The City of New Westminster learned that the Uptown Property Group was pulling out of the civic centre project nine day's after last fall's civic election.
Jim Lowrie, the city's director of engineering, said the Uptown Property Group notified the city of its decision to withdraw from the project on Nov. 28, 2011.
Bart Slotman, vice president of the Uptown Property Group, said the company decided to withdraw from the project "several months ago" but wouldn't specify when that took place.
"It was not before the election," he said about rumours the decision was made before the Nov. 19, 2011 civic election.
When told that some community members believe the decision was made before the 2012 municipal election, Slotman said that is "false" information and "is not correct."
Slotman said the Uptown Property Group "worked very hard" with the city to make the project work.
"In the end we made the decision not to pursue it," he said. "It was not the right decision for our company."
With the city's decision to proceed with the office tower without having a partner, some community members have voiced concern that the city is taking a big financial risk and will burden taxpayers for years to come.
"It may not be the right opportunity for us, but it may be the right opportunity for someone else," Slotman said.
Slotman didn't want to discuss details of the company's decision.
"We pulled out of the project for a number of reasons," he said. "They are all business related."
Slotman said the Uptown Property Group tries to open its office space when "demand is there" because creating new inventory at the wrong time can result in the space sitting empty. He categorized the office tower, which was dubbed Merchant Square, as being a regional office product that would appeal to tenants wanting large spaces.
"I think over time it will be successful," he said. "It's the right location for an office building. I think it will be well received by the market. The way the building is being designed really fits a certain tenant profile."
According to Slotman, the 16,000- to 20,000-square foot floor plates being offered in the office tower are well suited to institutions or large corporate use, including government tenants.
"There are a lot of them out there looking for large footplate buildings," he said. "It is much easier to be concentrated on one floor than spread out on three floors. There are efficiencies to be gained. This building caters very well to that tenant group."
The city announced in April that it would proceed with construction of the office tower component of the new civic centre on Columbia Street because the office component is integral to downtown revitalization and economic development efforts.
The Uptown Property Group had planned to build the office tower, but it later withdrew from the project.
"The city continues to receive inquiries from interested parties regarding the office tower component of the project," Lowrie said in an email to The Record. "The city has retained the firm of Avison Young to assist with marketing to prospective tenants."
Lowrie said construction of the civic centre is proceeding as planned. Contracts have recently been awarded for concrete and formwork for the main superstructure, and tenders will be closing shortly for mechanical / electrical supply and installation.
While doing research as part of its role in the project, the Uptown Property Group found Royal Engineers' maps from the 1850s showing that the area of Eighth Street below a T-intersection at Carnarvon Street was once known as Merchant Square.
"The area where the civic center sits was a public open space called Merchant Square," Slotman said.
The name seems to be sticking for the 130,000 square feet of office space being built as part of the project. A website - www.merchantsquare.ca - is promoting opportunities for eight storeys of office space above the civic centre and stating that street-front retail space to be located on the ground floor of the project is designed for a brand name restaurant and coffee shop.
In order to proceed with construction of the office tower, city council has agreed to borrow $59 million for the project. In addition to using $43 million of casino revenues to cover the entire cost of the civic centre ($35 million negotiated for a civic centre and $8 million that's been reallocated from other casino projects), the city's plan is to borrow up to $11 million from the Municipal Finance Authority for the city's costs related to the civic facility and parking structure, up to $33 million related to traditional capital programs, and up to $15 million to interim finance the costs related to development assistance compensation funding until the city receives the casino funds negotiated for the civic centre.
