will Esso go higher than EnCana?

Imperial may follow EnCana with new tower Calgary headquarters
Jon Harding, Financial Post
Published: Friday, October 13, 2006
CALGARY - In what could shape up as a battle between Canadian oil titans to dominate Calgary's skyline, EnCana Corp. unveiled plans yesterday for the country's second-largest office tower just as Imperial Oil Ltd. is considering building its own downtown Calgary monolith.
Encana, Canada's largest oil-and-gas company by market value, laid out a $1-billion project to build a new and much-needed headquarters on the east side of Calgary's downtown core.
Completed by 2010, it would be the tallest office tower in Western Canada at 59 storeys or 247 metres, and rival for size and height Toronto's First Canadian Place and Scotia Plaza, with 1.7 million square feet of leasable office space.
Imperial, meanwhile, is taking steps to solve its own growing need for space. Two weeks ago, Canada's second-largest oil-and-gas company issued a request for proposals to a number of commercial real estate developers in the Calgary market.
Imperial, with 2,000 employees spread throughout three buildings, is looking to secure 700,000 square feet of commercial space and already owns half of a square city block in the heart of the downtown -- land that now houses a commercial parking lot.
"We're doing some research," Imperial spokesman Gordon Wong said. "We could renew our existing leases, which run until 2011, we could become a new tenant in a new development, or we could build a new office tower."
EnCana's crescent-shaped, steel-and-glass structure was designed by well-known London-based Foster + Partners, whose architectural exploits include the London City Hall, completed in 2002, last year's redevelopment of Wembley Stadium and the Beijing Airport, which is now under construction. The Calgary project is Foster's largest to date in North America.
A development application for The Bow -- the tower is named for the river that runs through the city and because of its shape -- was submitted to the Calgary's planning department yesterday by the project's developer, Toronto-based Matthews Southwest.
John Brannan, the EnCana executive leading the project, said the company, whose 3,600 employees are currently spread throughout five downtown Calgary buildings, will become the tower's primary tenant, occupying all but six of the storeys. The move into the new building will occur in stages between late-2010 and throughout 2011.
He also said EnCana intends to sell the project between now and the completion date. "Now that we have put in the application, we will start a disposition process to sell this overall project, probably to a trust fund, a REIT, to a developer or to investors, for the long term," Mr. Brannan said.
Booming downtown Calgary is feeling a major squeeze for commercial real estate space and is home to some of the highest lease rates in North America.
But EnCana's proposal raises the amount of commercial space being built or under consideration, city-wide, to 12.5-million square feet, the largest slate of new commercial projects of any city in Canada, according to Calgary's economic development department.While the head of the department, Bruce Graham, said he has little fear a glut could occur, that scenario is one Imperial is considering. "It's too early, at least until we get the [proposals] back, to say which option is the best for us," Mr. Wong said.
Imperial moved its headquarters west from Toronto in August 2005.
Calgary Mayor Dave Bronconnier said other energy firms may be eyeing new developments in Calgary. "Yes, we are meeting with a number of other companies that are looking at building a building but as of this morning, I can't identify who or where," Mr. Bronconnier told reporters.
Mr. Graham said the new Encana tower is symbolic of the westerly shift of the country's economic power base.
"First Canadian Place was built over 30 years ago and, I believe, was symbolic of the shift in economic power that occurred at the time from Montreal to Toronto," said Mr. Graham, a longtime city of Toronto employee before becoming head of Calgary's economic development department three years ago. "In many ways, I think this EnCana project symbolizes the westerly shift today."

Downtown Calgary's biggest landlord, Brookfield, has a completed platform at First Canadian Centre approved for a 64 storey building. It is only a matter of time before they find a lead tenant and move forward on the second tower at 1stCan.