Decision to sell Edmonton Research Park assets upsets some tenants

The city's decision to sell two buildings at the Edmonton Research Park (ERP) shows a lack of vision around innovation, says a consortium of business owners who operate there. But the city says it doesn't need to own the buildings to ensure the park serves as an innovation hub.

On March 23, city council's executive committee gave administration the green light to proceed with negotiations with prospective buyers to complete the sale of the Advanced Technology Centre (ATC) and Research Centre 1 (RC1), two buildings among 18 on a parcel of land south of 23 Avenue between Parsons Road and 94 Street.

This followed a decision made by the previous council in 2021 directing administration to sell the buildings, allowing it to reallocate $1 million set aside to rehabilitate ATC and avoid future capital costs on both buildings, estimated at $32 million.

The Edmonton Research Park Business Consortium, a community of tech and life sciences companies operating at the park, had hoped to persuade executive committee not to sell the buildings, or at least to wait until after it consults with tenants and articulates a true vision for the park.

"What are we doing as a city to ... build on that as an asset so that we can diversify the economy, so that we can do something that other jurisdictions around the world have done with research parks?" Bio-Stream Diagnostics CEO John Murphy said in an interview with Taproot. "We haven't quite done that yet, but we're set up well to do it."

Mayor Amarjeet Sohi and the councillors on the committee were not persuaded that keeping the buildings was in the city's best interests, but they did pass a motion from Ward Nakota Isga Coun. Andrew Knack (following an inquiry from Karhiio's Coun. Keren Tang) directing administration to engage with ERP businesses to provide options and actions to advance economic development opportunities in line with the principles of the Economic Action Plan.

That was not a satisfactory result for consortium member Mehadi Sayed, CEO of Clinisys EMR. "We feel that we were let down by the city," he said.

The outside of the Advanced Technology Centre

The Advanced Technology Centre is one of two Edmonton Research Park buildings to be sold by the city, over the objections of some of the businesses based at the park. (Flickr)

City council approved the creation of the ERP in 1982, registering a restrictive covenant to ensure that its uses and future development continue to support research activities. The Edmonton Economic Development Corporation (EEDC) took over management of the park in 1996 and was responsible for it until 2020, when EEDC was restructured. Its visitor economy functions transferred to Explore Edmonton, its economic development functions transferred to Innovate Edmonton, and responsibility for the research park reverted to the city.

Innovate Edmonton CEO Catherine Warren told council last year that her organization's priorities did not include the provision of building operations or property management activities at the research park. Her organization is planning to open a new space downtown in the fall.

The consortium was born out of frustration with the lack of support for the ERP as an innovation hub, even though the companies based there employ more than 1,500 people and generated more than $200 million in revenue in 2020, said Ahmad Jawad, CEO of Intellimedia.

"We're not doing it for ourselves, we're doing for the community," he said. "We want to stop saying Calgary is better than us in a certain way. Well, they are better than us because they talk to each other better."

Not everyone in the ERP is opposed to the city selling ATC and RC1. In fact, John Yao of Hermay Labs, which is based in the park, is one of the prospective buyers. He told executive committee that he wants to promote the innovation community and doesn't want the restrictive covenant or makeup of the park to change.

Sayed, Jawad, and Murphy said it's the privatization itself that is the issue, and they're worried this is the first step towards the city getting rid of the park altogether. "We don't want to treat these (buildings) like real estate," Murphy told the committee. "When a private company buys a building, they're there for profit. And they should be."

In an interview, Murphy cited the Canadian Critical Drug Initiative that Applied Pharmaceutical Innovation (API) is working on building at the park in partnership with the Li Ka Shing Institute of Virology as an example of the funding that can be attracted to such a hub when organizations work together.

"The way that you show that you're taking something seriously is you build community, you build support, you attract capital, you attract talent," Murphy said.

It's a longstanding debate in the city's entrepreneurial ecosystem. Does the city need a common narrative to drive innovation? And what role do physical spaces play in driving that narrative?

Negotiations are now underway for the sale. "Regardless of who owns these two buildings, the Edmonton Research Park will continue to serve as an innovation hub in Edmonton," Chris Thiessen, acting director of the city's real estate branch, told Taproot in an email.

City administration is to report back to executive committee on its engagement with businesses in the park in November.