Citing rising costs, Burk's Falls town council has made the difficult decision to cancel a project that was originally designed to serve as a new cultural and commercial hub for the Village in addition to creating jobs.
Council has voted unanimously to cancel the downtown KCU Building project after original cost estimates skyrocketed from $1.7 million to $2.6 million.
The project had been in the works since 2018 when the Kawartha Credit Union (KCU) moved its branch across the road on Ontario Street and donated its former home, but not the land, to the municipality with the goal that the Village would use it to pursue an economic benefit. The municipality accepted the offer.
However, it tore down the building because it was cheaper to erect a new one rather than renovate the former KCU in order to meet the anticipated needs.
Staff under the previous town council began applying for federal and provincial grants to put up the $1.7 million structure with the municipality covering one-tenth of the cost at $170,000. The original proposal called for a two-storey, 5,000 square foot facility.
A brewery located at the rear of the building was to be the year-round anchor tenant while the front was to be outfitted with stalls artisans would rent from the municipality and sell their products.
Last year, former Mayor Cathy Still said the type of goods to be sold at the stalls included artwork, woodworking, various locally-grown food products from area farmers, preserves, baked goods, and maple syrup.
Still added one goal of the KCU Building was to encourage new business startups and thereby create new jobs.
She also said there was interest to create a dance or exercise studio on the second floor. The original proposal also called for a commercial kitchen to be built in the facility so it could serve as an event space.
Both the federal and provincial governments approved the grant applications.
At the time it was former Parry Sound-Muskoka MPP Norm Miller who referred to the Burk's Falls project as one that would create a new cultural and commercial hub for the community when he announced the province's share of $877,000 under the Northern Ontario Heritage Fund Corporation (NOHFC).
Mitchell Jensen Architects of North Bay was hired to create the original design but as the project moved forward the cost estimates jumped 53 per cent.
In a news release, the Village says this increase forced the “architects to dramatically change the original concept”. The new design resulted in the removal of the year-round anchor tenant meaning lost revenue for the municipality. That loss also meant the municipality would have to “run the facility at a forecasted loss”.
The municipality said the project hit another snag when the federal government pulled its funding because of delays in the project.
Staff said although the federal government worked well with the municipality, the Village “just couldn't meet their deadline for the funding to be completely spent.”
Losing the federal funds plus delays with the project and seeing construction estimates soar, forced town council to review the project in depth.
Council concluded that the combination of “rising costs versus hoped-for benefits didn't present a good investment of ratepayer funds in the long run.”
“Council weighed this decision very carefully but, in the end, could not justify spending public money on a retail project when we have so many other healthcare and infrastructure challenges,” said new mayor Chris Hope.
“Our job is to attract and promote private development and that is where the council will focus (its) effort.”
Deputy Mayor John Wilson agreed adding, “There are several projects coming in the next five years that will require millions of dollars to plan and execute, allowing for industrial, commercial, and housing growth in our community.”
“The funds set aside for the KCU Project can instead be invested in these areas to support more growth in Burk's Falls,” Wilson said further.
Because the KCU Building was a work in progress, some of the federal and provincial grant dollars were spent on various services involving the project before it was cancelled.
In the case of the provincial grant, not all the money was advanced upfront and the cancellation means no further funds coming from the NOHFC for this project.
The municipality also spent $52,000 of the $170,000 it allocated for the KCU Building before the plug was pulled.
Despite the setback, the new council says it will continue to work on “new development ideas for (the) downtown and attracting private developers to invest in the growing community.”
With the project no longer a go, the municipality cancelled the Memorandum of Understanding it had with the Kawartha Credit Union. However, the town has asked the KCU Board to let the municipality know if it intends to do anything with the land.
Rocco Frangione is a Local Journalism Initiative reporter who works out of the North Bay Nugget. The Local Journalism Initiative is funded by the Government of Canada.