Economy swallows land.

The economic spinoffs from Sudbury's mining boom and improving economy is having a ripple effect in construction throughout the industrial, commercial and institutional sector.

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With Inco re-opening old mines, new Falconbridge owners Xstrata Nickel promising more investment, and upstart miners like FNX Mining and First Nickel adding new production to the Sudbury Basin, there's been a growing demand for industry space.

"It's causing a (supply) crunch and we don't see it letting up for a few years," says commercial realtor Larry Gauthier of Mallette-Goring Inc. He's seeing tremendous demand from both local industrial shops and incoming companies looking for space in Sudbury.

"There was a period of more than 10 years where there was no demand nor construction to speak of. Over the last two years, there's been such a turn-around on the industry side, driven by the mining sector, the demand for space has increased substantially and our supply has dwindled out to nothing."

The City of Greater Sudbury estimates that this year there's $80.6 million worth of industrial, commercial and institutional construction including Anmar Mechanical and Electrical Contractors. The steel fabricators are moving from their shared space with Atlas Copco across Mumford Road into a new 58,000-square-foot building.

B & D Manufacturing plans to move out of its cramped 30,000-square-foot Falconbridge Road building after purchasing a 117-acre property to build a 51,000-square-foot complex. They are tentatively planning their opening in the spring or summer of 2007.

Stainless Steel Technology built onto their 35,000-square-foot shop with a 20,000-square-foot addition to house an 80-foot drop test tower and a 30-tonne crane to test conveyance safety systems before shipping them to customers.

Space in the Walden Industrial Park, near Inco's Copper Cliff refinery, is basically full, says Gauthier.

"We're starting to see interest for the Valley East industrial park as well. The supply is so little that (there) isn't much choice out there."

Average price of an industrial lot ranges from $35,000-per acre to $200,000 depending on location, soil conditions and access to transportation routes.

On the retail side, the construction of big box stores along the Kingsway has expanded the city's market radius and attracted more regional shoppers.

"There's tremendous growth in that area and a strong retail appetite for retail chains to come into this area," says Gauthier.

Facelifts at two of Sudbury's major shopping malls are underway.

Redcliff Realty Management, the owners of the New Sudbury Centre, have spent $25 million in upgrades since acquiring the popular mall in 2003. New tenants have been added along with an expanded Wal-Mart to 133,000-square-feet says New Sudbury general manager Curtis Fortowsky.

"It has always been a good performing shopping centre," he says.

"That had been neglected by the previous owners and we wanted to bring it to today's standards."

Some adjoining residential lots were purchased to create more parking and space for a possible 5,000 to 6,000-square-foot tenant.

The first renovations in 25 years to the Southridge Mall in Sudbury's south end are almost complete, says property manager Dan Schroeder. About 140,000-square-feet has been tacked on to the existing 175,000-square-feet including a 40,000-square-foot lower level to accommodate a new Zeller's store, a fitness centre and other new tenants.

"Our expansion is precipitated more by a need," says Schroeder. "We had a dark, dreary community shopping market that had to be revamped. You don't attract the retailers we have in an old-style early 80's project, you have to spruce it up and do the exterior treatment, new flooring, skylighting, ceilings, and architectural design."

An additional 65,000-square-feet of retail zoned property to the south has been approved for a "junior-type" box store.

Rumours persist of a second Wal-Mart mega-store but their Canadian developers have made no official announcement of a location.

The greatest impact on retail has occurred along the Kingway at Trinity Development's ever-expanding RioCan Centre. Ten more tenants and almost 170,000-square-feet of new retail space were added in 2005.

Art Potvin, the city's manager of development services, says although the major retail proposals have quieted down, there's some infilling opportunities along the rocky Kingsway frontage in Sudbury's east end.

As well, private developers have municipal approval for 150,000-square feet of retail space to the south behind the Silver City theatre in the RioCan Centre.

"Once we see more demand out there, that'll probably be the next piece to go," says Potvin.

While there's no pending announcements in retail, Potvin says two economy-type hotels are slated for the Kingsway. One is to be made public shortly, while another is in the discussion stage with the city.

On the institutional side, Laurentian University is building a 72,422-square-foot school of education worth $16.3 million and the Rainbow District School Board is building a $15 million public school with a French elementary school. College Boreal is building a $3.8 million shop facility.

Potvin says numerous site plans and rezoning applications are coming into Tom Davies Square with proposals for commercial buildings and strip malls in Sudbury's outlying areas of Valley East and Chelmsford, as well as plenty of applications for subdivision development.

Though there's nothing in the plans for a new industrial park subdivision, "that probably will be coming next. There's big demand but challenge is not land cost, but the cost of servicing."

Potvin says the city will eventually set aside a whole block of industrially-zoned land north of the Kingsway stretching up to LaSalle Boulevard, near the municipal landfill site, for a new industrial park subdivision.

By IAN ROSS

Northern Ontario Business