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Picton Street site started core boom
Picton Street site started core boom
Thu, August 28, 2008
It's the building that started it all.
The stately, 131-unit apartment tower downtown at 22 Picton St. was the first one built after the city made attracting residents to downtown London a priority.
"That is a very important building for us," says Adam Carapella, vice-president of Tricar Group, which built the tower.
"We really took a leap of faith and it has been a catalyst for the downtown. It showed that we have confidence downtown."
In the late 1990s, the city offered programs to attract more downtown residential buildings, namely waiving development fees and offering a tax break to developers building homes downtown.
"We really benefited from those incentives," says Carapella.
It's been a win for the city, too. The downtown now has five major apartment and condominium projects and a host of other smaller residences either recently built or under construction.
"It (Tricar) was the first to take advantage of what the city was offering. It was a very important first step," says Vic Cote, the city's manager of finance who worked with Tricar on the Picton Place project.
"They had an excellent site on the edge of downtown and I think they benefited considerably."
Picton Place opened in October 2000. The site also features four rented townhouses along Queens Avenue.
"At that time we had a hard time attracting residential development to the downtown and we came up with this program. They responded by assembling the property and it is a great location. It has access to everything, but it feels like you are away," Cote says.
The apartment tower was an immediate hit and has seldom had a vacancy, Carapella says.
"It's because we offered top-quality finishes and it also pushed the envelope of the $1,000-a-month rental barrier," he says. "It is one of the first high-end buildings downtown and it is also an ideal location. It feels off the beaten track, but it is still close to everything."
The treed, quiet neighbourhood offers an almost "park-like setting well away from traffic," he adds.
The apartments now rent for about $1,200 for a two-bedroom unit that is about 1,200 square feet. A two-bedroom with a den is about $1,400 and a penthouse of 1,800 square feet is about $2,000.
The building also features a common room and exercise area.
By the time the tax incentives are over and it begins paying full property taxes, Tricar will have had about $1 million sent back to its coffers, Cote says.
"We are rewarding investment. We are rewarding the increase in value of the property and the investment in the downtown," he says.
The tax break is a complex formula by which the city remits 80 per cent of the difference between the tax paid on the initial value of the property and what the value is after the tower was built in the first year of the program.
If the lot was valued at $50,000 in property tax when it was first purchased, and $250,000 with the tower on it, Tricar got 80 per cent of $200,000 in the first year of the program. That reimbursement dwindles every year over 10 years.
Tricar will start paying the full property tax amount of $250,000 in about two years.
Tricar has also built a luxury condominium on Pall Mall -- which is sold out -- and the Renaissance Towers, the 600-unit apartments on the former Ridout Tavern site, slated to open in the spring of 2009.
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