[SteelTown]

City pulls back loans on delayed downtown projects

April 15, 2008
By Nicole MacIntyre

HAMILTON - The city is pulling back $10 million in loans for downtown projects that have been axed or postponed.

The largest is the planned renovation of the former federal building at Main and Caroline.

The city committed $4 million from its downtown residential loan program in 2004 to turn the vacant building into condos.

Owner Darko Vranich still plans to develop the property, but wants to focus on his neighbouring hotel project at the old HMP site first, said Gord Moodie, co-ordinator of downtown municipal incentives “It will still happen... We’ll get it done.”

The city has been working to find a tenant for the bottom floor, but a pitch for a sporting store failed.

Vranich couldn’t be reached for comment.

Councillor Bob Bratina said he’s disappointed the project isn’t advancing but understands why. “The stars have to be aligned for a large project like this to go ahead.”

The city recently asked developers with outstanding loans if they plan to start construction this year. Money isn’t handed out until a project is 60 per cent done.

A handful of projects were cancelled because of costs or the property was sold, such as planned condos on King William Street at Jarvis. A $2.7-million loan to help turn Premier Fitness on York Boulevard into condos was cancelled because the property is for sale. The city wants the loan commitments cancelled so it can offer $10 million to new projects in June.

City council has approved $37 million in loans to date.

Only $10 million has been loaned, and half the money has already been paid back.

For every dollar the program costs the city in interest, it generates $100 in construction.