City and London developer Shmuel Farhi reach deal on west-end properties


After announcing a conditional offer last April, the city has reached a deal with London developer Shmuel Farhi for the purchase of two Talbot Street properties.
City manager Wendell Graves announced the deal Wednesday morning that includes the Mickleborough building at 423 Talbot Street – the home of Ontario Works since 2000 – and a parcel of land on the south side of Talbot St., between William and Queen streets, and extending south to Centre Street.
The property includes four homes on Queen Street.

The appraised value of the Mickleborough building – located at the corner of Mary and Talbot streets and dating back to the early 1900s and designed by St. Thomas architect Neil Darrach – is $4 million. Under the deal, Farhi Holdings will donate $2.3 million in exchange for a tax receipt and the city will pay the remaining $1.7 million. 
Graves indicated the intent is to apply to Infrastructure Ontario for financing, with payments to be offset by the existing lease payments to Farhi.
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Mickleborough Building on Talbot St. in St. Thomas.

While the original intent last year was to convert some of the space into apartment units on the second and third floors, Graves said Wednesday that proposal has been abandoned.

“We did some analysis on a conversion and because of the physical composition of the building, the renovation costs just didn’t justify the apartment use,” explained Graves. 
Instead the aim is to partner with the Central Community Health Centre in hopes of consolidating their operations into the structure that once housed the British mainstay Marks and Spencer in the 1970s and Huston’s Fine Furniture into the 1990s.
“They (CCHC) want to use as much of the existing office space as possible, but because they are going to need clinical space there will be some renovation,” said Graves.
Early in the negotiations for the Mickleborough Building, Farhi had indicated he would contribute financially and encouraged the city to consider naming the structure after his late father.
Graves advised that possibility may still be on the table.
“We certainly appreciate the dialogue we have had with Mr. Farhi on both sites. It’s not part of the deal, there is nothing locked down but we’re going to have regard for that as we move forward. Nothing is locked down at this point.”
Farhi said Wednesday he is happy the deal for the two properties has been consummated.
“My father loved St. Thomas and we are happy to provide this $2.3 million gift to the citizens of St. Thomas. And to save this heritage building for generations to come. I hope they will name the building after my father. I discussed it with them. It’s not every day someone comes to them and gives them $2.3 million. I hope the mayor and the city politicians will see that it is the right thing to do.”
The city will pay $1.4 million for the second property at 230 Talbot Street, with Farhi Holdings donating $400,000 back.
The site is being considered for a community social services hub and would house the offices of Ontario Works.  The land – once pitched by Farhi to Elgin St. Thomas Public Health as a possible new home – might also be considered for phased-in affordable housing units.
Graves is confident any environmental concerns about the former railway lands can be addressed.
“We have done due diligence over and above so we know exactly what we are facing. In our approved city budget this year we have funds allocated there to begin some cleanup. Because we are looking to use pieces of that site for residential, under the Ministry of the Environment regs, that is the highest order of cleanup that will be required.”
QueenstreethomesjpgDemolition of the four existing houses on Queen Street will proceed at some time in the future, confirmed Graves.
“Ultimately it will be a brand new block when we get done.” 
Graves indicated dialogue is now underway with architects for drawings of the new social service site.
“We will continue to meet with them, but you can appreciate by the time we finalize that and get everything in order and get drawings done then tender and actual construction . . . we’re really looking at a two-year period for all of that to fall into play.” 
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