With University of Waterloo pulling out of its lease, will the Town sell the building?

The Town of Huntsville said it has been notified that the University of Waterloo will be terminating their lease agreement as of August 31, 2017 – a year before its lease agreement with the Town ends – and vacating the Waterloo Summit Centre for the Environment at the end of May 2017.

The university has leased space in the building for a wet lab and storage as part of its environmental programming and had exclusive use of third floor guest rooms. Jean Andrey, Dean of the Faculty of Environment at the University of Waterloo is quoted in the release as having said, “It is unfortunate that the distance between our campus and the centre proved to be a challenge for our students but I am pleased that we will be able to continue to offer those educational opportunities in Waterloo.”

In a conversation with Doppler, the Town’s CAO, Denise Corry, said that the lease agreement with the university did allow for them to provide notice and they are still obligated to pay all fees owing to the Town for 2017. “What would be missing is any of the revenue we anticipated for 2018,” she said. “In 2017, there will not be any effect to the budget, because whether the university uses the building or not they will be obligated to pay… If we are able to utilize the rooms and can generate revenue, then we would offset what the university would owe us for those rooms.”

In the agreement signed in 2015, Waterloo’s annual lease rate was $50,974 plus HST for the wet lab and storage, plus an additional $19,600 for exclusive use of the building’s third-floor dorm rooms in May and June only, said Scott Ovell, the Town’s Community Development Officer. (The university’s original lease rate, in place from 2011-2015, was one dollar per year.) Only the Suzuki School of Music remains as a tenant, having been displaced from their rental space at the CN train station due to air quality issues.

Another former tenant of the building, the Muskoka Animation Studio, also terminated their lease early in 2016.

“It is unfortunate that the University will be leaving the campus in Huntsville,” Mayor Scott Aitchison said in the Town’s release. “With this recent announcement, the Town of Huntsville will be looking at the future use of the facility in order to find a long term solution. Finding the right fit is important to us. We want to reduce the financial cost of this building to the taxpayer while still maintaining the original intent of the facility, which is a focus on education and environmental stewardship.”

Corry confirmed that someone has come forward to express interest in purchasing the building, and another individual has said they would like to present a proposal.

“In 2015, the Town did go out for an RFP and we did receive one submission. Staff reported on the status of that proposal several times and what was advised at that time was that the proponents had indicated that they were in negotiations with an anchor tenant and those discussions are still ongoing and nothing has been finalized,” said Corry.

“The proponents who have made the submission are coming to talk to General Committee (on March 29) about their proposal and the status of it,” said Corry. “At that point, we are assuming we will get some kind of direction from committee how they would like to proceed. From a staff perspective, the building has not been declared surplus so as the CAO I am not directed to proceed with disposing of the asset because it has not been declared surplus. We anticipate we will receive some direction on how to proceed, especially since we’ve just lost our anchor tenant.”

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