Innovative Edmonton developer John Day, on the eve of his latest and biggest re-development ever, sat down with me last Tuesday (June 18), to talk about his development projects, development philosophy and sense of community..
The new project is the 23-story officer tower, only the second to be built in the city since 1990, in the heart of the downtown on the site of the burned-down Kelly Ramsey Building (actually two separate buildings stuck together, with adjoining hallways) in Rice-Howard Way. The details of that project, a unique combination of historic and ultra-modern architecture, were recorded in my Hicks on Biz column for the Edmonton Sun of June 22, 2013 and the Sun online.
As a law school undergraduate during the time when historic Edmonton was being razed to make way for the downtown building boom of the late '70s through early '80s, John admits he didn't really notice the disappearance of the city's ornate past.
"It was more the demolition I was seeing as a young lawyer during the bust of the mid-'80s," he says. "Swaths of old buildings downtown were demolished only because there were no tenants, rents and taxes couldn't be paid. I was thinking how unfortunate all this was, how the downtown became gap-toothed, how Jasper Avenue was no longer Jasper Avenue."
Day backed into the re-development game. He had bought three commercial properties in Old Strathcona from the Bleviss family simply because he liked the locations - the Dominion Hotel, the original South-Side Hub Cigar and Uncle Albert's Restaurant at 104th Street and Jasper, when Uncle Albert's burned to the ground. "It was a shock. Fortunately nobody was hurt."
So he had to re-develop the property. And with a new building came the requirement of underground parking - an expensive proposition. "It was a challenge. It's a small property. I knew we'd have to generate revenue from a second and third floor in a neighbourhood where all the retail was storefront. We worked closely with the Old Strathcona Foundation, with Shirley Lowe and I had a good architect in Donna Clare. We wanted to build something that would fit with the area. And with such a visible location, everybody would know if I did a bad job.
The result was a new building that looked old, was far more compatible with the neighbourhood than the original Uncle Albert's, and still was a viable business proposition. Day continues to own the property. "It's good, steady income-producing real estate in a good location," he says. "I like good locations."
It should be noted that Day usually has partners in each venture. "I've always enjoyed, as a lawyer, in the hotel and ski business, in real estate, working with other people. Others push you, challenge you, respectfully disagree with you."
Next came the redevelopment of the Cecil Hotel property on the north-west corner of 104th Street and Jasper Avenue downtown. "I liked the location. On a corner on Jasper Avenue, with a nearby park, I liked what the city was doing with the streetscape of 104 Street. We assembled the land, and Sobey's signed on as the main floor tenant. Sobey's took the risk of opening an urban, downtown grocery store. I thought they'd want the underground parking, but they foresaw the foot traffic coming from all the new nearby condo towers.
"The architect Joe Tkalcyk and I wanted the building to be modern, yet with historic appeal. It honours the Birks Building across the street, as if the two were somehow built together. It was Joe's idea to build the small overhang over the 104 Street sidewalk of the second and third floors.It was architectually interesting. It made the second and third floors bigger. I thought it would never be approved by the Edmonton Design Committee, but they liked it. A life insurance company uses the second floor overhang as a boardroom."
The Cecil redevelopment is one of the few buildings Day has sold, just last year. "The building had worked out. But we were doing other things. We needed the money."
Day admits to some sentimentality in the Garneau Theatre redevelopment project on 109th Street. "I grew up in the neighbourhood. We cleaned up and refurbished the theatre itself. The front part was actually originally built as a separate building. We tore that down and added a new 5,000 square foot front piece. We wanted to build a second story, but the community didn't support that idea. There are good shops in there - Transcend, La Poutine, the cupcake place and the Japanese restaurant. We were happy to make a deal with Metro Cinema (a non-profit film society) for the theatre itself. It worked out. We made something interesting. It's doing okay."
Re-developing downtown and South Side properties is not about maximizing profits, says Day. "You need a bit of brain damage to be doing this," he says wryly. "There are way more effective ways to make way more money. But good real estate in good locations usually provides a long-term reasonable rate of return. I like good locations.
The new tower on Rice Howard Way is far and away the biggest re-development Day has taken on, even if his partner is an unnamed institutional investor like an insurance company or pension fund.
But Day will keep his eyes and ears open for other interesting re-development opportunities. "It's a relatively small community," he says. "If a suitable real estate deal comes along, I'll know about it."
But it'll be in Edmonton or Jasper, where Day's other business interests reside. "I've always been happy to have stuck with what I know, where I live, what I understand."
John's sense of community also extends to Grant MacEwan University, where he currently serves as volunteer university board chair.Rant
Day's interest in classy, community-focused business has been a great service to the Jasper townsite in the northern end of the Rockies, three hours out of Edmonton.
His father, with seven other mostly Edmonton doctors, invested in building a hotel, the Lobstick, in Jasper in the '60s. Then the Mountain Park Lodges bought the Amethyst Lodge. Not much else happened until second-generation John was asked to be managing partner of the group. "There wasn't much future for the families if we didn't grow. With the second generation, there's about 49 owners!"
Under Day's leadership, Mountain Park Lodges has been on the acquisition trail in Jasper, buying Marmot Lodge, Chateau Jasper, Pocahontas Cabins and the Pyramid Lake Lodge.
In 2001, Day assembled the consortium composed of Mountain Park Lodges, Sunshine Village ski resort and other Jasper hoteliers that purchased Jasper's Marmot Basin ski resort from its original owners, and have since re-invested $27 million into the ski area. "It's a strong group," says John, "unafraid of making changes."
The numbers today are way better, says Day. "With snow-making equipment, we opened May 9, and won't close until May. Before, it was nip and tuck until Christmas."
Good enough numbers, in fact, for the Marmot Basin consortium to purchase the Jasper Tramway last last year.
Long-term Jasper observers credit the level-headed likes of Day and other independent, quality-minded business people for keeping Jasper free of the international corporate business world that has made Banff a very different kind of mountain tourism town.
And may Jasper maintain its unique, non-corporate friendly character forever!