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The Public Private Partnership

The Public Private Partnership

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The Public Private Partnership

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  1. The PublicPrivate 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

  2. Recurrent Expenditure Capital Expenditure Revenue Core Operation Non-core Operation Facility Management Facility Maintenance The PublicPrivate Partnership

  3. Recurrent Expenditure Capital Expenditure Revenue Core Operation Non-core Operation Facility Management Facility Maintenance Better Building Partnership Toronto Better Building Partnership (BBP) Programme

  4. 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?

  5. Better Building Partnership Toronto’s Energy Consumption Street Lighting Residential 0.1% Multi-Residential 18.2% 2.2% Industrial 13.6% Transportation Institutional 36.1% 8.1% Commercial 21.7%

  6. Better Building + Better Education Higher Energy Efficiency Better Building Partnership Building Renewal and Energy Efficiency People Systems (energized) Structure (passive)

  7. Better Building Partnership How to deal with so many buildings? So many people?

  8. Owners & Tenants Consultants 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

  9. 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 Better Building Partnership What is the Better Buildings Partnership ?

  10. Better Building Partnership BBP Sponsors and Partners • City of Toronto • Toronto Atmospheric Fund • Enbridge Gas Distribution • Toronto Hydro Corporation • 36 Implementing Partners • Property managers for over 440 buildings

  11. 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 Better Building Partnership Program Features

  12. 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. Better Building Partnership BBP Programs

  13. 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 Better Building Partnership Why BBP?

  14. 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 Better Building Partnership Business Case: Self-Funded Solution

  15. 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 Better Building Partnership The Energy Retrofit Process

  16. 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 Better Building Partnership The Energy Retrofit Process (cont’d)

  17. 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 Better Building Partnership Project Goals

  18. Bldg. Automation Lighting HVAC Chillers Boilers Envelope Better Building Partnership Typical Measures

  19. 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) Better Building Partnership Results to Date

  20. Better Building Partnership YMCA of Greater Toronto • $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

  21. Better Building Partnership Toronto Community Housing Company • $1.2M project - 13 bldgs. • $176,000 in annual savings • 7-year simple payback • Lighting, DHW, boilers • CO2 reduction ‑ 2,013 tonnes per year

  22. Better Building Partnership City of Toronto Buildings • $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

  23. Better Building Partnership Toronto Public Library • $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

  24. Better Building Partnership Neill-Wycik Student Cooperative • $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

  25. Better Building Partnership Supportive Housing Coalition • $225,000 project • $23,000 in annual savings • 9.9-year simple payback • Boilers (fuel conversion), lighting, controls • CO2 reduction - 355 tonnes per year

  26. Better Building Partnership Nisbet Lodge Home for the Aged • $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!

  27. Better Building Partnership Metropolitan United Church • $250,000 project • $20,000 in annual savings • 12.9-year simple payback • Heating upgrades, lighting, insulation • CO2 reduction ‑ 242 tonnes per year

  28. 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

  29. 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

  30. 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

  31. 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

  32. Better Building Partnership BBP Financing • Loan Repayment Reserve Fund • Loan Leveraging • Securitization • Blended Loans (TAF – BBP) • Private Financing • IncentivePrograms

  33. Better Building Partnership Financing Examples

  34. Better Building Partnership Financing Examples (cont’d)

  35. Better Building Partnership Dr. David Suzuki: (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. It’s a cause to celebrate, a situation where everybody wins.” (BBP Launch May 4, 1999 ‑ Design Exchange Toronto)

  36. / Marche By Recurrent Expenditure Capital Expenditure Revenue Core Operation Non-core Operation Facility Management Facility Maintenance Ottawa By Ward Market

  37. / Marche By History Early picture of Ottawa River Colonel By building the Rideau Canal. 

  38. / Marche By 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.

  39. / Marche By 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 90’s, the City of Ottawa planned to further develop the area.

  40. / Marche By 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.

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

  42. / Marche By BWMRG The Partnership • In November 1997, a joint venture (JV) between the City of Ottawa and the BWMRGwas 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

  43. / Marche By 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.

  44. / Marche By 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.

  45. / Marche By Events • BWBRG invested over $2 million in the renovation • Tenants spent an additional $2 million in fit-up’s. • Building officially re-opened on June 18, 1998.

  46. / Marche By Results • increased ground floor square footage three fold, from under 6000 to over 18,000 square feet

  47. / Marche By Results • more than 18 tenants in the building

  48. / Marche By 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

  49. / Marche By Results • in 2005, the City received $105,500 in base rent, in accordance with the rent sharing formula

  50. / Marche By Results • the City received almost $100,000 in property taxes annually