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Aeroports de Montreal to Call for Tenders to Dismantle the Former Mirabel Terminal Building With a View to Redeveloping the Underlying Land

MONTREAL, QUEBEC -- (Marketwired) -- 05/01/14 -- During its public Annual Public Meeting today, Aeroports de Montreal (ADM) announced that its Board of Directors has given the green light to issue a call for tenders for the dismantling of the former terminal building at Montreal-Mirabel airport. The building, which has been vacant since late November 2004, occupies only 15 acres of the 6,000-acre operations zone at Montreal-Mirabel, since converted into a world-class aerospace hub.

The move by ADM follows 10 years of efforts, together with local and international partners, to find a new role for the disused building. It is supported by two expert reports, by Groupe Altus and ARUP. Both show that the former terminal is now totally outdated and that its potential for recovery and conversion to purposes other than airport operations is virtually nil and economically unjustified.

Transport Canada, the site owner and lessor, has received copies of the expert reports, has agreed with the assessment that the building is obsolete, and has confirmed that the land lease provides for dismantling under the obsolescence clause-which, incidentally, was previously applied in the early 2000s to several portions of the former Montreal-Trudeau airport terminal that were demolished to make way for the new international and transborder jetties.

The final approval for the granting of the contract for the dismantling of the former Mirabel terminal building will be given by the ADM Board this coming September.

"Indefinitely maintaining an unoccupied, outdated and economically unsalvageable building would be irresponsible," said ADM President and Chief Executive Officer James C. Cherry. "Our expenses for minimally maintaining this building since late 2004 have totalled more than $30 million, in vain. Enough is enough! In addition, the building urgently requires major repairs of at least $15 million. It is time to move on and look to the future."

He added: "Our intention now, jointly with our partners in the Greater Montreal region and pursuant to our mission, is to focus our efforts on identifying forward-looking projects for the site, with job-creation potential."

Groupe Altus report

According to the report by Groupe Altus, an independent real estate consulting firm, the potential for repurposing the former Mirabel terminal building is severely limited because of its location. The site's location conditions are inferior to those generally sought for commercial projects. Its immediate surroundings are not attractive to the general public and, compared with more densely populated areas, its location is deemed marginal.

In addition, if the terminal and adjacent structures were to be converted to purposes other than airport operations, extensive work would be needed to bring them up to standards. The estimated cost of these upgrades is $27 million for the main terminal building and $36 million for the overall terminal complex, including the multi-level parking facility and the aeroquay. These amounts do not, however, include the investment that would be required to repurpose the buildings.

Even if the upgrades were to be done, the former terminal building would still suffer from incurable functional obsolescence, owing among other things to its unorthodox interior layout, ceiling heights that are either too high or too low, an energy-inefficient glass envelope, and high levels of asbestos.

ARUP report

The report by ARUP, a global expert in airport planning and engineering, states that the Mirabel terminal complex is completely outdated and has neither the physical capacity nor the proper layout and facilities to accommodate the passenger traffic of an international airport of the scale of Montreal-Trudeau, which will satisfy local needs until at least 2072. Furthermore, the original Mirabel terminal concept, which used passenger transfer vehicles (PTVs), is now outdated.

The former Mirabel terminal building was in operation for 30 years and has been unused for 10 years. It will be nearly 100 years old by the end of the ADM lease in 2072. The reasonable economic life of an airport terminal complex is between 40 and 50 years. Experience elsewhere in the world has shown that demolition is the usual fate of outdated terminal buildings: either new, standards-compliant facilities are built to replace them, or the underlying land is redeveloped.

Economic impact study

Moreover, a recently updated economic impact study reveals that more than 3,700 people work directly for the companies established on the Montreal-Mirabel airport lands, with 86% of them employed in the high-value-added aerospace sector. As a result of the Bombardier Aerospace CSeries project and its spinoff effects, their number is expected to rise in the coming years.

"It's important to distinguish between the airport, which is now a booming industry hub, and the former terminal, a building that has stood unused for nearly 10 years," Mr. Cherry concluded. "Montreal-Mirabel airport is anything but a white elephant. ADM is set to invest a total of $100 million in the facility in the next few years, including $40 million to upgrade Runway 06-24, and our tenants are making major investments as well."

About Aeroports de Montreal

Aeroports de Montreal is the local airport authority that has been responsible for the management, operation and development of Montreal-Trudeau and Montreal-Mirabel international airports since 1992. The Corporation employs more than 650 people at the two airports.

For further information on Aeroports de Montreal and its operations, please visit our website at www.admtl.com.

A map of Montreal-Mirabel is available at: http://media3.marketwire.com/docs/Mirabel.pdf.

The Groupe Altius report is available here: http://media3.marketwire.com/docs/Altius_EN.pdf.

Contacts:
Source:
Christiane Beaulieu
Vice-President, Public Affairs and Communications
514 394-7304

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