On The Waterfront - The World of Waterfront Condo Development

By Ted McIntyre

Waterfront Condo Development on Lake Ontario

“Buy land,” Mark Twain once wrote. “They’re not making it anymore.”

Had Twain refined his thoughts a bit, he probably would have suggested: “Buy waterfront property.” Lord knows we’re willing to pay handsomely for it. Perhaps it’s because it’s in our DNA—we do spend nine months floating in liquid before being introduced to the world, after all. Or maybe it’s just human nature—civilization having grown up, as it did, near rivers and oceans. Or perhaps it’s simply the unadulterated beauty of it all.

But there’s a lot more going on than mere visual appeal, science informs. A boatload of recent studies highlight the psychological and physical advantages of waterside living. According to Michael Depledge, chair of Environment and Human Health at the University of Exeter Medical School in England, living near the water not only “promotes physical activity and general fitness,” it also slows your heart rate and reduces stress, boosting our mental health.

Whether it’s the placid, sun-dappled aesthetic or the soothing sounds of waters splashing along the shoreline, the health benefits are something most Ontario consumers don’t typically fully appreciate when they purchase in a waterfront condo development overlooking one of Ontario’s many lakes, rivers and other bodies of water. Those folks primarily come for the view, and they’ll dig deep into their pockets for the privilege.

It’s why a two-bedroom suite with a lake view at WaterClub condominiums at Queen’s Quay and York will fetch $1 million+ on the resale market, whereas the same condo facing the Gardiner Expressway will run you $750,000 to $800,000, informs Gabi Fiumara of Re/Max, who specializes in GTA waterfront condo resales. If a primary motivator for a prospective buyer is to face Lake Ontario, they won’t be placated with something else in the same building, regardless of its amenities, Fiumara says. “Anybody asking for lake view will not settle for garden view, much less a highway view. They will almost always move along to a different building.”

Among the Thousand Islands

Kingston-based CaraCo Development Corporation has made sure purchasers don’t have to worry about that problem with its new Stone & South project. Facing a smattering of the Thousand Islands and designed to showcase a clear water view from every balcony, the boutique waterfront condo development is taking shape at the head of the Gananoque and St. Lawrence Rivers in the quaint town of Gananoque.

Absorbing the sublime view was among the first experiences of Gennaro DiSanto after signing on as the company’s new CEO in September 2017. “It was my second day on the job,” DiSanto remembers. “As soon as I got there, I stood in front of the property and looked out over the water and said, ‘Wow—this site and the views are spectacular. Who would not want to live here?’ My wife and I were among the first purchasers! Last summer, rather than driving by car, I took a boat from Kingston to the property and arrived where our dock would be, and knew it would be something incredible when it’s built.”

Featuring a total of 70 units—41 in the first phase and 29 in the second among two six-storey buildings—Stone & South will include its own marina—a big selling point, according to DiSanto, since “more than half the purchasers will have their own boats parked there.”

“A number are recreational users. Many are from the GTA, Ottawa, some from Kingston—only a few from Gananoque,” DiSanto says. “This replaces a summer cottage for them.”

Ranging between 913 and 1,547 sq. ft., suites start at $523,900. Construction of Phase One is just underway, with occupancy expected to begin in spring 2020. While CaraCo has a waterfront condo development project in Florida, this is the company’s first such development in Canada. How much extra time has the process required versus a project, say, a kilometre inland? “The layers that get added include the conservation authority, fisheries, the Ministry of Natural Resources, specifically as it relates to the construction of the seawall and marina,” DiSanto notes. “There are restrictions related to fish habitats that prevent us from working on the seawall or putting boat slips in from the middle of March to the middle of July. A lot of the approvals are being done concurrently, but obviously the more you have, the more time it takes. All told, it likely added up to an extra three to six months.”

Part of CaraCo’s sensitive construction has included a roughly 150-foot seawall as part of the deal. “Including design fees, etc., it’s certainly into seven figures,” DiSanto admits. But there was nowhere else a boutique project like this would work in the region, he says. “The suites are spacious and the finishes high-end, but Gananoque is a small market. The interest in Stone & South is solely related to the fact that it’s on the water.”

While many neighbours across the street complained they were losing their view—after CaraCo had cleared existing buildings from the land—a clear majority of the feedback has been positive, DiSanto notes. “A development like this in a town like Gananoque drives a lot of economic impact. The local business community, especially in the downtown core, is extremely excited. This will bring 150-200 new people there on a quasi-permanent basis.”

Now that CaraCo has a taste of the local waters, there’s a thirst for more. “We always say, ‘No matter where you are, there’s only so much waterfront,’” DiSanto says. “And in the Kingston market, there is a significant premium for it.”

And it doesn’t have to be a major river or lake to command that fee, DiSanto notes. “Over the years, I’ve done a substantial amount of development in low-rise, single-family detached, semis and townhouses, and even then there could be a lot premium of $100,000 for homes backing on to a stormwater management pond.”

Aqualand

While CaraCo has dipped its toes into the water in Gananoque, it’s been more of a plunge for Toronto’s Tridel, whose lakefront exposure dates back to a phone call in 2010 with Houston-based real estate giant Hines. After winning the bid of a Toronto Waterfront tender of the city’s Bayside site, Hines in their capacity as the master developer selected Tridel to be the exclusive residential partner for the 13-acre mega-project. Tridel and Hines are now marketing the fourth and final condo in a series along Queens Quay East that also includes their award-winning creations of Aqualina, Aquavista and Aquabella.

The new Aqualuna at Bayside, launched last June, will be a striking design from Copenhagen-based 3XN Architects. Standing 14 storeys at its highest point, with a valley between two offset towers, the design features cascading terraces with suites that will range from 821 to a whopping 4,622 sq. ft.—each designed to maximize views to the water.

“I think with this building we’re making an architectural statement not just for this location, but for the city,” offers Jim Ritchie, Executive Vice-President, Sales & Marketing with Tridel.

If there was one surprise along the way, it was the progressing appetite for luxury suites, Ritchie says. “The sales absorptions were better than we thought, and are certainly commanding prices that if I told somebody we would do this a few years ago, they would have looked at us and said we were crazy.”

At an average of $1,450 a square foot, the typical selling price at Aqualuna is over $2 million. “But we’ve had most of our success in the $2-$4 million range,” Ritchie says. “The most expensive suite sold thus far is $7.5 million, and there’s one available at $8.9 million.”

Taking advantage as much as possible of its signature location—with larger suites reserved for optimal Lake Ontario vistas and smaller suites offering less dramatic perspectives—was the philosophy at Aqualuna.

“One thing we discovered with these buildings, clearly with waterfront property, is that people are looking for larger condominium homes than you’d typically find in this sub-market,” Ritchie says. “You don’t find your buyers from the immediate neighbourhood. You tend to bring them in from all over the GTA. Even those looking for larger condos in the $3-$7 million range are coming from established neighbourhoods with large homes.

“As each of the buildings came to market, we made the average (unit) sizes larger,” Ritchie explains. How much so? Despite the fact that both projects possess roughly the same square footage, Phase One featured 362 condo suites while Aqualuna will have just 225.

Pier Review

A few blocks east along Queen’s Quay, at the foot of Yonge Street, Cityzen Development Group is erecting The Tower at Pier 27. Designed by Peter Clewes of architectsAlliance, the rhythmic and oscillating design of the 35-storey waterfront condo development is meant to suggest the lapping of waves, while offering some of the finest panoramic views of the water, Toronto Islands and the city. But it hasn’t always been smooth sailing at Pier 27.

Cityzen president Sam Crignano first acquired the property in 2003 from Avro Quay Ltd. “When I got the call, Avro had already invested 20 years in getting approvals, but decided they didn’t want to go any further,” Crignano says. “We tweaked the zoning, applying for minor variances.”

There was one lingering eyesore, though: the permanently docked MS Jadran, home to Captain John’s Harbour Boat Restaurant, which had declared bankruptcy the previous year. The boat had long since fallen into a state of disrepair when the City, with the owner owing more than $1 million in taxes and fees, initiated the process of seizing the vessel in 2013. In May 2015, it was finally towed away, providing unobstructed views of the slip for the first time in ages. “It was Waterfront Toronto’s plan to get rid of that eyesore for some time, and we helped wherever we could,” says Crignano, whose partnership with Waterfront Toronto has included the construction of the Promenade along the water’s edge and Yonge Quay.

“The revitalization has created amenities like Sugar Beach and Sherbourne Common, which are destinations for people throughout the city,” says Crignano. “Add to that new streetcar tracks, bike lanes and pedestrian-friendly walkways that have made the community more vibrant and accessible.” Crignano has been front and centre as real estate prices have taken off since 2003.

“The cost has probably doubled for suites from the first to third phase, but the land value has probably quadrupled,” he notes. And, as always, there’s a pretty penny to face the lake. “It’s about 20% for a direct water view,” Crignano says. “So if today’s values are about $1,100 to $1,200 a square foot, you’re looking at upwards of $1,500 a square foot.” There’s also an added price to pay for construction.

“The challenge is obviously working that close to the water,” Crignano notes. “First there was a seawall that had to be rebuilt. And the shoring system was very complicated—we needed to bathtub it since the lowest level of our garage was actually below the bottom of the lake. When you get to those lower levels, you’re actually excavating into shale, so you’re concerned about percolation through the shale there. That’s why you want to cover it with concrete as quickly as possible. We anticipated these things, but you’re paying more attention to engineering design and construction, so obviously it’s costlier to do this since it’s not conventional.”

Digging Deep

While they’re not necessarily at the water’s edge, the Molinaro Group features six finished or current projects in Burlington overlooking Lake Ontario. The builder’s newest design, however, will require a construction first for the firm. Molinaro’s Brock 2, a 22-storey, 162-unit condo a couple blocks north of the lakeshore just off Burlington’s downtown core, includes four underground levels—and that’s where the challenge pops up, explains the firm’s president, Vince Molinaro. “Our underground will extend about seven metres below the water table,” Molinaro notes. “There are construction and post-construction issues with that. We have to do a hydrogeological report (roughly $50,000) to determine the volume and quality of the water. The report then will be circulated to our shoring, structural, site servicing and architect consultants for review and recommendation. With our particular project, they’re recommending a raft slab—essentially a giant piece of concrete floating in the ground to deal with the hydrostatic pressure from the water below. The slab, which will anchor the building in place, could be massive—up to 10+ feet thick. Definitely not conventional construction!”

And kind of expensive. Molinaro has budgeted $1 million for the slab, dewatering, waterproofing, etc. “We’re essentially going to have to bathtub the underground, which is over and above the regular concrete and foundation. And there’s the Permit to Take Water application we’ll have to file through the MOE—so that’s another time-consuming process that requires studies, drawings and approvals. Regulation allows us to discharge 400,000 litres a day, and we’re gonna be around 600,000, so well above the guideline. The City is also involved in the process.” Altogether, Molinaro estimates at least an extra three to four months to the construction process due to the required approvals, compared to the norm. “You’re carrying a lot of costs (for these type of builds).”

Once complete, Molinaro expects lakeview suites to command premiums of around $50,000, with one-bedroom suites starting around the low $400,000s.

How do sales compare to that of Molinaro’s Paradigm project near a GO Train site in Burlington? “At Paradigm, it was well over 50% investors,” Molinaro says. “But with Brock 2 being a pricier build and located downtown, we anticipate getting a lot more end-users.”

The Great 8

Had the City of Hamilton never explored the steel industry, its waterside vistas would be among the best in Canada.

History being what it is, the City has had to play the hand it’s been dealt. But an ambitious plan for Hamilton’s west harbour is laying the foundation for waterfront reinvention. Pending the signing of the final development agreement, the 13-acre mixed-use Pier 8 project will be developed by Waterfront Shores, a consortium consisting of Hamilton architect Bruce Kuwabara of KPMB Architects, Cityzen Development Corp., Fernbrook Homes Group, GFL Environmental Inc. and Greybrook Realty Partners Inc. It will entail 1,292 condos in 20 separate buildings (65 units of which will be through Habitat for Humanity). Forrec Ltd. is designing the promenade, called Hammer City, which will include a beach, a games terrace, café, playground and “wetland remediation gardens.”

The Hamilton Port Authority acquired the former industrial shipping pier, built on reclaimed land, from the federal government in 2000, but the City was unable to secure control until 2013, when the Port Authority agreed to terminate the leases early, notes Chris Phillips, Senior Advisor for Planning and Economic Development with the City of Hamilton.

“This is different in that the City continues to act in some degree as the land developer, with the City taking the site through planning approvals, subdivision and appeals to the OMB/LPAT,” says Phillips. “We’re also the ones physically putting in all the services—water, sewer, fibre cable—which would typically be the developer’s responsibility.”

The City, which is also budgeting $15 million just to rehabilitate the shoreline. launched a request for quotation in April 2017, with 13 different consortiums interested at the initial stage. City Council approved the preferred proponent in June 2018. Waterfront Shores will pay at least $41,258,843 for the site between now and 2025 (“at least” because the land will be purchased in four blocks, with the City of Hamilton applying market value at the time of each purchase). The largest payment—a minimum $22,722,438—will be made sometime this year or next. Once complete, the developer will pay the city 1% of the gross revenue.

And as always, Phillips says, “being on the waterfront means the spotlight is much brighter than with any other type of project. And this sits right across the street from a 100-year-old neighbourhood of 10,000-15,000 people.”

Bridge of Destiny

While Pier 8’s redevelopment was in doubt for decades, a Burlington project seems like it was always meant to be for New Horizon president Jeff Paikin.

“The first time I saw the property was actually as a prospective customer for the condo that was originally going to be built there,” recalls Paikin of his Bridgewater Residences on the Lake, currently taking shape along the Burlington waterfront. “My wife wanted me to build us a house on the water, and I said, ‘I won’t do it, because by the time it’s finished, our kids will have moved out and we’ll have a house three times bigger than we’ll need. And by the way, if I had my way, I’d want to live in a hotel so that when I get home I’ll never have to lift a finger.’

“We had a good chuckle,” says Paikin. “And then she was riding her bike one day in August of 2014 and saw them pounding a sign into the ground on the Bridgewater site, saying, ‘Coming soon—Condominiums—Mady Development.’ The project then included an adjacent hotel. So she came home and said, ‘I think we have the answer here! And according to the information, you’ll even be able to get room service from the hotel!’

“So we went down and bought a unit from Mady,” Paikin relates. “They were about 30% into sales when they ran into some issues with a couple other properties they had on the go, and the people who sold the Burlington condos on Mady’s behalf asked me if we were capable of taking the project over. I said, ‘You’re darn tootin’ we can!’ We signed our purchase agreement in October 2014, and informed the purchasers in January 2015, letting them know that we knew better than anybody what they were expecting, since I signed a contract myself!” “We’ll have our first move-ins later this year,” Paikin says. “Our own unit will be about a year from now—the seventh floor of the seven-floor building. There’s also a 22-storey building next door.”

While builders are prepared for the worst when they break ground near a major body of water, there can be a random nature to it, suggests Paikin. “For Bridgewater, we dug down four floors for underground parking right beside the lake and it was bone dry. We had no issues in Stoney Creek (Sapphire at Waterfront Trails) right beside the lake either. Around 2006, though, on our four-storey Westwood project on Plains Rd. in Burlington, we started digging for our one level of underground parking and it overflowed with water like crazy. We had to redesign and raise the building a couple feet—and that’s about a mile from the lake! But water flows off the escarpment and it goes where it wants to go.”

More predictable are land costs. Paikin estimates real estate for waterfront condo development is a minimum double the price in Burlington versus a kilometre inland. But oh, those views!

“At Sapphire, you can see the CN Tower plain as day right across Lake Ontario,” Paikin notes. “Being on the bay versus Burlington is a completely different view. I think it’s the best anywhere.