Centre Block land to sell for $3.1M
But it may take 3 years for construction to begin
April 07, 2009
It could be up to three and a half years before construction begins on an ambitious redevelopment of city-owned lands in the core.
The Brampton based developer Andrin Limited and the City of Kitchener tabled an agreement of purchase and sale yesterday for 2.6 acres of land on the western half of the block bounded by King, Young, Duke and Ontario streets.
"This agreement solidifies the future of Centre Block," Rod Regier, the city's director of economic development, said in a presentation to city council.
"The Centre Block project is one of the most ambitious residential projects in Waterloo Region. It sets a new standard for reurbanization, environmental design and architectural excellence," Regier said.
The city will sell the land for $3.1 million. The agreement is a milestone in the 10 -year-long effort to bring new life into the city-owned lands on the block.
So far, the city has paid out about $13 million to buy the lands, buildings, businesses, and pay associated fees and interest costs.
The 32-page agreement is available on the city's website and will be circulated among several advisory committees in the coming weeks before coming back to city councillors for approval on April 20.
But the details of the building designs, plans for the underground parking garage and construction contracts will not be nailed down until the city and Andrin sign what's called a development agreement.
That should be done by the end of November.
"Just so people understand, in the next week there is not going to be a big new building there," Coun. John Gazzola said.
"So what kind of ballpark time would we be looking at?"¾ Gazzola asked.
The time will largely be a function of the strength of the marketplace, Regier said.
"We have outlined a maximum time it can take, which is 36 months from the completion of a development agreement," Regier said of the project's first phase.
The developer has proposed a $90-million redevelopment that includes two medium rise buildings with about 380 condominiums, underground parking, retail and mixed use space along the streets and the renovation of the Mayfair Hotel and 156-158 King St. West into a boutique hotel and spa.
The development will be done in three phases. The first phase will front on Young and Duke streets and see the underground parking garage constructed.
Phase 1 also includes a building with about 225 condominiums.
Under the proposed agreement of purchase and sale, Andrin must deposit $2 with the city and begin construction within three years of Nov. 30, 2009 or within three years of the signing of a development agreement.
The deadline for the start of construction of Phase 2, which fronts on King Street, is five years from the signing of a development agreement, or five years from Nov. 30, 2009.
The Mayfair Hotel and 156-158 King St. West will be transferred to Andrin within six years from Nov. 30 when the first two phases are complete.
Peter Smith, the president of Andrin, said his company remains committed to the project and is confident the market for new housing will return.
And when the market returns, he said downtown Kitchener is the ideal place to be building new condominiums.
But Smith also counselled patience, saying about 80 per cent of the units must be pre-sold before work begins on any phase.
Smith's company bought the old Kaufman factory and transformed the building into condominiums.
"It does take time, all these deals take time," Smith said.
"I should remind you that we purchased the Kaufman rubber factory in 2002, we started construction in 2006, and we are now out of there," Smith said.
One public delegation appeared before city councillors yesterday urging caution.
Jack Redmond, a retired developer, real estate agent and surveyor, said the agreement needs to be more specific about what lands will be transferred to the developer.
Redmond also said it is very unusual for the city to pay the legal costs for the transaction, something the developer normally covers.