Connolly buyers say they're walking away from Hamilton downtown condo market - for now
'It's sort of scared me off these projects,' says one buyer of a Connolly unit
Charles Azulay thought The Connolly condo tower was a great way to get back into his hometown housing market.
For a while, he would rent the one-bedroom unit on the 25th floor. Then eventually, his aging dad could live there. He'd be supporting downtown Hamilton, he said. And it would be attached to a church he knew well.
On July 17, The Connolly went into receivership. And Azulay isn't the only one walking away — from not just the Connolly project but the condo market as well.
"At this point now, some things have changed," he said. Instead, "I'm going to buy my dad's cottage from him. I always think that everything happens for a reason."
The Connolly was one of the most high profile projects in Hamilton's young condo market where 678 are currently under construction, and hundreds more are planned. But whether the project's failure under Stanton Renaissance will turn off potential buyers and investors like Azulay and has a deeper impact on the condo market remains to be seen.
Marvin Ryder, a McMaster University assistant professor of marketing, doesn't think it will. Glen Norton, the city's economic development director, says he doubts it, and believes the Connolly failure is not about the local market conditions.
"We do not think this will diminish people's interest in living downtown," he said. "Whether it will affect those just looking for an investment is difficult to judge. I think most people reading the media coverage realize the receivership was not caused by this project specifically."
For Azulay, when he heard of The Connolly, he was intrigued. He spoke about it with Louie Santaguida, owner of Stanton Renaissance, who seemed enthusiastic and passionate. And Azulay, who works as an actor and massage therapist, wanted to own a unit. That wasn't happening in Toronto.
He bought in January 2016, and had put down $20,000 on it by the time it went into receivership.
"I knew that church very well," he said. "I thought it was a great idea to preserve some of the city."
Gordon Green, who lives near the airport, had the same idea. He bought a one-bedroom unit on the 12th floor and planned to rent it. One day, he said, he might move into it.
He has no immediate plans to buy a downtown unit again, he said. At this point, he just wants his $50,000 back.
"It's sort of scared me off these projects," he said. He won't buy downtown again "until I see some shovels in the ground."
Still, Ryder sees The Connolly situation has having "virtually no impact" on most buyers.
In the condo market, he said, there tend to be two types. One is investors looking to flip units. The other is locals moving downtown from the suburbs. Right now, "there is no sign either group is getting skittish."
He also sees it as "very possible" a new developer will sweep in and buy the project. If people buy those, he said, Hamilton's condo market is officially fine.
The following condo projects are currently being built:
- 20-22 George St.: 230 units.
- Acclamation at 179-191 James St. N.: 71 units.
- Royal Connaught Hotel phases one and two: 231 units.
- Student residences on James Street North: 146 units.
As for The Connolly, it began in 2014 when Santaguida's company demolished two-thirds of the 1878 James Street Baptist Church. Many heritage advocates opposed that.
The church facade is still standing, but the rest sits empty. So far, its biggest accomplishment has been an appearance in the TV show The Handmaid's Tale.
There were early signs of problems. At least twice, Santaguida divisions have gone bankrupt. The City of Brantford vowed to stop doing business with him. Earlier this year, another Stanton Renaissance project, On the Go Mimico, went into receivership.
Neither Azulay nor Green knew any of this. "I thought I researched things pretty well, but I will do a little bit more digging next time," Azulay said.
Both heard in the fall that the project was delayed, and both started calling Stanton Renaissance last month. At that point, they just wanted their money back.
Green hopes someone buys the project and develops it. "It'll be a good thing for Hamilton," he said. But right now, he's not interested in buying there again.
"We're sort of relieved now," he said. "At least we can see a light at the end of the tunnel."