Friday, January 4, 2013

Floating Trial Balloons (and Savings Bonds)

As the debate rages on about the imminent gap-toothing of the Gore Park Streetwall, and the ongoing destruction of Heritage buildings, here’s a good idea:

The most frequent criticism made of the ‘usual suspects’ is that when buildings are threatened with demolition, the alarm is always raised by people who ‘don’t have any skin in the game.’
Besides the absurdity of levelling that accusation to people who own and have restored downtown properties, it’s as if the implication is that unless you have enough money to purchase a commercial building, you aren’t entitled to an opinion regarding what our city’s built environment should look like.
It’s a bit of a hearkening back to the ‘good old days’ before universal suffrage, where only land-owners were entitled to vote.

Such problematic implications aside, the point can be made that if some of what Mr. Dreschel refers to as the chattering classes were to put up a sizable sum, it would do quite a bit to silence this criticism.

More importantly, though, it would also give those of us who are passionate about the downtown considerably more say in what happens to the buildings we own, or have invested in.

The trouble is, that buying a building downtown can be a little pricey. Not a whole lot of the people demanding the preservation of our architectural heritage have the wherewithal to purchase a threatened building outright, a la Nature Conservancy Canada.

At least not separately, they don’t.

Enter my good friends Emma and Graham Cubbitt and their merry band of Mustard Seed Co-Op Grocery store planners, and their ‘community investment’ idea.

When the Mustard Seed’s initial Founding Member drive was being planned, it was obvious that membership fees alone would not be sufficient to supply the capital needed to secure a downtown location, make the leaseholder improvements needed, and purchase the stock required for opening day.

So they hit upon the idea of promissory notes issued by their corporation, where individuals who didn’t have enough money to open a grocery store on their own, could invest in the co-op above and beyond their membership fee, at a competitive rate of interest. Thus appealing to both investors’ sense of community, and their need to invest in ways that respected their financial plans.

So here’s the idea. Why not float a ‘Heritage Preservation Bond’ in Hamilton so that those who are passionate about preserving Hamilton’s architectural heritage can invest at a competitive rate of interest payable upon the bond’s maturity. They can also do so knowing that once sufficient funds have been built up, threatened buildings will be purchased in much the same way Nature Conservancy purchases environmentally sensitive land from private landowners.

Those buildings could then be developed in an appropriate way, and leased out to small businesses and start-ups which would pay the rent needed to ensure the money was available to repay the bonds upon maturity.

Done properly, such bonds could not only appeal to investors looking to make a difference in the face of Downtown, but could make their way into ethical investment portfolios, broadening the reach, and awareness of Hamilton’s Downtown Revitalization efforts.
“That’s ridiculous!  It would never work.  Nobody would invest, and we could never raise enough money.”
Except that it has already been done.
In 1972, Grant Head, when faced with the imminent destruction of Sandyford Place, created Heritage Hamilton Ltd, as a for-profit corporation with the goal of raising enough money by selling $100 shares, to purchase the properties associated with Sandyford.
The catch?  The developer gave them 30 days to raise the funds.  And he wanted $250,000.  No small amount in the early 70s.
In the end, through assuming part of the mortgage, and selling shares to everyone from Hamilton’s monied elite, to average folks with a love of history, they raised a quarter of a million dollars in slightly less than one month.
And while in the end, the developer reneged on his word to sell the property, the heat, and sound, and light generated by the campaign led in part to heritage conservation laws being passed in Ontario, which resulted in the Heritage Designations we know and love today.
As a result, Sandyford, the first property in Hamilton designated under the act, is still standing.
So who’s to say that a well-timed, highly public ultimatum to a developer with a hot-to-trot demolition permit might not also raise the required money in an equally remarkable period of time.
That way, maybe we could be spared for a while from both the short-sighted criticism of Hamilton’s business elite, and the even more objectionable sound of wrecking balls.

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