Nortel's fall shatters Crystal Beach

A once-bustling neighbourhood near Nortel's Ottawa research campus has grown empty and quiet in the wake of the former tech giant's demise.
The crystal dome of Nortel Network Corp.'s glass atrium can be seen from the empty parking lot of Crystal Beach Plaza, where Crystal Pizza is located. The shop estimates orders are down 60 per cent from last year because of the Nortel layoffs. ((Julie Ireton/CBC))
A once-bustling neighbourhood near Nortel's Ottawa research campus has grown empty and quiet in the wake of the former tech giant's demise.

The huge crystal dome of Nortel Network Corp.'s glass atrium now overlooks empty parking lots next to strips of ailing shops in the Crystal Beach neighbourhood of the former municipality of Nepean, now part of Ottawa.

"Business is going really low and low and low everyday," said Essy Yahglali who runs Crystal Pizza on Ullswater Drive, just down the street from Nortel's Carling Avenue campus.

Nortel employees used to frequent his take-out pizza shop over the lunch hour, and he could usually expect a big order on Fridays, when they had parties at the campus.

Now, he doesn't even bother opening for lunch. Yaghlali estimates pizza orders have dropped 60 per cent since the Nortel collapse, and he worries he may soon have to close the store.

"I don't think we can go more than six months more," Yahglali said.

Nortel filed for bankruptcy protection in January and has announced more than 5,000 layoffs in recent months. Just this past Friday, N.J.-based Avaya Inc., which won an auction for Nortel's Ottawa and Belleville, Ont.,- based business unit, announced it would cut about 400 more employees.

Nortel shed 14,000 Ottawa workers

In 2000, Nortel employed 17,000 people in Ottawa. Today, it has less than 3,000 Ottawa employees, as illustrated by its empty parking lot. ((Julie Ireton/CBC))
Back in 2000, Nortel had about 17,000 employees in Ottawa. At that time, the telecommunications company employed close to 100,000 people worldwide. But a sudden plunge in its stock price in 2001, the sagging of its sales in subsequent years and an accounting scandal in 2004 all took their toll. Eight months after it filed for bankruptcy protection and started liquidating its assets, the company has less than 3,000 employees in Ottawa.

Crystal Pizza isn't the only shop emptied of its customers as a result of the Nortel decline, Yahglali said, pointing out that a small corner grocery store on the other end of the strip mall has cut its business hours as well.

"It's not good for this area and the community we have and this plaza," Yahglali said.

Ralph and Son's Diner is nestled in a strip mall on Carling Avenue. Nick Nesrallah, the son of owner Ralph Nesrallah, is the manager and cook of the local hangout frequented by many Nortel employees and former employees.

"Over the years, we've been noticing all the things that have happened at Nortel does affect us a bit," he said between cracking eggs and tossing strips of bacon on the grill.

Many of those laid off from Nortel have found work elsewhere, he said, but in most cases, the new jobs have taken people out of the neighbourhood.

'Nice neighbourhood'

Rick Nelson and Paul Williams are two retired Nortel workers who still come to Ralph and Son's.

Williams said he has lived in Crystal Beach since 1972 and was employed by Nortel for 28 years. He moved here because he wanted to settle down in a subdivision close to Nortel.

Ralph and Son's Diner is still a hangout for many Nortel retirees. ((Julie Ireton/CBC))
"But the real thing was we were looking for a nice neighbourhood," he says over toast and marmalade.

"Every street in Crystal Beach has someone who was Nortel or is Nortel," said Nelson.

The local people affected by Nortel's collapse include many pensioners who are facing the prospect of losing a large chunk of their pensions. Nortel's assets are not worth enough to cover all of its debts, including its pension commitments. If the money is largely paid to other creditors, such as bondholders, at pensioners' expense, things could get worse for Crystal Beach.

"Obviously, if people have a reduction in their financial income, they're going to have to reduce costs," said Nelson. "I can see people forced to move out of the community eventually. There's going to be a lot of people [who] can't afford their existing homes, I'm sure."

There does remain hope for businesses in the neighbourhood, however. There has been some talk of the federal government taking over the Nortel building to house public servants.

Yaghlali thinks that could bring customers back to his shop and to those of his neighbours.

"It's going to be better," he said.

Google Map of the Crystal Beach neighbourhood