Farhi partners with London Community Foundation to pitch empty properties as housing

Three decades after it rose at the corner of Dundas and Richmond Streets, only one tenant now calls London's Market Tower home — a lone mobile phone retailer on the ground floor.

Next door, an older 14-storey building has loomed empty over the skyline after its namesake tenant, Royal Bank of Canada, moved out in 2019. A two-storey annex in between is also vacant.

All told, it's roughly 28,000 square metres of building space sitting unused in the heart of London at a time when local leaders are grappling with a housing and homelessness crisis.

The buildings' owner and a long-time London charity are hoping to change that.

Farhi Holdings Corp. (FHC) and London Community Foundation (LCF) say they're working to find one or more non-profits interested in buying the properties and making them affordable housing.

"With Farhi, we are aware that he has significant holdings in the downtown area," said Diane Silva, LCF's president and CEO.

"With the rise of remote work, and the city launching this plan of converting office units into housing, I think that's where the magic happened, and the concept of us partnering together."

The ambitious plan is outlined in a Request for Expressions of Interest document, or REOI, posted online last week by the city, aimed at gauging interest from qualified organizations. Submissions close in mid-March.

Three other downtown Farhi properties are also in the proposal, including the former downtown Rexall, the former London Free Press site, and a neighbouring surface parking lot.

"This initiative continues in my father's nearly 40-year tradition and legacy of giving back to the community with significant philanthropic initiatives and contributions," said Ben Farhi of FHC.

"We recognize the urgent need for affordable housing. We further believe partnering with the right organizations, like LCF and others, is key to delivering meaningful impact to specific sites, and we're proud to work alongside the great people at LCF."

In a statement, the city stressed it was not buying or establishing development plans in relation to the properties involved.

"The results will be collected and assessed for viability, and if something tangible comes out of the proposals, a subsequent procurement may be issued to solidify partnerships and commitments from the City of London."

It comes as London's core commercial vacancy rate hovered around 31.7 per cent in the fourth quarter of 2024, and as the city works to build 3,000 affordable units by the end of 2026, and 47,000 units overall by 2031.

According to the proposal, interested parties would purchase one or more properties from FHC, and obtain funding from LCF to facilitate buying and repurposing them for housing, including affordable units. 

Funding from LCF would come through its $25 million Social Impact Fund, which provides low-interest loans to fast-track affordable housing projects, LCF's website says. 

Silva said LCF's interim, friendly financing would allow the non-profits to start developing while they wait for other funding.

As part of the proposal, FHC would offer the properties "as a partnership contribution, at a significant discounted price," providing a 10 per cent donation of a property's fair market value for a tax receipt, the REOI says. 

Further, FHC was willing to offer a "vendor take back" mortgage at 80 per cent loan-to-value of the balance for one year at zero per cent interest, the document said. 

Appraisals commissioned by FHC describe Market Tower and the former RBC building as shell structures suitable for renovation. Last summer, FHC floated the properties as a potential new city hall location, a proposal council rebuffed in a 10-4 vote.

Both are older "Class B" buildings valued, as is, at $19.8 and $26.7 million, respectively, the documents say. The former Free Press building site is valued at nearly $38 million.

Applicants would have to commit to at least 30 per cent of units at an affordable rent, the REOI says. It proposes the city provide funding through its Roadmap to 3,000 action plan.

Other incentives are available, it says, including an office-to-residential conversion fund. The city is already putting up dollars for two downtown projects, including the former Rexall.

FHC sold 166 Dundas St. last year, but Farhi said it had since retaken ownership, with plans to develop 32 units, "finishing what the original group that bought it started."

"We've taken it back on ourselves, and we're moving forward," he said. Separately, Farhi said FHC was in the process of three conversion projects in downtown, details of which were not public yet.