A labour union with a long history of investing to create jobs for its members has started construction on a new residential tower in downtown Hamilton and is planning for another.

The Labourer's International Union of North America (LIUNA) is building a $40 million apartment tower for students beside the iconic Lister Block in the heart of the city at the same time as it is planning for another condo tower on the site of the derelict bingo hall at King and Hughson streets.

LIUNA vice-president Joe Mancinelli said the projects, financed from the union's pension plan, will be a major economic boost for the city and for his members.

"I'm convinced there will be some strong economic impact in this quadrant because of our project," he told a gathering on the construction site Thursday. "When you have 375 students pouring out onto James Street there will be some economic impact."

The project already underway is a 20-storey tower of 160 rental units to house students attending McMaster University, Mohawk College and other institutions. The proposed project will turn the former bingo hall into a mixed-use building including commercial, condo and rental units.

The new student tower will be immediately north of the Lister Block at the north-east corner of James Street North and King William Street. It's the site of the former William Thomas building, a 1850s-era building demolished as part of LIUNA's renovation of the Lister structure.

While the Thomas building is gone, its elaborate façade has been preserved — removed stone-by-stone, catalogued and stored in a warehouse waiting to be incorporated into the new tower.

Mancinelli said he felt it was important to preserve the historic part of the former building to save something of Hamilton's history for the future.

"When you tear everything down you're tearing down the nostalgia and the heritage, the soul of the city," he said in an interview. "People who live here want to walk down the street and see recognizable buildings and streetscapes. It makes them comfortable to say 'I remember this as a child.'"

Most of the units in the student tower will be designed to house four people each, although a few on the top floors will be small apartments for graduate students and researchers. Units will likely rent in the range of $500 to $600 a month.

The project fulfils a promise LIUNA made to the city when it sold the Lister Block to Hamilton for $25 million after completing its renovation. The commitment was for a project that would provide tax revenue for Hamilton's coffers.

Both projects will be financed from the union pension plan's year-old Conversion Fund — a pool of money for converting derelict commercial buildings to residential uses. LIUNA's pension plan is worth $6 billion.

Mancinelli said the bingo hall project is in the design phase.

Mayor Fred Eisenberger called the Lister Block "a real catalyst for this part of downtown" and said the new student housing "is exactly the right call for Hamilton."

"This is real city building in action," he added.

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The city's planning director Jason Thorne was also excited to see the project underway after years of paper work.

"We create policy and programs to get to this point of seeing projects happen," he said. "This is a very exciting moment for the city staff."