Brewer Lofts project remains a question mark, he says

Following the conclusion of the city’s 2018 budget deliberations, the Brewer Lofts project remains a question mark.

"It’s not that it wasn’t approved; it wasn’t even discussed as part of an open debate in council chambers," Greg Oldenburg, the project’s main proponent and owner of the former Northern Breweries building on Lorne Street, said. "I think there’s a certain contempt of council that, based on everything I and the 33 other applicants did for a program that represented $62 million in investment into the downtown, is looked at as being a cost centre, rather than a revenue centre."

Council voted not to fund a request Oldenburg had made for $9.5 million in grants and loans. Thirty-three other applicants had applied for a total of $2.7 million through the city’s community improvement plan program, but that was whittled down to just $600,000. Oldenburg estimated it would cost more than $20 million to revitalize the old brewery. He told The Star previously the project is 85 per cent funded, but its completion now remains in limbo.

"I’ve done everything and more that they’ve asked for," Oldenburg said. "I brought a world class architect to the city to do this project; I’ve brought financing to this project."

Oldenburg also said that between now and the end of March, $1.2 million would have been spent in the city by a group of investors with their eyes on Sudbury. That will not happen now.

"I’m beside myself and the partners are beside themselves that council didn’t even have the courtesy to even hear the business case, despite the fact it was possibly one of the poorest representations of what was state of fact," he said. "The bigger concern is that the financial markets, which had very little interest in Sudbury to begin with, are going to look at these decisions and say we can’t count on a predictable council or staff, or others within the city, to do the things they are hired to do."

To date, Oldenburg said about 25 per cent of the 50 loft spaces are spoken for. But he is not sure what happens next.

"We have a lot of options available to us," he said. "All the people who have put deposits down, either they’ve reached out and said I can’t believe what’s happened, or they haven’t reached out at all, which indicates they’re not particularly concerned their money is going anywhere or disappearing. It’s not."

Oldenburg said if he returns the deposits that have already been paid, that represents about $5.5 million.

"Based on council’s non-decision and the way the planning staff put this together, not only are we losing the opportunity to redevelop this space and see a private investment of nearly $24 million into the property – both hard and soft costs – we lose the interest of a very motivated business who was looking to operate out of northern Ontario," he added.

As he pointed out, the city would have made about $4 million over 10 years in tax revenue, about $388,000 annually (including municipal and education taxes), once the Brewer Lofts was fully occupied. Currently, the decrepit building only brings in about $9,000 in tax revenue. Oldenburg said the oversight rests with the planning staff.

"When they put together the business case, it was just about cost, there was never any suggestion in the document that the current tax base on a municipal level would multiply from $9,000 to $315,000 once the project was complete," he said.

Even more importantly, there was a beverage company from southern Ontario who wanted to set up shop in the loft, occupying the 20,000-square-feet of commercial space Oldenburg has planned for the first floor. They signed a letter of intent with Oldenburg four weeks ago and were looking to increase their distribution network by establishing a northern base in Sudbury. They were going to create 40 full-time jobs, as well as 25 part-time and seasonal jobs for university and college students.

But now, that opportunity has been lost.

"They have no interest in coming here anymore because council has indicated quite clearly they don’t want to even hear it," Oldenburg said. "Planning staff put together a business case that did not reflect in any form or fashion what I talked to them about and what the financial model for the project is. Money is looking for a calm, safe place to go."

Oldenburg said the CIP is nothing but a "make work project" for the city’s well-paid planners and he questions why council even ordered it in the first place.

"The city is just completely wasting money from those individual, private businesses and land owners – to do the very thing they’re asking them to do – and then you have a huge waste of resources at the city of Sudbury where you have three people in the planning department who’ve spent the better part of a year vetting the program, promoting the program, dealing with all the proponents, and then having it cut down to nothing doesn’t do anything for the downtown," he said.

He has requested a meeting with the mayor, Ian Wood, the city’s director of economic development, the CAO, the chief financial officer and the director of planning. He wants answers and he wants to know why council, in his opinion, violated its own downtown master plan.

"I would ask the director of economic development to step forward and say ‘I don’t know where we’re going to find $62 million in private investment in the downtown. I don’t know where we’re going to find $5 million in new tax base in the downtown’," he said.

When asked if he plans to proceed with the project, Oldenburg said "maybe, maybe not. Banks will look at these decisions as being complicated and non-helpful. Banks don’t look at investing into communities that are inconsistent with the policies they’ve put in place."

Oldenburg quotes a June 2017 CBC article.

"If her colleagues do not support True North Strong’s pitch, (Ward 11 Coun. Lynne) Reynolds said she is concerned about the type of message that could be sent to developers and residents," Oldenburg quoted. "’It says don’t dream. Don’t have a vision because city hall will kill it immediately’."

Oldenburg said the councillor was onto something.

"I don’t really look at Reynolds as being a prophet, but she was completely on point with this particular item," he said.

mkkeown@postmedia.com

Twitter: @marykkeown

705 674 5271 ext. 505235

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