Ordinary Solution:

I don’t remember the land cost at the time (+/- 2005) but for illustration purposes let’s say the land cost 2.4 million dollars. The ordinary solution would have:

• Maximum of units 20. Therefore, 2.4 million divided by 20 units equals $120,000 per door commercially or residentially.

vs. My solution:

• Maximum 40 units residentially: 2.4 million dollars divided by 40 units equals $60,000 per door.

• Mixed 30 units commercial and residential: 2.4 million divided 30 units equals $80,000 per door.

Therefore, from per door criteria, my solution has the most room for options and profit assuming the building goes forward.

The intrinsic value over time between the ordinary solution versus my solution can be quantified but that is for another day due to the fact that it would need comparable projects … And there aren’t any. It can be done but it will take more space and time than I have here. This happens with most of my projects.

A funny aside: When I was wrangling development money to build 157 Coxwell Ave., the Bank of Commerce residential appraiser called me. At first when I picked up my phone the man on the other end of the phone said, “WHAT ARE YOU TRYING TO DO TO ME?“. And my response was “Who is this?” At that point, he told me who he was, what his position was and why he was calling.

There are more stories on more projects but now back to this Wallace project.

So what happened when I got this to the financier who then forwarded it to the potential development partner? One word … Shock! They were not expecting this solution. Long story short, they took too long to analyze/determine that my design was ACTUALLY viable. It made good sense. Note they were financial experts. They ‘danced’ with numbers for generations. It was easy for them.

Sadly the investment group submitted their offer late and lost the property.

I felt terrible for them for so many reasons.

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My name is Rohan. My design company is Spaces By Rohan Inc.

I produce value ladened, beautiful and practical solutions with those clients who regard the message as the priority.

Cheers.