What seems to be the holdup on Blatchford?

Risk is keeping big players out, Tim Cartmell writes.

In 2014 city council decided to take the old municipal airport lands and turn them into Blatchford, to become “one of the world’s largest sustainable communities.”

It would be a 536-acre project, roughly the same size as our current downtown. Thirty thousand Edmontonians would live in a community of green buildings powered by renewable energy and heated and cooled by a carbon-neutral, city-owned district geothermal utility.

I love to build things. The chance to build a leading-edge community is especially exciting. But my past experience putting up buildings and managing projects has taught me that we must work very hard to get things right, especially when undertaking new and unique projects.

That is why I have become concerned about the progress of Blatchford. Many Edmontonians have noted that the development of this prime piece of real estate seems to be moving very slowly. Major private-sector developers don’t seem keen on the opportunity Blatchford presents. No one seems to be afraid of missing out.

I asked a few of those players why they weren’t in Blatchford. Their answer was that while the location might be interesting, and the land available was intriguing, Blatchford is risky. Risky projects are harder to stomach in uncertain times.

The key risk they spoke about was the geothermal utility. No one was sure how it would work. Do I get less energy if I am farther away from the energy source? Does the energy supply go down when more buildings get built? How do I design the equipment inside my building if I don’t know what energy will be supplied to that equipment in the long term?

But when I spoke with independent geothermal experts, they reminded me that district geothermal works, and might be particularly well-suited in Edmonton — the science and the engineering are proven.

Major private-sector developers don’t seem keen on the opportunity Blatchford presents. No one seems to be afraid of missing out.

But some of those same experts feel that the city administration’s energy-consumption model overestimates the energy demands, resulting in expensive infrastructure investments sooner than is needed. They note that to work, any district heating system requires a variety of building types and sizes — town homes and smaller apartments that demand more heat, and towers and commercial spaces that demand more cooling, even in winter.

Those same experts raised concerns about the projected costs. The current financial plan calls for the city to backstop $510 million of borrowing to build the regional geothermal system, to be repaid by utility customers. In addition, a $90-million direct investment will be required, either from taxpayer funds or from the provincial or federal governments.

So we have larger builders that are not confident that the utility can supply the energy they require and concerned about the monthly bills. And we have an expert community that thinks the utility is built to supply too much energy, too soon, that the overbuild will drive up costs, scare away prospective homeowners, require more taxpayer investment than should be needed and ultimately threaten the development of Blatchford.

So, are the technical experts that I have spoken with correct? Is the city overbuilding and driving up cost? Does the city plan to expand this utility beyond Blatchford?

Or has the city got it right, and we need to communicate and build confidence with our builders and their engineers?

I don’t know which of those is correct. But I can tell you that I think the time has come for city council to get a better grip on these issues and to do a better job of answering developers’ questions.

This should be the most in-demand land in the city. The fact that we have 536 acres in the centre of our city and there isn’t a rush to develop them suggests that things aren’t going as well as they could.