During the 2011 civic election, Surrey Mayor Dianne Watts insisted the new city hall would cost a net $50 million.
She arrived at that by estimating that a lease on the old building would bring in $47 million to offset the cost. She says this week, that number is now $38 million.
So far, no one has signed a lease agreement.
However, leasing agent Colliers International says Crown counsel will be occupying about 45,000 square feet of the old building, which will bring in $900,000 annually.
That leaves 21,000 square feet left in the west tower and another 56,000 square feet in the south tower.
“Tenants are currently looking at entire floors of each of the buildings, subject to further negotiation,” said Dilraj Sohi, with office leasing and sales of Colliers International.
If the entire building can be leased, it will generate $2 million annually, Sohi said.
However, leasing the whole building may be challenging, given Surrey’s record office vacancy rate last year.
An Avison Young report examining the region’s office market painted a dark picture for Surrey at the end of 2013.
“Surrey’s office vacancy rate hit a record high of 17.3 per cent, up from 11.5 per cent at year’s end 2012 as a soft leasing market combined with a handful of large tenants leaving the market or moving into build-to-suit projects,” the Avison report says.
The report also indicates throughout the region, suburban lease rates will remain flat for the next six months to a year because of the heightened vacancy. The report also notes “Surrey rental rates will likely face compression.”
Jordan Bateman, B.C. Director for the Canadian Taxpayers Federation, remains skeptical as to whether the old city hall will be leased any time soon.
Sohi said the former Surrey City Hall campus is wonderfully positioned for those interested in leasing.
“The towers are situated on 15 acres of immaculately landscaped land, including walking trails, water features, and access to an on-site restaurant,” Sohi said. “What makes this a valuable spot for a business or government to locate is that this is part of a justice precinct. On-site amenities include an abundant amount of parking, elevator access, extensive glazing allows for extensive natural light and great views.”