Sault Gateway: 'the thing's going to get built'.

Sault Ste. Marie -- After eight years of frustration in Sault Ste. Marie, watching developers come and go, the Gateway-Borealis tourism project appears to be on pace toward construction next spring.

With assurances from Toronto developer Philip Garforth that the massive waterfront development is a risk-free venture for local taxpayers, city councillors agreed Nov. 3 to send the application for the proposed $54 million waterfront development to the Northern Ontario Heritage Fund Corp. (NOHFC) to access $15 million in project funding.

The property including the casino is called Gateway. Borealis refers to the developer's tourism attraction.

"The thing's going to get built," said a bleary-eyed Garforth, president and CEO of the Garforth Group, after an all-night drive from Sault Ste. Marie back to his Toronto office. "We're all champing at the bit."

A subsidiary company of the Garforth Group, Legacy Quest Developments Inc., will oversee the project, which is expected to break ground next April followed by a two-year construction period.

With financial hacking from Commercial Capital of New York. Garforth said his design team was poised to start final working drawings once provincial funding is approved.

The project application, now in its second stage, needs approval by both NOHFC and Management Board of cabinet.

No timelines for the approvals have been set but the city expects a speedy response in time for the spring construction start.

The province has retained Deloitte & Touche to perform due diligence work on the Borealis application prior to an NOHFC board meeting in late January.

Council's decision ended months of sometimes publicly contentious negotiating in the local media between Garforth and the city over the financial risks associated with the project.

"It's a long process, any project like this," said Garforth. "The city had some very constructive comments, made certain changes and probably improved the project overall.

"It was a big disappointment (not to begin construction this past summer), but we're going to try and fast-track everything that's planned."

City planning director Don McConnell said the city's two major sticking points were that Borealis would either not be built, be abandoned halfway through construction or that the tourist attraction would fail, leaving the city on the hook to repay $15 million to the NOHFC.

To alleviate those concerns, project partner PCL Construction is providing a performance bond for the project's full value.

"That risk has been eliminated with provision of a bond," said McConnell.

The city and Garforth are recommending that Heritage Fund money be gradually dispensed over the period of construction and the first five years of Gateway's operation.

They recommend an initial $750,000 be given to Garforth's group for costs incurred for preparation of reports and legal agreements. Thirty days after the Borealis attraction opens, $4.25 million will be released with the remainder of the $15 million--about $2 million annually--allocated over the next five years.

"Basically they're (developers) paying for the whole thing up front," said McConnell.

McConnell said aside from some standard regulatory approvals, the project appears to have clear sailing ahead of it.

Borealis promises to be one of the most spectacular biggest tourist attractions in Northern Ontario.

The attraction will include a massive 35,000-square foot green house covered by a large transparent dome that will house diverse environments of plants and trees. The design was inspired by the bio-domes and tropical rain forests of the Eden project in Cornwall, England.

The 14-acre site will also include restaurants, retail outlets, a performing arts theatre, a new Agawa Canyon tour train station and an ice hotel during the winter months.

"We've got a first-class team building this and it's going to be a world-class project when it's finished," said Garforth.

He has assembled an impressive list of development partners that includes Carlson Hotels, which will construct a Radisson Hotel on the site, Select Contracts Group to run the Borealis exhibits, Bell Canada as a technology and retail development partner, and PCL Construction, Canada's largest general contractor.

Project planners promise to deliver 600 full-time and part-time jobs working on the site, including 50 at the Borealis attraction.

It's expected to draw one million visitors annually generating $50 million in spending while filling the city's coffers with $600,000 in annual tax revenue.

The majority of visitors are expected to come from Ontario and the U.S. Midwest market, but Garforth has his eyes on marketing Borealis as a global attraction.

Plans to convert the Gateway site into a tourist spot has been in the works since 1990 when the city began negotiations to remove a scrapyard on the property's north end, the present-day site of the charity casino.

Borealis will he built to the immediate south of the casino and will be within easy walking distance of the Sault Ste. Marie Heritage Canal.

The new Bay Street extension, linking the International Bridge and the future truck route to the city's downtown, splits the Gateway property in half.

The Borealis site, which once contained some Algoma Steel settling ponds, will be transferred to the Legacy Quest group once Management Board approval is given and a soil test for residual contaminants is complete.

Since 1998, a slew of developers have come forward to develop Gateway. The parade started with the Michigan Sault Tribe of Chippewas, then the First Gulf Development of Mississauga, MagiCorp Entertainment of Toronto and Rick Hohnes of Kittling Ridge Winery Inn, who brought Garforth in as a partner, before Holmes dropped out due to financial difficulties.

www.garforthgroup.com

www.city.sault-ste-marie.on.ca

By IAN ROSS

Northern Ontario Business