THUNDER BAY – Negotiations over a ground lease for the Thunder Bay Art Gallery’s new waterfront location appear to have held back construction on the project by several months.
City of Thunder Bay staff had initially said they expected a 50-year lease to be negotiated by the end of the summer of 2022, after securing city council approval in July.
Instead, the process has dragged on for eight months, pushing back construction the art gallery says it would ideally have begun in January.
The gallery said it has now signed a finalized lease and accompanying municipal capital facility agreement, which could be approved by council as soon as late April.
A building permit for the waterfront site, just south of existing development at Prince Arthur’s Landing, will not be approved by the city until the lease is signed, the gallery said.
Until that happens, the gallery said its main construction work cannot start, though it is allowed to conduct preparatory site work and pile installation.
“We had hoped to start construction in January 2023, or earlier, had the permit been in place,” said art gallery director Sharon Godwin.
The gallery announced in January it had hired Tom Jones Corporation as construction manager for the project, which has faced numerous delays since it was initiated in 2009.
Godwin has not been available for interview on the issue, but said via email the lease and municipal capital facilities agreement are both now complete, and have been signed by the gallery and delivered to the city.
That comes after city staff said as recently as last week the documents were still being finalized.
Assuming council is satisfied with the lease and authorizes city staff to sign it, council would proceed to pass a bylaw officially granting the waterfront gallery status as a municipal capital facility.
That designation under Ontario’s Municipal Act will exempt the gallery from property taxes and development charges, and enable the city to charge nominal rent.
Like many galleries across the province, the Thunder Bay Art Gallery is already exempt from those taxes in its current location at Confederation College.
Godwin said the soonest the municipal capital facility bylaw could be passed is April 24.
“Should this be the case, we expect that the building permit could be issued that week,” she said. “It is our hope that this schedule holds true.”
Despite the delay in finalizing the lease, Godwin said the city and the gallery have had a positive working relationship over the project.
“Both organizations are working through the process and the relationship that we have in a positive way while respecting the complexity of these kinds of projects and the many demands that this work adds to already busy organizations,” she said.
The 38,000-square foot gallery is a key piece of city plans to extend waterfront development south of Prince Arthur’s Landing, along with the Pool 6 cruise ship dock, a potential science centre, and an extension of the waterfront trail.
The lease is expected to carry a 50-year term, at which point it could be renewed. The property, including the building, would revert back to the city at the end of the lease.
The gallery will bear sole responsibility for maintenance of the building, and setting aside funds for long-term capital renewal.
The city’s director of development services, Joel DePeuter, was not available for an interview Thursday, but said in an emailed statement the city was continuing to examine related documents sought by council.
“The city is reviewing recently received due diligence information that was requested by council and agreed to by the gallery,” he said. “This work is done cooperatively between the gallery and the city to advance this important project.”
It is not clear what information council had requested.
While considering the municipal capital facility designation last year, councillors had questioned Godwin over the gallery’s financial viability, asking about an updated business plan and how operating losses would be handled.
The new gallery’s roughly $50 million cost has been covered 70 per cent by the federal government, with the province and city each contributing 11 per cent and the gallery looking to raise the difference itself.
The gallery is also expected to seek an increase to its $270,000 yearly operating grant from the city.
