A historic government building on a prime piece of downtown Toronto real estate is now on the market, fuelling speculation about its potential for redevelopment.

The Dominion Public Building, the five-storey curved concrete structure next door to Union Station, is being sold by Canada Lands Company (CLC), the crown corporation that acquires surplus federal government properties to manage their sale and redevelopment.

CLC acquired the 33,662 square metre building and 0.775-hectare lot from the federal government on Jan. 3. Neither side would disclose the sale price.

"The Government of Canada is committed to obtaining the best value for Canadians while managing large and complex property portfolios," Jeremy Link, spokesperson for Public Services and Procurement Canada said in a statement to CBC Toronto.

Toronto: Dominion Public Building

Dominion Public Building at 1 Front St. West is protected as a federal heritage property. (CBC)

With the property now in CLC hands, the crown corporation isn't speculating on what it hopes to fetch on the open market.

There is no asking price.

"The property is currently on the market and it is our intention to sell the site in the coming months," Manon Lapensée, CLC spokesperson, wrote in an email.

BMO Capital Markets has been hired to broker the sale.

The building is currently home to about 1,500 federal bureaucrats, working mainly with the Canada Revenue Agency and other departments. The government plans to relocate those offices within the Greater Toronto Area by 2021.

Redevelopment

The large parcel of land in the heart of downtown has real estate developers speculating on the property's value and future potential.

"It's going to astonish people how much this sells for," developer and real estate broker Brad Lamb said in an interview.

The property's size, location and existing architecture will make it an attractive purchase, but only for major developers, Lamb says.

Toronto: Dominion Public Building two

Canada Lands Company, the crown corporation that manages the sale of government properties, recently acquired Dominion Public Building. The heritage site is now for sale to the public. (CBC)

"It's going to be a big player.  A pension fund, one of the very deep-pocketed local developers or an international buyer. There's going to be a mega-development here."

"That's a marquee property and there's no way in the world anyone is going to keep it as is. It's going to be sold for the air rights," Lamb said.

Is a condo coming?

The property is zoned "commercial residential" and building regulations would permit a tower up to 137 metres tall.

The site is flanked by recent and planned developments, both residential and commercial, including the L Tower condominium to the east and a proposed 53-storey office tower directly south of the property.

Lamb believes multiple office or residential towers could be built on the site and that the maximum height permitted could be increased since the surrounding neighbourhood consists of mostly tall buildings.

"There are very little limits to the height here. There's no reason this can't be super tall," Lamb said.

Heritage protection

Any redevelopment of the existing building will have to take place under some of the strictest heritage protection in Canada.

As a "classified" property, the Dominion Public Building is in the federal government's highest category of heritage buildings. It was registered on Toronto's first heritage inventory in 1973. It forms part of the city's Union Station Heritage Conservation District.

Toronto: Dominion Public Building 1955

Dominion Public Building, seen in this 1955 photo, was built between 1929 and 1935. It is now for sale (Toronto Public Library)

City staff have also filed a notice of intention to designate the building under a separate part of the Ontario Heritage Act that would protect its interior.

The notice, issued on Tuesday, calls the Dominion Public Building a "rare" and "exceptional" landmark and says its construction during the 1930s "was a reflection of the significance of Toronto to the nation's economic status and recovery"

Historical significance

Built between 1929 and 1935 and designed by architect T.W. Fuller, the Dominion Public Building, also referred to as Toronto Customs House, has served as an important federal tax administration centre for decades.

Toronto: front street sketch

Original architectural drawings for Dominion Public Building. (City of Toronto Archives)

Its curved front facade hugs a bend in Front Street between Bay Street and Yonge Street. Paired with neighbouring Union Station, it forms a "grand streetscape" and is considered "one of the most important examples of Beaux-Arts Classical architecture in Canada," according to its 1983 federal heritage designation.

"It's a special building in Toronto," Kaitlin Wainwright, a historian with Heritage Toronto, said in an interview.

Wainwright says the Dominion Public Building is a key site in the history of the federal government in Toronto.

Toronto: Dominion Public Building interior

The City of Toronto is seeking to protect interior features of Dominion Public Building under the Ontario Heritage Act. (City of Toronto Archives)

Together with Union Station, it represented Toronto's growing prominence as a national centre for commerce and culture.

"It spoke to the transition of Toronto to a more modern city," Wainwright said.