Delays in developing the Tivoli Theatre condo project lead to loss of $3M grant

The redevelopment of the historic Tivoli Theatre has taken so long that a grant worth more than $3 million in tax deferrals has expired, says the City of Hamilton.

The ERASE grant provides tax deferrals for projects that start within 5 years

A condo development at the Tivoli Theatre has been promised for almost a decade. (Kevin Gamble/CBC)

The redevelopment of the historic Tivoli Theatre has taken so long that a grant worth more than $3 million in tax deferrals has expired, says the City of Hamilton.

The project, which is to include a 22-storey condo tower over the restored theatre, got city council approval for a $3,002,400 ERASE grant on July 8, 2016. But the city's communications department says the grant expires if construction hasn't started five years after approval, a date that passed earlier this month.

ERASE, which stands for Environmental Remediation and Site Enhancement, is a program "designed to 'erase' brownfields by providing financial incentives to clean them up and replace them with productive economic land uses," says the city's Invest in Hamilton website.

The developers of the Tivoli, Diamante Investments, say they have completed environmental work there already, but the city says that alone is not enough to qualify for the grant.

"Environmental work is not construction work," said city spokesperson Michelle Shantz on Tuesday. "This is not applicable as a start date for construction."

The owners of the long-idle theatre on James Street North recently told CBC that they need help developing the site into a condo tower and are looking for a business partner.

They also said they're still looking for a contractor to restore the theatre. Berardo Diamante said the family business will submit for site plan approval in the coming months.

When asked this week about the grant's expiry, he said Tuesday he believed the company had done enough work to remain eligible for the tax deferral.

"Basically, the development did start because we did the environmental work," he said.

However, on Thursday evening he emailed CBC to say his team was aware of the deadline and planned to apply again. 

"Our risk assessment approval took roughly two years," he said, referring to a Ministry of the Environment-required step in the process. "We wanted to ensure the ground was environmental clean before we went ahead with other aspects of the project."

In the earlier phone call, Diamante noted that the city isn't up to date on what has gone on at the site.

Not up to speed

That aspect is not in dispute, says the city's senior project manager for urban renewal, Phil Caldwell.

He said the property owner has not kept him "up to speed" on several issues, including the remediation activities that have taken place; what remediation remains to be completed for the planned redevelopment; what changes to the remediation plan from 2016 will be required (if any) as a result of the delay in the site's development (including updated cost estimates); and any changes with respect to the planned building for the site.

"Once we have that information, we can work with the property owner to identify a potential path forward to bring that updated information to city council for consideration of renewed financial assistance," Caldwell said on Tuesday.

Coun. Jason Farr, whose Ward 2 includes the theatre on James Street North, said it's hard to guess what will happen next with this long-delayed development.

"I engaged early on with this project, the proponents and the community," he said.

Declined offer to buy the building

"Here we are, years later, with only fancy drawings and a council permission to save heritage and build a building. At this point, I am reluctant to predict what they will do or how an expired application may affect them."

Supercrawl director Tim Potocic, who owns several commercial buildings near the Tivoli, says he tried to buy the theatre from the Canadian Ballet Youth Ensemble (CBYE) in 2012. He says he wanted to build a 500-person venue there, but his offer was declined.

That was two years before the ballet company's CEO Belma Diamante sold the building to her husband's development company, which owns it today.

Potocic says he was last in the building about a year and a half ago, and it "looked pretty bad. There was one complete wall section 20- to 30 feet long that had completely collapsed and was just rubble on the ground. As every year goes by, it becomes a more expensive renovation project.

"Maybe it's so far gone now that it's not doable, which (would be) a really horrible circumstance."


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