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This article was published 28/5/2015 (786 days ago), so information in it may no longer be current.
The St. Regis Hotel on Smith Street will be demolished to make way for an eight-storey parkade and commercial complex under the terms of a deal unveiled Wednesday by the city's downtown development agency.
CentreVenture, which acquired the St. Regis property in 2013 with the intention of finding someone to redevelop it, said a numbered company controlled by Fortress Real Developments Inc. of Toronto has bought the hotel and a nearby parking lot on Smith Street for $4 million.
The development agreement calls for Fortress to demolish the hotel and begin construction of the new complex by no later than April 30, 2017.
A small parking lot fronting onto Garry Street, which CentreVenture acquired as part of the St. Regis deal, also has been sold to a company that owns the Pint Public House and Sports Bar on Garry Street. Venexo Corporation will pay $650,000 for that property, CentreVenture said.
CentreVenture CEO Angela Mathieson said the local firm that leases the St. Regis property and runs the hotel will continue to do so until Fortress is ready to proceed with its project.
Fortress CEO Jawad Rathore said a start date has not yet been determined. He also said they don't have a final estimate for how much it will cost to built the parkade and commercial complex.
"But it's going to be a multimillion-dollar project," he added.
Fortress is also the developer behind the proposed 47-storey, $188-million SkyCity Centre condominium tower to be built on the south side of Graham Avenue south of the St. Regis property.
Rathore said the plan all along was to purchase both the Graham Avenue and St. Regis properties, and to develop something on the St. Regis site that would complement the SkyCity Centre project as well as CentreVenture's plans for the downtown's sports, hospitality and entertainment district.
Plans for the SkyCity Centre project also include five floors of parking.
Rathore said there are no plans to change that.
Hal Kersey, senior project manager for Fortress, said the current plans for the St. Regis property call for a building of up to eight storeys that would include about 25,000 square feet of retail space on the main floor, five floors of parking above that, and up to two floors -- about 50,000 square feet -- of office space above that.
But if demand warrants, more floors of office or retail space could be added, Rathore added.
To facilitate the St. Regis deal, CentreVenture granted Fortress a short-term, first mortgage for $3 million through its Urban Development Bank. Mathieson said Fortress has until April 30, 2017 to repay the mortgage. If it fails to repay the mortgage and begin construction by that date, the property reverts back to CentreVenture.
At that point, the corporation would likely issue a new request for expressions of interest from other developers, she added.
Three other proposals submitted during two earlier EIOs for the St. Regis properties were rejected either because the price wasn't right or the proposed use was unsuitable.
CentreVenture paid $7.7 million to acquire the St. Regis property. With the sale of the properties and a $2.8-million grant from the province, its net investment in the acquisition and redevelopment of the St. Regis properties is $250,000, Mathieson said.
"But keep in mind that through the mortgage we'll be receiving interest income," she added. "So it will be very close to break-even."