Municipality washes hands of DCC

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(Image courtesy Sarah Schofield/The Chatham Voice)

By Jenna Cocullo, Local Journalism Initiative

The Downtown Chatham Centre (DCC) is bankrupt and the municipality won’t be coming to its aid after a potential partnership with a group of Chatham-Kent investors fell through.

On Oct. 30, the DCC fell into the possession and control of BDO Canada Ltd. in accordance with the Bankruptcy and Insolvency Act. Its total assets are valued at $19.1 million.

Chatham-Kent businessmen Robb Nelson and Dan Warrener brought together a group of local investors to purchase the DCC and revitalize it into a downtown core of business professionals and retailers.

“We had conversations with the municipality to see if they would be interested in a relationship with us, but that’s no longer going forward,” Nelson said.

Malls are sitting empty across North America as the retail landscape has shifted. Nelson said they wanted the DCC to be repurposed to fit other needs, such as centralizing a main sector for all of Chatham-Kent, not just Chatham, which would have included businesses, services, agricultural amenities, and government offices.

Part of the plan was to have the municipality take on part of the building to be used as the new city hall. Tenants would take on other parts of the DCC.

“If you look at key cities across the country, all the core businesses are within four or five blocks and all the amenities are underground, and we can make a small mini-version of that here. It draws in a lot of people and a workforce. That’s what we saw for the growth and stability of Chatham-Kent,” Nelson said.

He added it could also solve some of Chatham-Kent’s residential issues. If the municipality moved into the DCC, Nelson said they could have sold the Civic Centre to be converted into housing, which would also become a source of tax revenue.

Nelson said in the end the municipality decided to let the private sector deal with the private sector and see what happens with the mall from there.

“But we had different views on the economics of both options,” he said. “We respect that fully and we’ll see what happens to the downtown mall.”

Chatham-Kent’s chief administrative officer, Don Shropshire, said he cannot comment on the discussion council had because it happened in closed session.

Agenda items dealing with acquisition of property normally go into closed session meetings to keep a buyer or sellers negotiation position confidential.

“All I can say is we got an offer from a local investor group and what we did was spend a couple of weeks clarifying the terms of what the agreement would be. And we went to closed session to see if council would want to do it and they didn’t want to.”

Shropshire said he will be suggesting to council that staff write an information report to be presented at the next open meeting to provide more details for the public.

“I think a lot of the public is curious to know what happened,” he said. “But I need that decision from council.”

The municipality will now have to decide what to do with the current Civic Centre, which is in need of serious renovations that could cost taxpayers up to $18.1 million. The HVAC system alone, the most critical component in need of repair, would cost $9 million.

Council was set to discuss the upgrades at the Oct. 19 meeting, but the agenda item was pulled hours before by Shropshire who got the call about the potential DCC investment opportunity.

Shropshire said the Civic Centre renovations will likely reappear on the agenda soon.

“I have no idea what will happen (to the DCC) now. I am really hoping someone invests in it and finds a good use for it,” Nelson said. “We had a group of us willing to take that risk knowing that the pay off would be years away. We’re business people; there’s no question that there’s got to be an economic outcome to it, but we wanted to also do the right thing for the community.”

This is not the first time that council looked into moving to the old Sears building. The previous owners approached the municipality three years ago with a similar offer, but no formal decision was rendered. Shropshire said the current Civic Centre and the Sears building were roughly the same age and the previous owners requested an “astronomically high” amount of money.

“They wanted to sell the Sears space for the same amount (of money as the Civic Centre renovations), and we would just inherit its issues and a shared space. So at the time it was not considered seriously,” Shropshire said.

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