Downtown Victoria is facing another kick in the teeth as hundreds of office workers could be moved to Central Saanich with the awarding of a contract to Pacific Blue Cross to administer Health Insurance B.C. services.
Pacific Blue Cross has announced its subsidiary PBC Solutions will, this spring, take on administration of Health Insurance B.C. services, including the Medical Services Plan, PharmaCare and Fair PharmaCare programs.
The work is to shift to nearly 35,000 square feet of office space at 2261 Keating Cross Rd. in Central Saanich, space Pacific Blue Cross took possession of in December.
The contract had been filled by Maximus Canada since the spring of 2005, when it took over operations and information technology to improve health service to the public.
Jeff Bray, chief executive of the Downtown Victoria Business Association, said the news came as a surprise; he sees it as a blow to downtown, which has suffered due to many workers not returning to the office as pandemic restrictions eased.
“Obviously, any time you have a large employer leave for whatever reason that’s not a great thing, but the reality is that Pacific Blue Cross has the space out at Keating and so when they win the contract they’re going to [use that space],” he said.
Bray said it’s hard to say what the impact will be as it’s unknown how many of Maximus’ 500 employees were actually working in its offices at 712 Yates St. since the pandemic.
“It’s a concern in that it’s another number of people that won’t be downtown doing downtown things,” said Bruce Williams, chief executive of the Greater Victoria Chamber of Commerce.
“I’m hopeful that there will be an opportunity for someone else to take that space over though and occupy it.”
Tristan Spark, vice-president with commercial real estate firm Colliers, put the deal together to get Pacific Blue Cross into 2261 Keating Cross Rd. at the end of last year.
He said while he understands Maximus may be looking for smaller office space, it’s not a heavy blow to the downtown.
“It’s bad for [building owner] Concert Properties, but I don’t think it’s some kind of gut punch to the downtown office market,” he said.
Colliers first-quarter survey of downtown office vacancy showed it is about 6.38 per cent, only slightly higher than the fourth quarter of last year and still below the 10-year average of seven per cent.
“I don’t really feel like this is going to cause some kind of issue or that there’s a trend there suggesting that other employers are doing the same,” he said.
“Because at the same time we are seeing a lot of interest from legal, accounting and engineering firms that all seem to be expanding.”
He did note the trend he has seen is the vacancy rate in the suburbs is now lower than the office vacancy rate downtown. Spark said that changed for the first time in a decade in 2021, and likely for a suite of reasons including the cost of parking and the commute.
Bray concedes the office vacancy rate hasn’t changed much downtown, but in the new world of having more people working remotely, downtown’s restaurants, stores and services all feel the lack of personnel on site.
“It will take some time to see whether or not government offices over the next few years start to downsize or whether or not other businesses and entities come in to fill the space,” he said. “In the short-term things are still fine.
“For us the real measure is occupancy on any given day — the fact that the space is leased, but 80 per cent of the employees on any given day are working from home is not nearly as good as if 50 per cent are in every day,” he said. “So we will be following that trend closely.”
The winner in all this is Central Saanich.
“We do have a key section of commercial industrial land, so it’s always nice to see people choosing us,” said Mayor Ryan Windsor, noting Central Saanich’s proximity to the airport and the Swartz Bay ferry terminal can sometimes play a role in luring new business.
Windsor said companies moving into the area helps to let people know Central Saanich is open for business. “It potentially does because people sit up and take notice and they may want to build new things and new buildings may get constructed for co-location purposes,” he said. “I think Langford leveraged that for a long time — a business would move in and then another business will want to co-locate. I could see it happening on the industrial side.”
One of Central Saanich’s issues has been housing for its workforce, but Windsor said work is underway to alleviate the pressure.
“We have changed our housing mix a little bit,” Windsor said, noting Starlight Developments has announced plans for 235 rental units.
“Potentially some employers may have said, ‘there’s housing coming on stream in the next year or two and that could benefit employees moving here.’ ”
Starlight broke ground in December for the next phase of development at the former nursery lands off Lochside Drive. Plans call for 235 purpose-built rental homes to be spread across a pair of six-storey buildings at 2515 Hackett Cres. The project, along with a six-storey condo building with 50 units and 14 neighbouring townhouses, was approved in February.
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