Harvard Developments

High opportunities┬áDeveloping urban villages in appropriate cities is a priority for Harvard Developments, Gary Toushek learns. Regina, SaskatchewanÔÇôbased Harvard Developments Inc., the primary operating entity of the family-owned Hill Companies (established in 1903), manages and owns property, and develops commercial, retail and residential real estate in parts of western Canada and the US. Other Hill Companies include Urban Forest Recyclers of Swift Current, Saskatchewan, which turns recycled pulp and paper into molded fiber packaging, such as egg filler flats; the Harvard Broadcasting Radio Group, which owns four radio stations in Saskatchewan as well as stations in Calgary and Fort McMurray; Western Surety Company, an insurance company in Regina that writes surety bond business for the construction industry in Canada; Harvard Energy, a petroleum and natural gas exploration and production partnership based in Calgary; and Cooks ISI Insurance in Regina, jointly owned by Harvard Developments and publicly traded Western Financial Group. ÔÇ£The diversification in location and type of business of the Hill Companies has allowed us to weather the various cyclical economic storms over the century,ÔÇØ says Mo Bundon, senior vice president and COO of Harvard Developments. ÔÇ£Most of HarvardÔÇÖs projects are with joint venture partners; we look for projects that have high opportunity and some risk, but that also have some hair on them and may be too difficult for some of the larger developers to get into.ÔÇØ He describes Harvard as a full-service real estate development company, specializing in site acquisitions, leasing, construction, property management and development management. On projects it employs appropriate consultants and subcontractors for particular architectural and engineering services required for the job. Harvard has entered into about 40 residential joint ventures with some of the larger property development companies in Alberta, mainly clustered around the still-booming oil-and-gas-driven Calgary and Edmonton markets, according to HarvardÔÇÖs vice president of development Blair Forster. ÔÇ£And in Saskatchewan we do our own full-service development of residential subdivisions, from urban planning and servicing to marketing of the lots, primarily to a builder group. Commercially, we have a portfolio of industrial, retail and office projects, and we intend to grow in all these areas.ÔÇØ Today one of HarvardÔÇÖs main focuses is developing urban villages in specific cities where the demographics and property warrant this kind of lifestyle concept. The Eau Claire Market is its largest undertaking at the moment, a $750 million development on seven acres of property bordering the downtown core of Calgary and on the banks of the Bow River. Originally industrial land left barren for several years, it became the Eau Claire Festival Market, designed primarily as a tourist destination with an eclectic, evolving series of small merchants selling seasonal goods, but no national retailers. It opened strong, but after 15 years of numerous owners and managers, it fell into disarray and debt. HarvardÔÇÖs initial intention was to acquire just the leasehold interest on the property. ÔÇ£But weÔÇÖve owned it now for about four years and looked at it for about a year and a half before we pulled the trigger on developing it,ÔÇØ says Forster. ÔÇ£For the first few years of ownership we worked with the city to put together a plan to increase density on the site, to layer a mix of uses and ultimately acquire the freehold interest of the land beneath the market. In spring of this year we negotiated a land use amendment and a conditional offer to acquire the land. Our development permit should be approved any day now, which will allow us to break ground on the site. Our main partner for the development is Synergy Properties, of Vancouver, British Columbia.ÔÇØ The land use amendment allows for a 6-FAR (floor area ratio: the total building square footage divided by the site size square footage) density. A total of 1.8 million square feet will be turned into 700 condo units, two hotels, 300,000 square feet of retail (including high-end clothiers), and 300,000 square feet of office space. Construction will begin with three levels of underground parking. Phase one will be a partial demolition of the existing building and an extension of the city grid with a private roadway through the site, then developing the south end of the project, about 1.3 million square feet. Phase two is the northern portion of the site. ÔÇ£The origin of the mixed-use urban village design is a trend weÔÇÖve seen nationwide,ÔÇØ Forster says, ÔÇ£that puts a mix of complementary uses on the same site. The old adage of ÔÇÿlive, work, stay and playÔÇÖ will be incorporated to create that 18-hours-per-day activity node. Whether youÔÇÖre working or living there, staying at a hotel, shopping, dining or watching a movie [Cineplex Odeon will have 45,000 square feet of theaters licensed for alcoholic beverages], there will always be visible activity that feeds on itself to create a compelling destination. SobeyÔÇÖs is rolling out a new initiative, an upscale grocery experience that will rival Whole Foods.ÔÇØ One hotel will be five-star, the other a smaller boutique. The condo units, ranging from $750 to $1,000 per square foot, will be a mix of extended stay (some may be branded with one of the hotels) and traditional residential units. ÔÇ£We believe that the next generation of retail with these urban villages and their lifestyle concept work only where the upper income demographic allows for it. And it has to happen organically. Commute times to downtown Calgary from its suburbs have extended to an hour at peak times, which means that living downtown saves you time normally spent in traffic. Downtown parking costs there are the highest in Canada, so youÔÇÖd save parking money, too.ÔÇØThe $600 million Currents of Windermere project, currently under construction in Edmonton, is HarvardÔÇÖs other major urban village project in Alberta, on 106 acres at the heart of a 700-acre master-planned residential community, in the suburban southwest of the city, with partner Cameron Development Corporation. ItÔÇÖs another mixed use development, 1.3 million square feet, with a new expressway nearby, as well as a higher income demographic. And the Grasslands project in Regina, south of the airport, is similar in design to the urban village in Edmonton, with 900,000 square feet on 90 acres, expected to break ground in 2009. Both these Harvard executives cite the competitive construction market as challenging in terms of costs and contractor availability. ÔÇ£And of course the economic slowdown and the tightening debt market will affect us somewhat,ÔÇØ says Forster. ÔÇ£Finding someone to place debt on these projects is getting more difficult.ÔÇØ ┬á