Vertikal (471-481 King St E) | 23 & 19 fl | U/C

[rangersfan]

Developer Buys Kitchener Block

December 11, 2010 | Terry Pender | The Record | LINK

KITCHENER — A Guelph-based developer has bought an entire city block along King Street East and plans a mixed-use development with at least 250 residential units.

Fusion Homes closed the deal last month for the 2.4-acre block — bounded by King, Cameron, Charles and Madison streets — paying $3.6 million.

“We are planning a substantial mixed-use development on the property,” Lee Piccoli, president of Fusion Homes, said.

At least two highrise buildings are to be constructed and very likely some townhouses as well. The company will look into the demand for office and retail space in that area, but that will not be a large part of the project.

Piccoli did not want to speculate on when construction will begin.

“I am very bullish on downtown Kitchener,” Piccoli said. “When the opportunity came up, we jumped at it.”

Surface-parking lots now dominate the block where a used-car lot and a car rental agency operate.

“I think as a developer you’re always trying to see something, not as it looks now, but as it looks three or five years from now. So that is something that we found really attractive about the property,” Piccoli said.

King Street East has seen slow, steady improvement since the City of Kitchener built the $22-million farmers’ market, which opened in 2005.

Since then, three bakeries, two restaurants and a small grocery store have opened on adjacent blocks. Abandoned homes on Madison, Eby, Cedar and Duke streets have been renovated and occupied.

Fusion Homes’ move follows, by six years, the creation of a special program — called the economic development investment fund — that pumped about $100 million into different downtown projects.

“The mayor and the council seem really committed to the redevelopment,” Piccoli said.

Cory Bluhm, an urban planner who works with the city’s economic development department, is pleased to see the large private-sector investment in that property.

On the next block is one of the most handsome redevelopments in the downtown, the Betzner Brownstones, and that makes it doubly frustrating to look at surface-parking lots nearby, Bluhm said.

“You can see what they did with the Betzner Brownstones on the next block and you think: ‘Geez, why can’t somebody do the same thing there,’ ” Bluhm said.

Veteran broker Peter Benninger, of Coldwell Banker, has watched downtown property values increase substantially in recent years.

Five years ago that land would probably have fetched $500,000 an acre. Fusion Homes paid about $1.5 million an acre.

“Thing are changing,” Benninger, said.

The past 10 years have seen a growing list of high-density development in the core and central neighbourhoods, including — the Sandhills development and Iron Horse Towers on Queen Street South, the Kaufman Lofts on King Street, Lofts on Mansion, Le Marche Residences behind Your Kitchener Market, The Regency at Queen and Weber streets and the Drewlo apartments on Victoria Street South adjacent to Victoria Park.

The school of pharmacy, the medical school, the graduate school of social work, the redevelopment of the Lang Tanning building and the planned light-rail transit line are also hugely positive influences, Benninger said.

“It’s all these incremental things,” Benninger said.

“It’s amazing to me as I’ve watched the downtown transition,” Benninger said. “At one time we were one of the lone brokers that were doing work in the downtown because nobody wanted to pay any attention to it.”

By 2016, the provincial Places to Grow Act will require cities in the Greater Golden Horseshoe to direct 40 per cent of new development into existing neighbourhoods in central Kitchener, central Waterloo and the Galt section of Cambridge.

The legislation aims to curb urban sprawl over farmland. Kitchener has about a 20-year supply of land for new subdivisions, Waterloo is down to about 10 years and Cambridge is somewhere in between.

“For a company like ours, we are young, we are innovative, and we are cutting edge and we want to grow. To plan to grow just through building greenfields, I don’t think there is going to be enough product out there, to be honest,” Piccoli said.

“So part of our evolution as a company is to make the commitment to work with municipalities and the province to build more infill projects and more mixed-use projects and things like that,” Piccoli said.