[SteelTown]

Is Lister Block project getting too pricey for mayor, LIUNA?

Andrew Dreschel
The Hamilton Spectator
(Dec 17, 2007)

Six months after Premier Dalton McGuinty came to town with a $7-million commitment to help redevelop the deserted Lister Block building, a giant question mark hangs over the project's future.

The developers now say it's going to cost several million dollars more than expected to renovate the mouldering downtown landmark at King William and James streets.

And Hamilton Mayor Fred Eisenberger says that's "problematic" if it means the city, the anchoring tenant, would have to pay a higher leasing rate.

"From where I sit now, not knowing what the numbers are but with some sense that they may come in higher than previously anticipated, I think it's going to make it very difficult for me and others to support it," Eisenberger said.

The developers, Labourers' International Union of North America (LIUNA) and Hi-Rise Group, say their studies show that renovating the Lister instead of tearing down and replicating it is driving the increased costs.

"After doing the analysis, we have construction costs which are in the $23-million to $25-million range," said Joe Mancinelli, LIUNA vice-president.

He says the group of stakeholders who came together to find a solution, after the province intervened to stop the demolition of the 1886 heritage site, expected renovation to range from $18 million to $20 million.

Mancinelli didn't have figures showing how the new estimate will affect leasing rates for the city, but he agrees the increase may be hard to deal with.

"The next step is to sit down with the city and say, 'OK, how far apart are we? How can we fix this?'"

Under the conditions of the provincial grant, the city needs to enter into a lease before March 15 in order to collect the $7 million.

The provincial money buoyed hopes that the long-running Lister saga had finally reached a happy ending.

It was supposed to subsidize moving a city department into the restored building, which would ease the cost to local taxpayers.

Until now, the city was looking at paying an average premium of $24 per square foot.

But Mancinelli points out that figure was based on building a new Lister, not renovating the existing six-storey building at James and King William.

He says the new, higher cost is based on reviews by an independent contractor, architects, and special consultants.

The developers met with Eisenberger and city officials a couple of weeks ago for preliminary discussions.

City manager Glen Peace says once he gets confirmation of the updated numbers, which are expected to arrive within a week, the city will do its own cost estimate on the impact and prepare a report for council.

Eisenberger says the province has also agreed to pay for an outside review to see if the increases are justified.

"Everybody wants the project to go forward, but it has to be reasonable and fair," he said.

Council will also have to wrestle with extending the life of the lease from the 15 years as originally proposed to 20 years.

The 20-year lease is also part of the provincial conditions. Eisenberger doesn't expect that to be a deal-breaker because everyone already knows it's in play.

But, "Significant increases or changes in cost are going to make it very difficult to accept the arrangement as previously identified."

Still, Eisenberger isn't ready to throw in the towel.

"I'm not prepared to characterize it as being in trouble at this point, but I think once we have the numbers ... we'll be in a better position in January or February to make an assessment on whether or not there's a move forward."

It will be a huge blow to downtown revitalization if the project goes off the rails.

Besides cleaning up a jarring eyesore in the core, reviving the 1920s Lister is widely seen as a physical and symbolic catalyst for overall downtown renewal, including a proposed second phase that was widely expected to give Mohawk College a high-profile presence in the downtown by moving its music program into the Lister Block.

Mancinelli says he's far from giving up hope.

But once the city has the numbers to work with, the ball will be in its court.

"We really can't have this dance much longer.

"We need to nail this down and start working. The longer we wait, the more expensive this project is going to get."