When the Muskoka Animation Studio (MASH) set up shop in the Waterloo Summit Centre for the Environment in 2013, there was hope that it would lead to local tech jobs and perhaps boost Huntsville’s attractiveness as a home for other technology companies. But with the departure of the studio last fall, that optimism may have been short-sighted.
With almost a year left in their lease, the company quietly pulled the plug at the end of October 2015. Their lease agreement with the Town required them to pay the remaining 11 months of their lease, a total of $38,599.33, but in an agreement worked out between staff and the company, they will instead make a two-month payment representing a “reasonable notice period.” The Town will receive $7108.06, about $31,580 less than if the company had fulfilled their lease obligations.
MASH’s owners cited several challenges, including housing for staff, transportation and the project based nature of their business, as contributing factors in their departure but indicated they’d be interested in returning to Huntsville in the future. The studio’s parent company still maintains operations in Toronto.
The Town’s Community Development Manager, Scott Ovell, said they took those challenges into account, as well as the perception other companies might have about how the negotiations were handled. “We would have preferred that they give us more notice. If they do (return to Huntsville) they will need to have a better plan for hiring local and how to be successful here. (This agreement) was sending the right message to that sector that we aren’t going to try to scratch every penny out of them.”
Mayor Scott Aitchison called the deal a good compromise.
Trying to get more would be like getting blood from a stone. We would spend more on lawyers.
Mayor Scott Aitchison
A report presented to General Committee by staff indicated that the unpaid lease amount was not included as revenue in the 2016 Municipal Budget.
The space occupied by the animation studio is still vacant, although Ovell said that there is a group interested in it.
“The difficulty with that space is that it was originally designed as a wet lab. (MASH) had to do extensive leasehold improvements to get it to where they were happy with it. Outside of that sector, it’s difficult to rent the space. For the group we are working with right now, it’s almost more beneficial to them to have it as a blank canvas.” He added that the Town wants to fill the space and “won’t say no to anyone.”
In a conversation with Doppler, Ovell said that they’ve been working with the prospective lessees since late November, and that the group may bring multiple tenants to the table. He expects a proposal to be presented to Council in April.
Doppler readers, do you think the Town made the right call in negotiating a settlement versus persuing legal action to recoup the remaining value of the lease?
Hi Rob, The rooms are used for two months in the summer by Waterloo students, and I believe (but would have to clarify) that for the rest of the year they are available for use to any groups who want to book conference space in the building but not for general use only as accommodations. You raise a valid point
What is happening to all the single-residence rooms? Are there any environmental students using them? Why not use them as youth hostels? We have a shoulder season just underway, with our best season right on its heels. Let’s bring some revenue to the area; as well as advertising all its benefits.
Lake of Bays township keeps saying that they need more office space, can’t find room to do the jobs they need to do in the cramped confines of their office built in 1996/97.
Since a lot of their staff come from out of the township (read Huntsville area) maybe they could rent this building and do most of their routine work there? It is just about as close to much of Lake of Bays Township as Dwight is anyway and with their fancy high speed fiber internet (that the rest of their township just dream about) they could split their staff to both locations and still keep things relatively organized.
Most Lake of Bays residents have to go to Huntsville at least weekly anyway as services and supplies are not available anywhere closer so the errand to “drop in to the township office” could be accomplished there as easily as in Dwight for many.
Lake of Bays gets a much nicer building, living wall and all for less than the cost of adding to an existing building in Dwight. Maybe they could do like a car lease with a sort of “rent to buy” deal and in 20 years they’d own the building.
Oh yes, Huntsville could be nice and waive the municipal taxes on the building since it is just another municipality that would be using it.
Negotiating a settlement not in the town’s favour again? $31,580 less than the lease agreement does not sound like good business to me, but I don’t have a big purse filled with public funds, so that makes a difference. Further, one wonders how many contacts have been made, how made avenues have been followed, how much effort has been expended to rent out this extraordinary facility located in a picturesque setting in the heart of amazing Muskoka? Let’s sell the building or rent to anyone interested does not sound like astute business practice to me. But then again, I’m only a little taxpayer and single voter. What would I know?
The outstanding balance amounts to roughly 40 hours of legal costs….which, divided by 2 equals 20 hours of legal beagles for each side……or 2.5 days for each side to prepare and argue the case / reach a mutual agreement…Who are you kidding!!!! Add to the fact that the loser pays the shot for both sides and it rapidly becomes a no brainer. We just finished a quarter million settling up over some blackbirds, hard on the discovery 2 years ago that the Town was short 2.5 million over this same building.
Get the ads running, Mayor Scott…”Location, location, location…replete with green living wall…nestled in picturesque granite backdrp…many uses…”
Sell it off!