Home Newsroom 2006 News releases Backgrounder: 3000 Merivale Road : Best value for money

3000 Merivale Road : Best value for money

The Royal Canadian Mounted Police (RCMP) has been managing accommodation pressures for many years. These pressures are due in large part to an inevitable growth, as well as an evolving operating environment that requires much more flexibility and expandable space. Currently, the RCMP’s national headquarters operates out of numerous buildings throughout the National Capital Region, affecting its operating efficiency.

The campus at 3000 Merivale Road allows the RCMP to co-locate its operations to enable greater synergies and effectiveness. This modern facility also provides the RCMP with ample opportunity to expand and transform space to accommodate its future growth, ultimately supporting safe homes and safe communities for Canadians.

To facilitate the requirements of the RCMP, on July 14, 2006, the Government of Canada issued an Advance Contract Award Notice (ACAN) on the government electronic tendering service, known as MERX, to invite potential suppliers of office accommodation to submit a statement of their capability to provide future accommodations for the RCMP headquarters. This process was initiated to confirm that the unique opportunity offered at 3000 Merivale Road provides the best value for money. As a result of this open, transparent market test, the government can now confirm that the lease-purchase of 3000 Merivale Road, as proposed by Minto Developments Inc., is a deal that nobody else can match.

This is an excellent transaction for the government and Canadian taxpayers. The lease-purchase net rental rate of $78.46 per square metre or $7.29 per square foot* is significantly below estimated market net rental rates of $172 per square metre ($16.00 per square foot). Net rent is fixed for the 25-year term and includes ownership of the property for $1 at the end of term.

This recently built property offers 84,600 square metres (910,000 square feet or the equivalent of 10 football fields) of rentable area to be used by the RCMP for general office, secure administration and special purpose space, accommodating over 3,800 employees.

Before issuing the ACAN, the Government completed a comprehensive analysis of different options over a 25-year period, and found that other options proved to be more costly by at least $70 million. The other options ranged from partial renovation of the existing buildings, demolition and development of new buildings on the current site, to complete replacement with a new building on an undeveloped site, which would have exceeded the costs of this deal by more than $200 million.

The ACAN included provisions to ensure that there would be no contingency fees or commissions paid to negotiate a contract. All lease contracts also have provisions to prevent contingency fees being paid.

This decision represents the least cost solution for the Crown and meets the RCMP’s long-term accommodation needs, while ensuring minimal operational disruption during the move to consolidate their operations.

* Note: Base rent to be adjusted in accordance with the bid yield rate of the June 2033 Government of Canada Bond as of one month prior to the commencement date of the lease term and the construction price index.