Hamilton City Centre sold for $25m
http://www.thespec.com/news/business...e-sold-for-25m
The 450,000-square-foot building that houses city offices, commercial space and retailers was purchased for $25 million by a Barrie-area developer through a numbered company. The developer has told city staff he wants to fill the centre, focusing on high-tech and creative industries.
The property, which temporarily was bustling with politicians and city staffers as City Hall was renovated, has struggled with vacant space, unpaid taxes, inability to land anchor tenants and retailer turnover.
But the three-storey complex, built as a downtown mall for $70 million in 1990 by Cadillac Fairview Corporation, is considered a key element in the rejuvenation of the city core.
The purchaser declined an interview with The Spectator but released a statement through Ana Cacilhas, general manager of the City Centre.
“The new owner is anxious and eager to bring new tenants into the Hamilton City Centre. We are committed to the complex as well as participating and assisting in the revitalization of the downtown core. Our plans for the complex will focus on renovations, aggressive leasing and marketing.”
A corporate search of the numbered company that purchased the property includes an address in Penetanguishene, but no directors of the company are listed.
Fercan Developments purchased the former Eaton Centre for $3.6 million in 2000 when the iconic retailer went bankrupt.
Mayor Bob Bratina’s office confirmed the sale Wednesday but declined a request for an interview, saying the details are confidential.
“He can’t say anything else right now,” Peggy Chapman, the mayor’s executive assistant, said in an email.
Downtown Councillor Jason Farr greeted the sale as good news, although he was trying to get information in between council meetings Wednesday afternoon.
“I’m hopeful. If someone is willing to make a substantial investment into a prime piece of property, an esthetically pleasing piece of property, I’m happy.”
Farr says the proximity to the recently renovated central library and farmers’ market, the Lister Block undergoing upgrades and the burgeoning arts scene on James Street all make the City Centre both an attractive investment and a crucial piece in the push to keep the area’s momentum going.
There was also $1.5-million worth of upgrades to accommodate about 500 city staff, including windows cut into the walls of the old Eaton store, and new elevators.
The city still rents about 90,000 square feet of space in the mall for public works, bylaw enforcement and recreation and culture staff.
There are also chain retailers taking up small storefronts, such as La Senza and Fairweather, along with discount retailers such as Hart, a call centre, a career college and a food court. Vacancy runs at about 25 per cent.
Glen Norton, the city’s acting manager of downtown renewal, said he met with the new owner Tuesday. The meeting was arranged by Fercan officials.
Norton declined to give the new owner’s name, saying he was unsure whether the owner wants his identity revealed. In fact, the buyer did not offer a business card or phone number to Norton.
He said the buyer owns number of properties throughout Ontario, including some in Hamilton.
“I was favourably impressed with his desire to be part of the success of the downtown. He’s a strong believer in this city.”
Norton said the developer told him of his hope to concentrate on finding tenants in the creative and tech sectors, He said there were discussions, although no commitments, to look at breaking open the solid expanses of street-level concrete facing James and York and adding windows and doors.
“I get the sense he’s a doer, not a talker … He seems like a serious businessman, not someone who craves attention.”
The City Centre has an assessed value of $17.6 million and pays more than $533,000 in taxes to the city. Although Fercan was $410,000 in arrears on the City Centre in 2009, taxes are now up to date, according to city staff.
Fercan was also behind by $1.1 million on 21 King St. W., the Commerce Place towers.
That building was bought by Hamilton-based property developer Wilson Blanchard, which also wanted to buy the City Centre, according to company partner David Blanchard, and had worked on a deal with Fercan.
“We have a major tenant who was quite interested in taking quite a bit of it … They would have been good for the downtown.”
Blanchard says the tenant is now looking at space elsewhere in Hamilton.
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