New office building the latest sign of downtown Kitchener's rebirth
The six-storey Class A tower, when complete in 2020, will be steps to transit in the tech-friendly Innovation District
By JENNIFER LEWINGTON
Special to The Globe and Mail
Tuesday, December 12, 2017 Print Edition, Page B8
KITCHENER, ONT. -- A 10-minute walk is all that separates the current law offices of Gowling WLG from its future address in what will be the city's first new downtown office building in 25 years.
But even a short-distance move holds long-term implications for the law firm - and the city.
By relocating to the heart of downtown Kitchener in 2020, Gowling aims to raise its profile and capitalize on the proximity to new transit, high-rise condos and commercial property construction.
Meanwhile, Kitchener's recent rezoning approval of Perimeter Development Corp.'s 120,000square foot, six-storey, glassfronted office building at 345 King St. W. - with Gowling as the lead tenant - reinforces this mid-sized city's ambitions to turn its former industrial core into a tech-friendly downtown.
After reviewing 12 potential sites, including the option of staying put, Gowling chose a central presence in Kitchener's recently branded Innovation District that encompasses several blocks on either side of King Street West.
"As an international law firm with offices around the world and the only international firm with a presence in KitchenerWaterloo, we wanted to be at the centre of that locus [of transit and redevelopment activity]," says Bryce Kraeker, managing partner of Gowling's Waterloo region office.
With construction set for next spring, the new building is four blocks from Google's Canadian engineering offices and from the former Lang Tannery industrial space, which has been turned into a tech hub for a proliferation of startups.
For Gowling, transit explains much of the appeal of 345 King St. W. The building is steps from a new regional LRT line opening next year, three blocks from an existing Via Rail/GO Transit commuter station, and minutes from a future multi-modal transit hub (with potential mixed-use development) that would complement an Ontario government-promised highspeed rail link between Toronto and Windsor, Ont., by 2025.
With growing collaboration between Gowling's Waterloo and Toronto offices, observes Mr. Kraeker, "we needed to be within a short walking distance from the transit hub to maximize the benefits of integrating our offices at either end of the [Waterloo-Toronto] corridor."
The city's downtown is coming to life in other ways.
Over the next two-and-a-half years, private developers are expected to add 1,000 new apartments and 1,800 condo units, says Brian Bennett, manager of business development for Kitchener. In addition, he notes, an estimated 400,000square-feet of new Class A LEED Gold office space is forecast to come on stream in the next three years - compared to none in the past 25 years save for a purpose-built expansion of Google's brick-and-beam Breithaupt Block offices.
After a turn-of-the-century downturn that saw the loss of manufacturing, followed by a targeted city strategy to attract public and private reinvestment, Kitchener now projects office employment in the downtown, including the Innovation District, will rise to 18,500 by 2020, up from 11,600 in 2009.
"All roads lead back to talent," says Perimeter partner Craig Beattie, of the downtown's growing appeal as a live-workplay destination. He says prospective tenants tell him, "We need to be where the action is from a talent point of view."
As a developer, Perimeter made a long-term bet on the King Street corridor, which now forms part of the route for the new LRT.
In 2010, with Allied Properties REIT, the developer began renovating the Breithaupt Block former auto parts plant that now houses Google. Later, Perimeter purchased a 1960s-era 12-storey modernist bank tower on King Street as a high-ceiling "cool" space for young companies and, in 2016, completed a makeover of the Victorian-era Walper Hotel as upscale boutique accommodation.
Three years ago, Perimeter purchased two small properties adjacent to 345 King St. W., later submitting a winning bid to the city when it sought private-sector proposals to purchase and redevelop the former municipally owned surface parking lot. Perimeter received city rezoning approval for the site that reflects expected planning-department rule changes to encourage intensification along the main artery.
"Our intuition was always that, at some point, this market would evolve enough that there would be a market for a brand new Class A building," says Mr. Beattie. "It is all a timing thing."
The new office building, designed by Diamond Schmitt Architects to achieve LEED Gold status, incorporates several high-end features including a glass exterior on King Street, a two-storey lobby and 14-foot ceilings. The building also has ground floor retail and two levels of underground parking.
A 40,000-square-foot private terrace, not part of the original design, steps the building back at the fifth storey and became a compelling factor in Gowling's decision to lease the top two floors. "Terracing is a trend you will see more of in offices," predicts David Dow, a principal at Diamond Schmitt in charge of the project.
Perimeter's Mr. Beattie says the building's rental costs of mid-to-high $20 per square foot reflect a commitment to design.
"Our goal when we first set out was to come out with a timeless building," he says. The addition of the terrace, he adds, "will always help distinguish that building among others out there. It is future-proofing your project for the long haul."
In the meantime, other bigname firms are returning to the core.
This month, Deloitte Canada is moving its regional office from a Kitchener suburb into a refurbished former industrial warehouse, a two-storey 28,000square-foot "brick and beam" structure turned into a collaborative work space for tech-savvy employees. Like Gowling, the firm chose its new location for existing (and proposed) transit facilities two blocks away.
"We wanted to be near the transit hub," says Peter Barr, managing partner of Deloitte's Waterloo and western Ontario regional office. "The vision for our local practice as a significant national asset to our firm means that transit in and out of Toronto for our clients and our people will become very important."
One of those keeping a close watch on the renewal of King Street is former Kitchener mayor Carl Zehr, who retired in 2014 after a 17-year run that spanned the disappearance of manufacturing jobs and the introduction of a city reinvestment strategy.
In the dark days, did he ever expect to see a new office building on King Street?
"It was difficult to imagine in terms of where the economy was at that time," he says. "But it was one of those aspirational goals to have new construction.
... It has been a long time since there was any purpose-built office towers."
From Perimeter Development's nearly completed building at 345 King St. W. in Kitchener, Ont., partner Craig Beattie has a good view of the parking lot where the company's new six-storey office will be built. Both properties are located near the city's soon-to-open LRT Line.
GLENN LOWSON/THE GLOBE AND MAIL
1. The Breithaupt Block, Google, 25 Breithaupt St.
2. Multi-modal hub (proposed), 510-520 King St. W.
3. VIA Rail/GO Transit (existing) 126 Weber St. W.
4. 1 Victoria condo, 1 Victoria St. S.
5. Perimeter Development's purpose-built office, 345 King St. W.
6-7. City Centre Condominiums and City Centre Phase II, 55-85 Duke St. W./31 Young St.
8. Charlies West condo, 24 Gaukel St. (construction expected 2018). 9, with
11-12. The Tannery and Communitech hub, 113-151 Charles St. W./3-44 Francis St. S./170-188 Joseph St. 10. Deloitte Canada, 195 Joseph St.
13. 100 Victoria condo, 100-118 Victoria St. S. (under construction).