Feds deny cash for new Mill Market. City hit up for $1.4 million

Just six weeks after our over-budget downtown plaza got final construction approval, the city's share of expenses for the closely related Mill Market relocation is similarly spinning out of control.

City councillors will be told Monday that a new injection of up to $1.4 million in municipal funds is needed after a critical federal grant application was recently denied.

That's even more than the controversial $1.3 million budget overrun on the adjacent plaza, which councillors finally agreed to pay using unallocated cash from the Canada Community Building Fund.

"The Mill Market has learned that their application to the Infrastructure Canada Green and Inclusive Community Building Program for $1,750,000 was not successful," says Tom Vair, the city's deputy chief administrative officer for community development and enterprise services.

Two years ago, City Council voted to spend $385,000 to buy 73 Brock St. after Roger Brooks International, a U.S.-based consultant retained by the city and Downtown Association, recommended the downtown plaza be "joined at the hip" to a public market.

The idea was to move the Mill Market there from the converted fish hatchery at 35 Canal Drive that has housed it for eight years.

So far, an Ontario Ministry of Agriculture, Food and Rural Affairs contribution of $250,000 has been secured, plus an additional $40,000 from Mill Market reserve funds.

That's nowhere near enough to cover the estimated total project cost of $3.2 million.

Mill Market and city staff now want to split the project into two phases.

"The first phase is proposed to see building renovations and leasehold improvements completed that will provide an attractive and functional new market space," Vair says in a report to Mayor Provenzano and councillors. 

"The second phase will be contingent on funding applications, and will include amenities such as the commercial kitchen and completion of the mezzanine space in the building (including elevator)."

Vair says Mill Market will continue chasing funding opportunities for both phases of the project.

If no additional money can be raised, Mill Market is prepared to pay back $410,000 in leasehold improvements over 25 years, provided the city advances the money now from its own funds.

"The Mill Market will be able to cover these costs through proposed rental revenue from the mobile retail units (in collaboration with the city), and costs savings achieved in the new location including the elimination of snowplowing and septic tank pump-out fees, Vair says.

On Monday, he'll ask city council to authorize issuing a tender for renovations and leasehold improvements at 73 Brock St., and a city commitment of as much as $1.4 million toward the project.

The $1.4 million would come from existing city accounts such as an asset management reserve and the community development find and would not affect the levy, 

"Having a financing plan in place to backstop the project is required should the project come in on budget," Vair says. 

"As always, council will have a decision point to award the tender in the future. The immediate goal is to enable the tender to be released and the project to proceed to the next stage."

"The relocation of the Mill Market is seen as an important component of the downtown revitalization strategy. The building at 73 Brock Street was purchased with the intent of relocating the market as this site creates a number of positive synergies with the downtown plaza, mobile retail units and future events and programming."

"In addition, the current Mill Market facility was never intentioned to be a permanent home for the market. The facility will require significant capital investment and remediation moving forward."

"If the facility were to remain on site, a complete building condition assessment would be required. Further, council passed a resolution to examine opportunities to develop the Gateway site, which would necessitate a relocation of the market," Vair says.

Monday's City Council meeting will be livestreamed on SooToday starting at 4:30 p.m.