Q&A With Glen Norton: Hamilton’s New Economic Development Director
Glen Norton, Hamilton’s new economic development director, is on a mission to drive his city’s growth. He told us his plans, and why Steeltown continues to be an alluring alternative to Toronto, particularly on the real estate front.
An MBA grad from Ivey School of Business at Western University, Norton spent more than two decades in commercial banking — at CIBC and Scotiabank, then as risk management VP at Meridian Credit Union — before joining the City of Hamilton in 2009 as a senior business development consultant, focusing on downtown renewal. He just took over as economic development director.
Bisnow: What are the top priorities for your tenure?
Glen Norton: It’s a great time to be coming in as a new director, because my team has been working on a new five-year economic development strategy — 2016 was an update year. So now I have a road map that says here’s what we need to do for the next five years, and it just comes down to making sure we execute on it well. We have six goals. First is to grow our non-residential tax assessment and increase the number of living wage jobs. Goal No. 2 is to keep the title as Canada’s most diversified economy; the Conference Board of Canada made that determination. A diversified economy stabilizes your unemployment rate.
Our third goal is to have Ontario’s best workforce, ensuring our people have the skills and attitudes employers are looking for. Goal No. 4 is to have our economy seen as supporting entrepreneurship and innovation — we’re not content to rest on yesterday’s laurels, it’s how do we get the next best mousetrap built here in Hamilton. We want vibrant commercial and cultural districts, and quality of life. People want cool shops, good restaurants and entertainment. Finally, we want to make strategic investments in infrastructure like broadband networks and post-secondary education, so we’re an economy of the future, not of the past.
Bisnow: How is real estate helping to propel Hamilton’s growth?
Norton: Lack of affordable real estate has been a detriment to Toronto. An acre of industrial land here is less than one-third of what it is in the GTA. So for people who need a lot of land for a factory or distribution warehouse, right away we’re cheaper. Then add to that the fact we don’t have traffic gridlock, we have better access to the US border, a cargo freight airport and a port for cargo shipping, and we start to look like an attractive place to develop that new plant. Then there’s the quality of life here for employees. People need to be able to afford to live close by work, and that’s one of the difficulties that Toronto’s success is posing for it.
So Hamilton is now being regarded as one of the hottest residential real estate markets in Canada, and people are moving out from Toronto. The negative effect of course is it pushes some of our own residents out of the city; if they hadn’t already bought, maybe now they can’t and they’re having to buy in another community down the road, like St. Catharines or Brantford.
Bisnow: What’s the state of the Hamilton office market?
Norton: We’ve lost a lot of the Fortune 500 company head offices. Phillips Environmental was based here, and the space they vacated when they folded has still not been re-leased. We also lost Stelco and Procter & Gamble. Eight years ago our downtown office vacancy rate was 19%. But we created a financial incentive that gives people an interest-free loan for 90% of lease-hold improvements. We’re at 13% currently, so we’ve got it down, but my goal is 7% within five years. At 7% you get re-investment; people say, "I better get building that building now because it’s heading for 5% if it’s at 7%." And then rates go up.
At the same time, offices are becoming more efficient, with more people being fit into smaller spaces, and there’s more flexible work-from-home arrangements. So it’s getting tougher to fill office space, but in the past year we’ve had 1,000 new jobs created in our downtown; where in the past five years we’d been averaging about 300. We’re on course to do 1,000 again in 2017. So the pace is picking up.
Bisnow: That must mean more residential and retail is coming?
Norton: Yes, we’ve had over 2,000 new residential units constructed downtown over the last three years, and that continues to grow. We’ve got projects on the way, another 2,000 units on the drawing board and starting. So that’s supporting both downtown office, because those people would prefer to walk to work or take transit. And it’s supporting retail growth. The No. 1 growth area for retail downtown is restaurants, and we’ve been successful in getting cool restaurants — some homegrown, and we’ve also attracted young chefs from Toronto, who can own their own restaurants if they come to Hamilton.
There are still vacant storefronts downtown, but things are moving faster now than they have in previous years. And people these days tend to want to buy, versus lease, because they see the property values going up. So landlords who are not interested in selling, who want to lease, are sitting with a vacancy. Those willing to sell are seeing buildings get picked up pretty fast. So as somebody who owns property, it says to you maybe I should just sell. That’s where demand is. Because people don’t want to sign a 10-year lease knowing they’re going to renew at a premium. Why don’t they just buy and ride the upswing in real estate prices.
Bisnow: Ontario is spending $1B to build a new LRT line for Hamilton. What’s the latest here?
Norton: Things are on track and proceeding, and the plan is to be in the ground within three years, I believe. It’s an east-west line through downtown that connects McMaster University to our east end. It’s our busiest route, so it will move traffic across the city faster and take cars off the road. There’ll be hardships for businesses along the line as it’s being built, but by and large, if you can figure out the best way to get through the construction period you benefit on the other side by increased traffic and visibility. A key goal for my department is to help those businesses succeed.
Bisnow: You’re also working on plans for waterfront redevelopment.
Norton: Many developers have declared interest in picking up our waterfront lands at Pier 7 and 8. It’s designated primarily for low-rise multifamily; about 1,600 residential units are contemplated in buildings up to eight storeys. Future phases will include some retail-commercial. There’ll be an RFP process in the coming months to select the appropriate developer for those sites. It’s not very often a city has that big a chunk of land it can develop, so there’s been a lot of public engagement to see what people want there. That’s why it’s staying low-rise; we’re not going for the high-rise towers Toronto went for on the waterfront.
Bisnow: And what will become of the old Stelco site?
Norton: It’s a big opportunity on our horizon, to take those surplus lands, land not needed to make steel, and put them back into productive use for other employment. There’s a lineup of companies wanting to locate on that land. First we need to be able to figure out who’s controlling the site and what’s the process for getting it redeveloped. That’s the challenge going into 2017. What role will the city have? We’d like to have a significant one, it’s our waterfront after all. Some remediation needs to happen. But it could end up being a potential site for a new film studio, among other clean industries that might locate there. We’re looking for groups that want to chat with us about that possibility.