Proposed chamber building designed to make money

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Project expected to create revenue for St. Albert chamber in 20 years, keep chamber sustainable

With the needs of nine hundred members to consider, the St. Albert chamber of commerce is seeking ways to bolster its revenue-generating power and an ambitious downtown project might be the solution.

On Monday, the chamber presented city council with a plan to build a five-storey office building – complete with retail space and a parkade – in the heart of downtown. That means the chamber could one day make money from parking spots and rental space, said Mike Howes, chair of the chamber’s building committee.

“It’s like any business. We are trying to grow and expand and this is a long-term way of doing that and providing sustainability,” he said. “Now we are just taking a big leap.”

The chamber is a not-for-profit organization. It depends on money from membership fees and from events, such as the farmers’ market or trade shows and galas. Without the latter, the chamber would have to “drastically increase” membership fees or slash services and staff, said Howes.

The chamber now employs about eight full-time staff. That’s fewer staff than chambers in cities of similar size, such as Red Deer, he said. But the Red Deer chamber is also at an advantage.

That city has more businesses than St. Albert, which means more entrepreneurs joining the chamber. The Red Deer chamber can also rely on revenue from membership fees and does not need functions and events to be sustainable.

In comparison, St. Albert has fewer businesses but almost half of them are chamber members, said Howes. That means St. Albert’s chamber is one of the best attended but also in need of additional income.

The St. Albert chamber is strongly involved in advocating on provincial and federal levels, he said. Without extra revenue, “we wouldn’t be able to do all the things we do now,” he said. “And it takes a lot of people to put on a networking function, or a breakfast, and all the behind the scenes things.”

Building downtown

That’s where the building project comes in. First plans for a chamber building downtown existed years ago, said Howes. The chamber wanted to build a smaller, four or five-storey office tower then. It planned to occupy about 5,000 square feet and make money by renting out the rest.

But it soon discovered that parking would be a problem. Already, there are not enough parking stalls downtown. Most buildings have four or five stalls, and businesses struggle to provide parking to customers and staff. Plans for redeveloping the downtown ask for one or more parkades. So the chamber decided to fill the need, he said.

The proposed chamber building would sit across the street from St. Albert Place along St. Anne Street, where there is now a surface parking lot. It would have about 50,000 square feet of office, and 10,000 square feet of retail space. The parkade would hold about 550 cars. The office and retail space would be designed to hide the parking.

“The city is not going to be able to fill that with stores or shops and not replace the parking somewhere,” he said. “I think it’s just about a no-brainer that it has to be a parking lot or parking garage.”

Howes added that the chamber belongs downtown. At one time, it considered renting space from Amacon, the company planning to redevelop the former Grandin mall site. But the location was not ideal for a visitor centre, he said.

The chamber building is now located south on St. Albert Trail, by the Superstore. There, it also manages the city’s visitor information centre. But the chamber prefers to draw visitors into the city and not to its edge, he said.

“The majority of the board of directors felt the downtown location should be where the chamber should be,” he said. “And since (the downtown area redevelopment plan) is getting going … it made sense to grab a new lot.”

Project funding

The chamber proposes to lease the land from the city, ideally for $1 a year for 99 years. These leases are quite common, said Howes. The chamber now also leases a building from the city for a 99-year lease.

Howes estimated the cost of the building project around $40 million. He admitted that’s not the kind of money the chamber has lying around. It’s hoping to get other not-for-profits to commit to leasing space, and to rent out parking stalls to the city and businesses downtown.

That revenue would one day pay the mortgage from the bank. The rest of the building funds would hopefully come from city and government funding and grants, such as the capital partnership program, he said. The program aims to build more capacity in St. Albert and applicants can receive funding for one-third of a project or up to $5-million.

Howes expects it would take about 20 years before the chamber starts making money from its leases. It’s now meeting with other non-for-profits to discuss alliances and lease promises.

“We want to have some names of people that say ‘I’ll take 5,000 square feet, or 10,000 square feet,’ ” he said. “Our goal is to have that business plan and alliances in place by fall and this winter, and spend next spring finalizing the plan and by the summer of 2016 begin construction.”

The chamber has not yet shared its financial vision with the city. But Mayor Nolan Crouse said in an email to the Gazette that he will bring forward a request for an official business plan and the chamber would have to share its proposal for money flow.

Asked who would be left to pay if a project on city-owned land ever failed for payment or stopped halfway to completion, he said there are different clauses for different organizations. But organizations such as the botanic park, the Kinsmen, the minor baseball association and more “have agreements to cover financial difficulties.”

“The city would need to have in place clauses that if an organization ceased or went bankrupt that the city was protected,” he said. “For example NABI and others who are stewards of buildings have clauses to protect the city.”

The chamber will share its plans for the building with its members and the public at its lunch on March 11.

Howes said the chamber has not shared a formal document on its building proposal with all of its 900 members. But the chamber had discussed possible ideas for a building for a long time and the board approved the current proposal.

“I have not heard one person say this is a ridiculous idea,” he said. “And again, what we are proceeding with at this point is plans and seeking partners and alliances.”

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