WATERLOO — If big data is the new oil, the former police station on Erb Street could be Waterloo's new economy gusher.

The Communitech Data Hub is slated to move into 19,000-square-feet of space in the former police station at Erb and Albert streets late this fall.

"We are pretty excited about the whole thing," says Iain Klugman, chief executive officer of Communitech, the organization that advocates for Waterloo Region's tech sector.

Waterloo city councillors will be asked Monday to approve seed funding to get the Data Hub open and help Communitech secure financial support from other levels of government and corporations.

Waterloo wants to emulate the success of the Communitech Hub in the Tannery building in downtown Kitchener. The Hub was launched in 2010 with a $500,000 grant from the City of Kitchener. That support helped Communitech secure $20 million from Ottawa, $40 million from Queen's Park and about $120 million from corporations.

Dozens of startups incubated in the Hub have moved into nearby offices, employing more than 800 people.

"The seed money from the municipality is really important at the beginning because the signal it sends to public and private sectors is — this is important," Klugman says.

Waterloo council will be asked to approve $340,000 for the Data Hub. It will also be asked to approve a $190,000 grant for 2017 and $150,000 for 2018.

The funds would help Communitech with early operating costs, hiring staff, programming, events, marketing and utilities until the space is fully occupied, says a city staff report.

The city funding will help secure $5 million in matching funds from corporations Communitech has identified from companies that want to collaborate on data research.

"We have already had a tremendous amount of interest from companies," Klugman says.

Negotiations are underway with IBM, the Ontario Centres of Excellence and the Ontario government about investment in the Data Hub. When it is full, the Data Hub is expected to house 14 companies, both startups and corporate innovation labs, employing 125 people.

The building at 14 Erb St. W. used to house the Waterloo detachment of the Waterloo Regional Police. It was sold to Ophelia Lazaridis, wife of BlackBerry co-founder Mike Lazaridis, in 2013 for $3.1 million. At that time, it was announced the heritage building would be turned into a boutique hotel.

Quantum Valley Investments, Lazaridis' quantum technology venture fund, owns the building and plans to lease it to Communitech if the Waterloo approves the seed funding.

For the past two years, Communitech has searched for a location in uptown Waterloo, tying nicely into the city's ambition to become a centre for data research, Klugman says.

"The city is very, very keen as well, but this is something we initiated," Klugman says. "We said: 'You know what? We need to be in Uptown.' We believe in the urban entrepreneurship model, and we think we need to do something."

The Data Hub would offer programs for data-driven startups, public-sector researchers and corporate partners. It would focus on big data, open data, high-performance computing, cybersecurity and smart cities technology, says the city staff report.

It would house Canada's Open Data Exchange, a digital warehouse of data gathered by the public sector that is made available to data scientists looking for insights, trends and products.

The Data Hub would also be one of five IBM Innovation Incubators in Ontario. The technology giant is spending $45 million on the incubators to bolster research by universities and startups into high-performance computing.

"While data represents an exciting new frontier for technology companies, markets are fragmented and many stakeholders struggle to unpack Big Data, Internet of Things and open data into products and services that result in commercial and economic value," says the city staff report.

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"While the rest of the world struggles to define a big data strategy, this community can be executing — working with stakeholders to unlock and deliver big data solutions," says the report.

Data is used by companies to fine tune products and marketing, and by governments to plan and implement programs.