The cities of Kitchener, Waterloo and Cambridge are tapping the workers of Waterloo Region's high-tech companies to bring new residents to the cities' old factories and warehouses.

The former Kaufman Footwear factory is an imposing 80-year-old building on the northern edge of Kitchener's downtown. Once one of Kitchener's largest employers, the Kaufman building stood empty for years before catching the attention of Kimshaw Holdings and Andrin Homes.

"We were attracted to this building by the huge windows and great location on King Street," says Andrin Homes project manager Andrew Smith. "This type of building was known as a 'sunlight factory' because the windows are much bigger than most other factories.

"The heritage element to the building, the 13.5-foot ceiling heights and exposed concrete and ductwork has served to make the Kaufman Lofts very popular."

Ned Bekevac, Business Edge
President Paul de Haas' Haastown Holdings Inc. has converted Kitchener's J.C. Snyder furniture building, into the Lofts on Mansion.

Construction on Phase 1 of the nearly 100,000-sq.-ft. Kaufman Lofts project began earlier this year, and residents are expected to move in starting August 2006.

Prices range from $115,990 to $221,990, with most units priced below $150,000. Units vary in size between 530- and 1,215-sq.-ft. More than 60 per cent of the Phase 1 units sold within five days of going on the market and the project boasts a waiting list of 600 people interested in Phase 2.

Loft conversions of industrial properties have been successfully sold throughout North America, especially in Manhattan, Chicago and San Francisco.

The lifestyle offered by these developments, the high ceilings, large windows and open concept design appeal to young professionals, especially high-tech workers, interested in a modern living space different from the typical urban apartment or suburban family home.

"We maintained a marketing strategy that focused on young professional people, based on the businesses in the area, specifically young high-tech workers," says Smith. "I think the attraction to young professionals is the downtown location, the raw, open space and great value."

Kitchener has a number of properties it wants to redevelop. The northern end of the city's downtown is known as the warehouse district, containing a number of factories and warehouses dating from the turn of the century to the 1920s. The buildings are architecturally distinctive and historically significant, but the companies that built them have long since left the core.

The warehouse district isn't the only place where industrial properties could use redevelopment.

East of Kitchener's downtown, the Lofts on Mansion seeks to revitalize the turn-of-the-century J.C. Snyder furniture factory on the corner of Mansion and Chestnut streets within an established residential neighbourhood.

"Part of what has made this project so attractive is its intimacy," says Paul de Haas, the president of the driver behind the project, Haastown Holdings Inc., which is also involved in two other projects in the area: The Bridgeport Lofts in Waterloo and the Mill Lofts in Guelph.

"The Lofts on Mansion is uniquely carved out of a wonderful quaint residential neighbourhood."

Ned Bekevac, Business Edge
Units range from bachelor pads to two-bedroom with modern decor kitchens.

The units in the Lofts on Mansion range from 500-sq.-ft. bachelor pads to 1,100-sq.-ft., two-bedroom units. Residents started moving in mid-November, and all but six of the project's 58 units have sold.

"Young high-tech workers were among the demographic we attempted to target these spaces toward," says de Haas. "Marketing to this audience was done via direct presentation to many of the local tech firms in addition to the conventional media advertising methods."

These two projects are part of a loft-building boom in the region that began in 1999 with the Seagram Lofts project, converting a distillery at the edge of uptown Waterloo into spacious units of up to 2,000 sq. ft. selling for up to $400,000.

There were more than 2,300 housing starts in the Kitchener Census Metropolitan Area during the first seven months of 2005, a 12.7-per-cent increase on the same period a year before, according to the Canadian Mortgage and Housing Corp.

Of these, 446 units were apartment/loft-style condominium space.

Loft prices in Waterloo Region start at about $90,000, rise as high as $400,000 and sell for a median of $123,000.

While the median price for all homes in Kitchener-Waterloo is $211,000, developers sell more loft units by the square foot and they tend to sell them quickly.

"The success of Phase 1 of Kaufman Lofts and the waiting list told us that the demand for lofts in Kitchener is extensive," says Smith of Andrin Homes. "As a result, we went back to our architects and the city and added a partial fifth floor and a sixth floor across Phase 1 and 2 of the project. The result is a great mix of authentic and contemporary lofts that has been very well received thus far."

Despite the popularity of loft living, the cities within the region have to work to encourage investment.

Converting industrial space to residential use can be more costly than building in a new subdivision, especially if the industrial "brownfield" site has been contaminated by its former use. So, why not just demolish and start over?

"Older industrial properties can provide intangible value in the historic qualities of the building that are not easily replicated in a new construction - unique dimensions and features, evidence of work, a sense of history," says Rod Regier, executive director of economic development for the City of Kitchener.

"For the community at large, the loft conversions interpret our industrial heritage to create interesting and intimate spaces in our urban landscape," Regier adds. "These attract consumers, investors and citizens alike."

For this reason, Kitchener has offered a number of incentives to brownfield investors.

"The City of Kitchener has been wonderful to deal with," says de Haas. "Our visions were in line and they understand the importance of these projects and the high costs to develop them. The city's various incentives helped in the successful completion."

Andrins' Smith says: "The City of Kitchener's EDGE program has been instrumental in the ability for Andrin to do this project, specifically, the elimination of certain city fees and charges."

The EDGE (encouraging development for growth efficiency) program uses a number of incentives to help Kitchener recycle its industrial building stock and attract investment and people to its downtown.

"Currently, the downtown financial incentives range from building permit rebates to $45,000 façade loans," says Silvia Wright, manager of downtown development for Kitchener. "A new program will be available later ... after council approval. It has proposed an incentive program designed to encourage residential development in under-used upper storeys of existing buildings downtown."

Converting old factories and warehouses benefits the Region of Waterloo by siphoning homebuyers away from urban sprawl developments at the region's fringe.

With the Province of Ontario projecting that the area population will grow from 500,000 to 750,000 by 2031, the region of Waterloo and the cities of Kitchener, Waterloo and Cambridge are determined that some of that growth will fill underutilized properties in the downtowns where residents won't need a car to get around.

With more properties available to convert, Andrin Homes and Haastown Holdings Inc. are looking ahead to new projects.

"We currently have a wonderful riverfront site in Galt," says de Haas. "The City of Kitchener has also contacted us with respect to specific properties that they wish to have redeveloped. These properties are currently in the hands of steering committees and may take some time to evolve, but we are happy with the forward thinking displayed by the municipal government and would be only too pleased to develop our relationship."

Fact Box Significant loft conversion projects in Waterloo Region and Guelph:

* Seagram Lofts: Waterloo;# opened 1999, finished 2001; 103 units; $150,000 to $400,000; $216,000 median.

* Bridgeport Lofts: Waterloo; #opened 2002; 24 units; student rental.

* Mill Lofts: Guelph; opened 2004; 78 units; rental.

* Eaton Lofts: Kitchener; opened 2005; 32 units; $99,000 to $299,990.

* The Lofts on Mansion: Kitchener; opened 2005; 58 units; one-bedrooms starting at $169,900.

* Kaufman Lofts: Kitchener; opening 2006; 100-plus units; $115,990 to $221,990.

* Le Marche Residences: Kitchener; opening 2006; 68 units; $159,400 to $240,400.

* Bauer Lofts: Waterloo; opening 2006-7; 88 units; prices to be determined.

* Arrow Lofts: Kitchener; opening 2007; 150 units; prices to be determined.

* Stewart Mill Lofts: Guelph; under development.

(James Bow can be reached at bow@businessedge.ca)