Vaughan Rising Podcast – Emerging Downtown Part 3: The SmartVMC Story with SmartCentres
This blog is a summary of the Vaughan Rising Podcast Season 1 Episode 9 by the host, Michelle Samson. For more detail, listen to the full episode (links below).
About the episode
SmartCentres is known for developing and operating big-box stores and plazas, but in the VMC, they’re working on a very different kind of vision: an urban mixed-use community called SmartVMC. SmartCentres founder Mitch Goldhar explains why he broke out of his low-rise comfort zone, and where he plans to take his legacy project.
Thoughts from the host
In episodes seven and eight of the podcast, we highlighted two major landowners in the Vaughan Metropolitan Centre (VMC) and the neighbourhoods they’re building. Now, we’re closing out season one of the Vaughan Rising Podcast with the VMC’s largest landowner: SmartCentres.
Mitch Goldhar founded SmartCentres with a vision to bring value-oriented shopping to Canada. He succeeded. If you have been to a Walmart, there’s a good chance you’ve walked on their property. If you saw a giant penguin at the entrance of that property, then you definitely have!
SmartCentres is known for developing and operating big-box stores and plazas, but in the VMC they’re working on a very different kind of vision: an urban mixed-use community called SmartVMC that already includes two Class A office towers and three 55-storey condo towers.
To learn more about this pivot, and SmartCentres’ other plans for SmartVMC, I sat down with Mitch Goldhar himself.
The story begins with Walmart. Back in the 1990s, SmartCentres was facilitating Walmart’s entry into Canada by securing land in strategic locations. The intersection of Highways 400 and 7 was a prime target, but things didn’t go quite as planned.
An obstacle came from a property seller experiencing the ’90s real estate downturn. Mitch wanted to buy 25 to 30 acres – which was exactly what they needed to build a shopping centre – but the seller refused to split his eight-hectare (200-acre) lot. With help from a financing partner, Mitch decided to break his own rule and buy much more land than was necessary.
SmartCentres was then going to maximize the land and location to build a massive shopping centre. The City was just starting to plan for a downtown in that area, and SmartCentres’ plans were put on hold. In the negotiations that followed, both parties agreed that the land had potential. SmartCentres built a few retail stores and left most of their property vacant for future development.
Then, the TTC called and delivered news of a City-supported subway station on this property. Mitch eagerly co-operated and started thinking about how to leverage this opportunity.
Along with other landowners in the VMC, SmartCentres was offered a once-in-a-lifetime chance to plan a transit-oriented community from scratch and build high-rise towers from vacant land. Mitch explained subways are usually brought to densely populated communities to relieve traffic. By bringing a subway to mostly vacant land, they could bypass low- and mid-rise development and go straight to high-rise, usually a 20- to 50-year process.
SmartCentres had 41 hectares (100 acres) within the VMC boundaries and wanted to build something spectacular. They studied great European cities to discover their secret formula, and Mitch had a eureka moment: they all revolved around open spaces. As he puts it, “Great architecture is the lyrics, but the open space is the music.”
Instead of maximizing densities and financial gain (especially since the land was bought before subway premiums were in effect), SmartCentres made a four-hectare (nine-acre) park the first thing they planned, located in the centre of the SmartVMC community, with a network of open spaces leading into it. The buildings were then planned around it.
These buildings included something new to the SmartCentres portfolio: Class A office towers. SmartCentres is best known for value-oriented retail, but they have invested in other categories as well. Mitch is a keen observer and will follow the strongest opportunity. When he started, he was frustrated by rising prices for basic consumer goods and created low-rent shopping centres. For the VMC, he saw that the GTA market lacked downtown-quality Class A office buildings in the suburbs. He sensed demand that was not yet realized.
So, SmartCentres started planning a Class A building and got another interesting call. Not from the TTC this time, but from KPMG. They heard about the subway extension and thought it would be the perfect place for accessing downtown Toronto and their significant client and employee base in the “905” region. They also wanted a Class A building, so it was a perfect fit.
With an anchor tenant secured, the next step was to decide if they wanted to incorporate extra space for other tenants. They took a gamble and built twice as much as what KPMG needed. Mitch says it was “nerve-wracking,” but the market responded, and SmartCentres now has two office buildings in the VMC that are 100 per cent leased.
The positive response and ongoing interest in the VMC have led SmartCentres to start working on a third office tower. The project is still in the design phase but will be Class A, 600,000 square feet (larger than the 365,000-square-foot KPMG Tower) and integrated with the buildings around it to generate a flow of pedestrian traffic.
Even after finding success with their office developments, SmartCentres was shocked by the response to their residential developments. Transit City was originally conceived as a single 36-storey condo tower, but as the launch date approached, SmartCentres and their condo partner CentreCourt felt that the demand would be higher, so they adjusted the design to 55 storeys. A second 55-storey tower was planned for a future phase two.
When they launched in 2017, they had a lineup around the block of 2,500 real estate agents. The first tower sold out within days, and they immediately released the second tower, which also sold out in days. They scrambled to design a third tower, and that, too, sold out. All three towers are now under construction, and two more Transit City condos were launched and sold out in 2019.
What’s next for SmartCentres? A lot. SmartVMC is zoned for another 14-million square feet of development. More specifically, a rental tower will be built into the next Transit City development, and Walmart will be moved to a site just outside the VMC boundaries on Highway 400. The third office building will come after that.
Within the next five years, Mitch is also hoping to develop the land fronting Highway 7, which will be a gathering place with many stores, restaurants, nightlife, a piazza and maybe a hotel. He also hopes to redevelop the Walmart site with more residential, office, retail and outdoor spaces.
A lot of food options will be incorporated into all these developments. The first will be Buca, which will open in the lobby of Transit City 1. In the meantime, Mitch has a few favourites elsewhere in Vaughan, including Bocconcino at 331 Trowers Rd., Sorrento North at 965 Major Mackenzie Dr. and Desserts Plus at 8611 Weston Rd.
This episode was recorded at the SmartCentres office in Vaughan.