Tuesday, July 17, 2007

Brewery prepard to fund Roundhouse rail museum - Toronto Star

Brewery prepared to fund Roundhouse rail museum
Steam Whistle's $10 million proposal brushes up against plan for Leon's store
July 17, 2007
Dana Flavelle
Jen Gerson
staff reporters

The fight over Toronto's historic Roundhouse is far from over, according to the building's only commercial tenant and at least one Toronto city councillor.

Steam Whistle Brewing, which already occupies roughly a third of the building, said yesterday it's willing to put $10 million toward the cost of converting the rest of the city-owned Roundhouse to a railway museum.

The brewery has the support of Toronto city councillor Adam Vaughan, who has a motion before council this week that would disrupt a private leasing firm's plans to devote part of the 80-year-old building to a Leon's furniture store.

"This has nothing to do with Leon's," Vaughan said during yesterday's city council meeting. "It's the way we handle stewardship of this historic building... It's not a good way to deal with heritage buildings, to commoditize them and hand them out as rentals."

The leasing firm, State Building Corp., says it's too late.

"A valid lease has been signed," State Building vice-president Michael Clark said in an interview yesterday. "It's a signed deal between the city and us and between us and Leon's."

The issue is expected to come to a head in the next day or two when Vaughan plans to move a motion calling for a temporary halt to State Building's plans while city staff review Steam Whistle's proposal.

Steam Whistle says its plan would see 10 of the 32 "bays" that compromise the John St. Roundhouse developed as an operating railway museum, a vision the brewer has had since first openings it doors there in 2000.

State Building, a developer of high-rise condos, subdivisions and office buildings, says its proposal with Leon's also includes a railway museum.

Clark declined to say how much money his company is prepared to spend on the project, later adding "it would be more than $10 million, considering the rent and the money spent on restoration."

Leon's has said its agreement with State gives it 40,000 square feet of space for a furniture store.

That's nearly half the building.

The dispute has a long history, dating back to the turn of the millennium when the snappy little brewery opened its doors in the then-derelict building, taking over nearly a third.

Built by CN Rail in 1929, the semi-circular building served the steam passenger locomotives at Toronto's nearby Union Station. City council declared it a National Historic Site in 1996.

But the building has remained largely vacant since then.

The brewery says it has been trying since 2002 to persuade city hall to allow it to take over the rest of the Roundhouse, with the goal of developing part of it as a railway museum. At the time, the city expressed doubts about the new brewery's ability to finance the museum, Steam Whistle's president Cam Heaps said yesterday.

In the meantime, the city accepted a plan that would have seen Headline Sports develop a Live Interactive Sport Broadcasting facility in the Roundhouse.

Heaps said yesterday that struck him as a good use of the building because it would have helped draw more tourists to the area. The Roundhouse lies in the shadow of the CN Tower, not far from the Air Canada Centre, and other major attractions.

But Headline Sports abandoned the project before it got off the ground, leaving its partners, O&Y and Tenen Developing, scrambling to find another tenant without success. About 18 months ago, State Buildings Corp. arranged with O&Y and Tenen to take over development of the Roundhouse.

Some retail consultants have suggested Heaps may have another reason for objecting to Leon's.

"It doesn't really help their business. It doesn't generate frequent, repeat visitors," said Richard Talbot, of Talbot Consultants International Inc., in Markham.

But Heaps pointed out that direct sales to Roundhouse visitors account for less than 1 per cent of his company's annual revenue. The brewery is now a successful, mature business, he said, able to help build and operate a railway museum.

Steam Whistle's revenue, which is growing 30 per cent a year, hit $17 million, he said. Most of the craft brewer's sales are though retailers in Ontario and Alberta.
Many people believe that the private sector can run many city services much more efficiently than government workers. I don't trust the private sector, because, as they've demonstrated, finding tenants to make money is more important to shareholders than preserving our heritage. I may be over-simplifying the situation, but public-private partnerships are not partnerships - they are more like a gold-digger praying on an old man with lots of money.

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