Muskoka-bound crowd flocking to Blue Sky country: lower real estate prices and the Northern lifestyle are luring GTA weekend warriors to the North Bay area.

The four-laning of Highway 11 and a surging local economy is paying some dividends in North Bay's construction sector.

[ILLUSTRATION OMITTED]

The Gateway City has been caught up in the consumer demand across northeastern Ontario for quieter and more affordable vacation and retirement properties.

While North Bay's home construction boom continues unabated, the city is gaining exposure as the place to be for early retirement and seasonal homes as the overpriced Muskoka market is driving cottagers and would-be retirees further north.

"It's an exciting time to be in North Bay," says John Lechlitner of Eastview Developments, who is developing cottage lots and an 84-lot residential subdivision on Airport Hill in the city. "The next five years are going to be very fun and interesting times in this area."

Continued low interest rates and steady economic growth in the community have helped fuel the local building boom. After a series of downsizings at government institutions in the late 1990s. North Bay has rebounded on the strength of its small- to medium-sized manufacturers, resource and industrial suppliers, and transportation carriers.

Along the city's waterfront, some of the building blocks for their revitalized park project are being put in place.

Sudbury's Dalron Construction has broken ground on an $18-million seniors' retirement complex just off Oak Street next to the future park.

The 194-suite Marina Point seniors' complex will be geared toward the 55-plus crowd. The first of two phases on the former Kenrock property should be completed by the end of 2006.

Joe DiPietro, president of Autumn Wood Mature Lifestyle Community, a division of Dalron Construction which develops retirement projects, says North Bay is an attractive market with an under-supply of leisure-living product geared to today's senior.

"Geographically, it's a great location," says DiPietro, "in terms of the highways that intersect at North Bay and the land itself is very well located."

The city, which plans to market itself as an active retirement community, received national accolades last year from 50plus magazine as one of the 20 best places to live in Canada, citing quality of life issues in the recreation and medical services.

Residential development is a big part of a civic effort to convert 14 hectares of the former Canadian Pacific (CP) rail lands into a community gathering place with carousels, a botanical garden, an outdoor theatre and a grassy common for festivals and events. New housing projects are expected to go up around the park's periphery.

Together with the refurbishment of the old CP station into a tourist attraction, it's hoped that the park project will generate $450 million worth of economic development in downtown North Bay.

More waterfront development is on the way. An $11-million condo project on Lakeshore Drive is slated to begin construction this fall.

The Toronto-based Barnes Group selected Venasse Construction to build on the site of the demolished Lakeview Hotel to create a 46-unit condominium development to be known as The Watersun.

Expected to be completed in mid-2006, it is the company's first North Bay project, says developer Jim Barnes, whose great grandfather, T.T. Barnes, developed most of the buildings in Sault Ste. Marie's downtown.

The 920-sq. ft. to 2,400-sq. ft. units feature lakeside-facing terraces ranging in price from $200,000 to $300,000.

Since announcing their plans at a July launch, the condos have been snapped up fast by local people with 24 reservation agreements signed by mid-August.

It was a response that took Barnes by surprise.

"People are walking into the real estate (office) and dropping off their $10,000 cheques. It's unbelievable. There was a pent up demand in North Bay and we're wondering if there is a demand in other smaller communities."

If so, Barnes says low-rise waterfront condos may have appeal in other markets such as New Liskeard, Sudbury and Sault Ste, Marie.

The ongoing four-laning of Highway 11 only bodes well for the city's growth, he says.

[ILLUSTRATION OMITTED]

"I'm in downtown Toronto at Bay and Bloor and I can be up there in three and quarter hours. I think the whole market is heading towards there once people realize how easy it is to get up there and the price difference between there and Muskoka is like night and day."

The white-hot Muskoka market has pushed cottage country further north.

"The rule of thumb I was told years ago by some planners in the Muskokas is that any piece of property within an hour's drive of a four-lane highway will command top dollar," says Lechlitner. "We're almost there now."

His new 13-lot waterfront subdivision on the east end of Trout Lake known as the Stepping Stones, is located next to a provincially protected parkland, and is considered one of the more desirable areas.

The access road is almost finished, and a two-acre lot will go for about $145,000.

"A two acre lot an hour south of here, that same lot, would be two or three times that amount," says Rob Jamieson, a North Bay broker-owner at Century 21 Blue Sky Regional Realty Inc.

"We've already sold one lot to a Toronto lawyer, who will be building a substantial cottage."

Both say the area is attracting a steady influx of southerners ranging from their late 30s to near-retirees.

"They're thinking ahead to retiring, so they're buying now," says Jamieson.

Waterfront listings in the North Bay area are scarce with few fixer-upper steals on the market as many Lake Nipissing camp-style properties are being renovated into more seasonal and year-round homes.

Lechlitner says seasonal homes going for $500,000 to $800,000 in Muskokas, can be had in North Bay for $200,000, a fact not lost on some local home buyers.

"I like to think it's more than just value," says Jamieson. "Obviously we're less money than the Muskokas, but we offer a more laidback lifestyle, a little quieter and we're not as busy and commercialized."

Home construction continues at a torrid pace coming off of last year's record-breaking year in building permits. As of mid-August, the city has issued permits for 80 new single family dwellings, compared to 64 last year.

Last year, North Bay posted an all-time record of $71.3-million issued in building permits, mostly in home construction. This year, the city's total building values stood at $45 million with another late-season home building flurry expected this fall.

About 70 homes are in various stages of construction, compared to 115 started in 2004.

Lechlitner's Eastview Developments have planned an 84-lot subdivision on Airport Hill to address the city's chronic shortage of mid-priced single family homes under the $300,000 mark. The first phase of 15 lots is opening up. As well Belgian pre-fab builder, Quackels, has built a model home and is prepared to establish a manufacturing presence in the city.

"It shows no signs of slowing down in terms of residential starts," says Shawn Killins, the City of North Bay's chief building official. "We probably have another 10 or 12 in process currently and we still expect our usual fall fling where the builders get another two or three houses in the ground before the winter."

www.city.north-bay.on.ca

By IAN ROSS 

Northern Ontario Business