FOR IMMEDIATE RELEASE
Monday, June 16, 2008

Committee endorses Andrin Limited as successful proponent in bid to redevelop downtown's Centre Block

KITCHENER - The growing momentum surrounding downtown Kitchener's ongoing re-energization got another major boost today as the city's Finance and Corporate Services Committee unanimously approved the selection of Andrin Limited as the successful proponent to redevelop Centre Block. The recommendation will be considered for final approval by city council at its regular meeting on Monday, June 23.

The recommendation came from the Centre Block Evaluation Committee, the group of city staff and citizen advisors charged with evaluating proposals to redevelop the block, gathering public input, conducting negotiations and making a final recommendation to Council on a final proponent.

"We are very pleased that Andrin is the proponent for the Centre Block redevelopment. Their extensive experience with downtown reurbanization projects like the Kaufman Lofts in Kitchener and similar projects in other urban centres, will undoubtedly benefit us on what is truly a critical piece of our downtown re-energization process," said Mayor Carl Zehr. "This is a very significant step forward toward another major project that makes a significant contribution to Kitchener's downtown as a vibrant, urban place."

In its evaluation of the Andrin proposal, the Centre Block Evaluation Committee said that the Andrin proposal meets the criteria and objectives set out in the Centre Block Terms of Reference adopted by Council in 2006.

"Andrin's proposal to redevelop Centre Block will bring a much needed high quality residential development into the heart of downtown Kitchener," noted Rick Haldenby, Director of the University of Waterloo's School of Architecture - and a member of the Centre Block Evaluation Committee. "The high quality of the design and architecture of this proposal will set a new standard for high-rise residential developments in Waterloo Region."

Financial Commitment

Members of Council were also pleased to see that the project respects the original financial framework that the city had anticipated for the project.

The city will spend up to $8.75 million to pay for the cost of 250 public parking spaces - at a cost of $35,000 per space - to be located in a new underground parking garage on Centre Block. The city will pay for the parking through a combination of land sales and cash allocated for parking through its Economic Development Investment Fund (EDIF). The city's available funding is currently about $400,000 less than the total cost of parking.

City staff will continue to negotiate financial terms with Andrin and will refine cost estimates with the goal of funding the parking requirement entirely out of the existing EDIF provision of $5.5 million and land sale revenues of $3.1 million without a requirement for any additional funding.

"Along with making a substantial contribution to the ongoing transformation of the downtown, Andrin's proposal will add more vibrancy, more people and more activity into our core," noted Councillor Berry Vrbanovic, Chair of the Finance and Corporate Services Committee. "In addition, it will also provide new assessment dollars for the city's budget through increased property taxes - both from the Centre Block and from adjacent properties that are bound to benefit from this exciting development."

An assessment done by the city in 2007 indicated that once complete, the redevelopment of Centre Block according to Andrin's proposal would generate approximately $1.3 million annual in property taxes. The city's portion of that annual income would be approximately $393,000.

"This project will essentially be a private sector development and therefore our financial commitment to it is exactly what we had hoped it would be all along - we are only paying for the parking spaces we need to meet public demand in the downtown," said Carla Ladd, the City's Chief Administrative Officer and a member of the evaluation committee. "For what is a comparatively small investment by the city, we have the opportunity to leverage a much more significant economic investment into our downtown by the private sector."

Centre Block Valuation
In 2007, both the City and Andrin Investments Limited sought independent land valuations from separate companies for the Centre Block property.

Because the difference between those two original appraisals was greater than 10 per cent, on the advice of the City's fairness advisor, James McKellar, the City and Andrin jointly sought a third professional opinion on the value of the Centre Block lands and buildings from a recognized real estate valuation company - Altus Group.

According to Frank Clayton, from the Altus Group, "In my opinion, a total value of $3.1 million for the Centre Block properties including the two heritage buildings is a fair and reasonable value based on the land transaction from the perspective of the City of Kitchener and Andrin."

Between 1999 and 2002, the City of Kitchener purchased the several businesses and parcels of land that now make up the area being considered for redevelopment on Centre Block. The purchase price for those businesses and land was $7.65 million.

"It's a good deal for our community," noted Councillor John Gazzola. "While there are still some things to be worked out, I believe that in the final analysis this will be a good thing for our downtown."

Public Support
The Andrin proposal earned wide public support during an extensive six-week public consultation process held in the summer of 2007. An estimated 1,000 citizens provided their feedback which was overwhelmingly in support of Andrin's proposal for the block..

The full results of the consultations were shared with Andrin who took the comments into consideration and then incorporated them into changes made to their original proposal.

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For more information:
Michael May
Director of Corporate Communications & Marketing
City of Kitchener
519-741-2935
michael.may@kitchener.ca