The group behind a proposed $50-million overhaul of the Ledo Hotel in the city's downtown is anxiously hoping city council approves on Community Improvement Plan (CIP) funding in order to take the next steps.
A total of 12 applicants across five city wards have applied for Downtown, Brownfield and Town Centre CIP funding, with the Le Ledo proposal standing as the largest project of the bunch.
The Le Ledo plans have been in the works for roughly a year now and will reimagine the entire property with a 150,000-square-foot commercial development in Sudbury’s south section of the Junction district with a combination of existing uses and others allowable within the C-6 commercial zoning.
Le Ledo Inc., city planning staff and the economic development department have worked together during the application period that started in June and completed in September.
"We anticipate Le Ledo to be completed concurrent to the opening of the new Library and Art Gallery," said Chris Tammi, president of Le Ledo Inc.
“These two projects will bring a big spotlight to Sudbury for the opening at that time. The combined investment represents at least $100M in public and private funds into ‘The Junction’ of our downtown."
A purchase and sale agreement option has been put in place for Le Ledo Inc. to buy the building from current owner 502 Holdings, though the sale has not been completed at this time.
"There are some conditions to the purchase. We have the owner's approval to do some of the work that we're doing on the property, so we have the full cooperation of the existing ownership," said Greg Oldenburg, director of development and marketing with Le Ledo Inc.
"Really we're waiting for the budget decision because (we have) the business model and the business case and the investor group is waiting to see if the city is willing to back these programs and assist with the investment into the downtown and other properties."
If Oldenburg’s name is familiar, he’s the owner of the former Northern Breweries building on Lorne Street that he has been trying to develop into luxury condominiums under the name the Brewer Lofts.
Oldenburg wouldn't divulge who the members of the investor group were, but did say that there is some local investment along with investors from Southern Ontario.
The city is looking at approving more than $5 million in CIP funding and the Le Ledo group argues their project will add (on a 10-year basis) $5.5 million in new municipal tax dollars, more than $2 million in education tax and nearly $1 million for the Downtown BIA.
"Funding for the project in the grand scheme of things is already in place," said Oldenburg.
"If not for the policies that were in place and promoted by staff and approved by council, would we have brought this project forward. There's two things: one is having the library and art gallery complete, and also the CIP programs that's contributing to the confidence of the investor group."
Through the CIP structure, successful applicants will receive a return on their investment upon completion of the project through a rebate that's calculated by splitting the difference between the tax revenue generated by the property before and after the project's completion.
For example, the Ledo Hotel property currently generates $40,000 annually in municipal taxes; Le Ledo Inc. is projecting that if the project is completed, that number would jump to more than $500,000.
The Le Ledo group would receive that difference of $460,000 annually over a period of nine years.
"The city's not making any more or less than they did before with the way the policy has been written," said Oldenburg. "The new tax total on a 10-year basis is $7.1 million and the new tax from the municipal viewpoint is $5.6 million over 10 years, new tax on education is $2.2 million and the BIA it's $880,000."
Oldenburg says these values would increase on a completed project once the 2024 MPAC assessment is completed and there will be tax increases at that time.
In terms of the project vision, the 0.6-acre site that is bordered by Van Horne, Elgin and Shaughnessy will reimagine the entire property with a 150,000-square-foot commercial development in Sudbury’s south section of the Junction district with a combination of existing uses and others allowable within the C-6 commercial zoning.
The existing Ledo Hotel will be kept, repurposed and integrated into the project. The design sees a continuation of a three-storey brick and glass facade across the site with a 14-storey tower above, clad in copper (a nod to the city’s history) and glass.
While the project and investor confidence weighs heavily on the completion of the library/art gallery project across the street, the oft-debated downtown arena doesn't factor into the equation nearly as much.
"When we first started this the arena had been decided upon and was going to be on the Kingsway. We don't have any control over that process; since we first signed the purchase agreement a lot of things have happened that we don't have any control over," said Oldenburg.
"There's Project Now and council has asked for this other report; our primary goal was always that the city was spending $40 or $50 million across the street at the Sudbury Theatre Centre site and that the city has always indicated that they wanted a premium hotel and office space in the downtown and that didn't seem to be coming."
According to a press release from Le Ledo Inc., this project will be the largest private investment into Sudbury’s downtown since the City Centre (once called the Rainbow Centre and now named Elm Place) and will become the second largest contributor of municipal tax, education tax and BIA funding in the downtown.
"At $50 million, Le Ledo Inc.’s investment will complement the existing tourism, cultural, education, transit and municipal hub. This all within proximity of Science North, our Downtown Lake, Downtown Businesses, Sudbury Arena, MSoA, Theatre Centre, Place des Arts, Library and Art Gallery — this is what cities are about," said the news release.
"The efforts of private businesses cannot be understated or undermined during this time - we (as the applicants) are encouraged that CGS has these programs to create new economic drivers in all areas of the city with the Downtown, Town Centre and Brownfield properties."