Who's the man in the Hummer?

11/13/2004

It's brownfield developer and self-styled 'straight shooter' Steve Charest

BY MICHAEL-ALLAN MARION
EXPOSITOR STAFF / BRANTFORD


A lot of people in Brantford these days want to know where industrial rebuilder Steve Charest comes from and where his company King and Benton got its name, but he has no trouble explaining to anyone who asks.

As he wheels his conspicuous metallic grey Hummer on a tour of his business stomping grounds around a number of companies and investments in Brantford and Brant county, the 39-year-old, unapologetically assertive businessman, explains he took the name from the corner of King and Benton streets in Kitchener where he grew up.

That spot is important in his psyche because it’s the Speaker’s Corner landmark in that city’s downtown.

“It’s where anybody can go up, stand at the corner day or night, and say whatever maybe on their mind,” he says with resolution, his eyes fixed on the road.

“I’m living that. I like to be a straight shooter.”

Then he turns his head and concedes in softer tones: “Actually, that’s been the most frustrating, yet the most rewarding part of working in the community.”

Questions about Charest and his company King and Benton have been rampant in the past year since those names catapulted onto the area’s business scene and assumed a high profile in the media.

The public has come to know them through the contentious Harding Carpets brownfield redevelopment project, or the new private Oak Park North business park in the city’s northwest and another major land holding on Rest Acres Road in Brant County.

Between the three interests, Charest is at the vanguard of a new movement of entrepreneurs who see commerce and social value in infill and brownfield redevelopment projects, and he’s a major part of the next wave of peripheral development in Brantford and Brant.

His interest in redeveloping old properties even extends to his personal life. Charest has taken over an old stone farmhouse on East River Road and built an addition.

He is engaged to a local woman, and he has moved his nerve centre from Toronto to the former KeepRite building on Elgin Street.

Along with membership in business groups, he’s on the board of directors of the YM-YWCA, and he likes to help the guys who have been building the Canadian Military Heritage Museum on their own all these years.

Despite sinking those deep financial and personal roots, he and his business are still largely a mystery. He’s often regarded as an aggressive businessman who struts into city hall or speaks to politicians in a sometimes abrupt manner. But beyond that, little is known.

As Charest pulls the Hummer away from the curb outside The Expositor, he remarks that he has embraced a community where is largely misunderstood. And it’s mainly because of erroneous impressions and sometimes wild gossip about him that sprang up during last year’s highly public debate over city council’s fumbled handling of the Harding Carpets brownfield redevelopment.

The brownfields community advisory committee had composed a plan to launch a tax sale on the 10-acre property with an intact blocklong building so the city could gain control of the property, then conduct environmental tests to get a clear understanding of its contamination and its real worth. After that, the city would publicly entertain competitive redevelopment proposals.

But as soon as the tax sale closed without a bidder, the property was shanghaied away from the brown fields committee by a controlling faction on council who wanted to eliminate nearly $4 million in tax arrears and sell it for $100,000 to an obscure company called King and Benton – run by a certain Steve Charest – without going through the established process.

As the fracas developed through the last municipal election in November 2003, it gradually became clear that Charest was just a businessman who had simply walked into City Hall with an idea to buy the property, assume all the risk, and spend $3 million to $4 million revamping it into a warehousing operation.

But a majority of council fumbled the project and gave it the whiff of a closed deal.

They didn’t counsel Charest properly about he brownfields rehabilitation and redevelopment process. They did not follow council’s own policies. They did not keep the process public. And they did not engage the neighbourhood in a discussion about its own future.

Some members of council paid the price as they went down to defeat in the election, partly due to that controversy.

But Charest also suffered collateral damage in the crossfire, with mutterings that he got a sweet deal. To overcome the political stigma attached to the venture, he had to do those things that council had not done, which added to his costs.

He astutely put together his own public consultation process by forming a community advisory committee – even recruiting some members who had been critics on the election trail. The goal was to find out what the neighbourhood wanted in the design and operations to make the warehouse project more palatable.

Charest also led a series of site tour days in which politicians, city staff and the community were taken every few months through the sprawling building. They were able to see a garish edifice – that had been the haven of squatters, dumpsters, an automobile chop shop (busted by the cops), and other illegal activities – gradually transformed before their eyes into a state-of-the-art facility that would be benign in the community.

Little by little, Charest build public confidence in the project.

But people kept asking questions about him and his business. Who’s this Charest guy and where’s he from anyway? Where did he get his money? And what explains the “King” and “Benton” in King and Benton?

Actually, Charest has been doing business in Brantford area for a lot longer than is commonly known, and already had some redevelopment ventures to his credit before the Harding affair. “It was just that I was operating below the public radar screen,” he says now.

As he turns the Hummer down Mohawk Street toward the first of his earlier ventures, Charest rattles off a quick bio. Born the son of businessman Andre Charest, he grew up in a family of three boys and two girls in the Kitchener-Waterloo area – at one point in house overlooking his favourite corner.

His late father was always self-employed, and always working. In consequence, “he was very demanding on his sons, and I’m the oldest so he was most demanding on me,” Charest continues.

“He knew the ethics of hard work and straight shooting, and he wanted us to have them. Sometimes, it takes a little longer that it should to realize the teachings, but he left his mark.”

It seems Charest was always of entrepreneurial bent and relentlessly competitive. As a kid, he delivered the Toronto Star. “I took the heaviest paper,” he grins in mock bravado.

Young Steve studied business at Wilfrid Laurier University, then started his own enterprise. After some early mixed success, he perfected a method of redeveloping old industrial sites and began a streak that has propelled him to prosperity.

The Hummer pulls up in front of the site of the first success: a warehouse and office building at 148 Mohawk St., called the Mohawk Business Centre. It holds a Mitten Vinyl warehouse, space for Sonoco, ITML, and a list of other organizations.

Although it doesn’t look like it now the property was once a typical brownfield site before the term sprang into public consciousness and policy literature.

Originally a former Massey plant, the building sat vacant and boarded up for 12 years, until Charest bought it under an early numbered company in 1996.

“It sure was on the wild side,” he recounts. “The outside looked awful.”

The outside was overgrown with weeds and trees. The inside was completely stripped of copper wiring and utilities, and full of scrap. The property carried a huge municipal tax arrears bill.

It was here that Charest learned to hone his talents at industrial building reclamation and capital investment targeting.

Brownfield properties begin with little capital value because they typically have deteriorated buildings, heavy liens and high risks. Banks won’t provide upfront financing, so the developer has to bring his own cash.

So here’s his method: find a property suitable for warehousing, get it up and running quickly, with tenants ready to movie in as soon as parts of the building are ready.

Keep plowing the revenue stream back into the building until it reaches its full development point and is full of tenants. Then channel the continuing stream, combined with a leveraging of the property's increased value, toward the next investment.

The method has worked, Charest says, because "there is a real need for storage space in this city," and money can be made quickly as long as the investor knows how to research and handle all the unexpected pitfalls of brownfields, including suddenly discovered environmental contamination and deteriorated infrastructure.

The unexpected almost always happens at brownfields, he says, and it's important to be ready.

"These projects are very, very difficult. The first thing you say is, 'Where do I start?' "Every inch of the way is hard. The purchase price is the smallest part of any project because most of the development is very capita intensive."

After the Mohawk Business Centre redevelopment, Charest turned his attention to the former Stelco Fastener building at Colborne Street West and Welsh Street and followed the same method.

Today, it houses the City of Brantford records department, Alti Packaging and First Nations Assembly.

Soon, Charest was turning his profits and leveraging capabilities toward his second business interest, new industrial park development. His capital purchases in old quarry lands in the city’s Oak Park North, and on Rest Acres Road in the county’s couthwest Paris business development area.

Last summer, he was ready to tackle his next brownfield project, Harding Carpets at 85 Morrell St., the move that rudely catapulted him on the radar screen.

As he turns the Hummer into the site, he says he avoids being bitter about the dispute, and regards it as a learning experience for everyone - the politicians, the community and himself.

"We have to have an understanding about brownfields to deal with them objectively," he says. "It's a continuing, learning experience."
He believes council, and particularly Coun. Marguerite Ceschi-Smith, have done a good job of promoting the issues, developing policies and tackling the takeover and early cleanup.

As many sites are reaching the point of redevelopment, he says council will have to learn the knack of knowing when its work is done, that it's time to stand aside and unleash the creative energy of private enterprise.

A walk around Harding shows what that creative energy can do. This is a vastly different property after King and Benton's $4-million complete retrofit.

Gone is the ghastly apparition the public beheld in a first flashlight tour in the frigid dark last December. Today, it's a bright, spacious site that looks much like a collection of large stadiums, already sporting a combination of warehouse and light industrial tenants.

As the work nears completion, a growing list of tenants have already set up shop. Among them:

Nichirin, which specializes in hose assemblies for the automotive and motorcycle markets, has taken space close to where an illegal chop shop once stood;

Focus Steel, a subsidiary of Chapelstone of New Brunswick, is assembling new state-of-the-art wall structural support units for prefabricated restaurants;

And Mitten Vinyl is due to move in shortly with offices and a distribution team.

"A lot of employment is being generated here," says Charest as he leads a walking tour. "Creating new life in these places is what it is all about."

He was able to showcase it recently while hosting the United Way's annual Giant Warehouse Sale that brought more than than 5,000 people through the building.

The property the city sold a year ago for $100,000 has been advertised for sale with industrial realtor CB Richard Ellis with a list price of $6.3 million.

Charest is also interested in council's plan to remediate and redevelop the 52-acre Greenwich-Mohawk brownfield area.

He developed a draft business plan using council's chosen renewal strategy of housing, commercial, museum and park space. But the plan had a false start early in the year because council wasn't ready in its step-by-step plan to take over the Sternson, Cockshutt-Go Vacations and Massey-Harris trio of sites and work with the private sector.

Charest says he is still interested in Greenwich-Mohawk whenever council is ready.

In the meantime, though, he has turned his attention to a very different venture - Oak Park North.

Years of quiet efforts culminated approval by council council last month of official plan amendments and changes to the city's zoning by-law, allowing him to create a 450-acre industrial park on the city’s northwest outskirts.

It contains three parcels of land: 120 acres on the west side of Oak Park Road, north of Highway 403, 303 acres on the east side, and about 20 acres on the Brant County side which are subject to a separate agreement.

With the city almost out of municipally owned and serviced land in its Northwest Business Park, Oak Park North represents a new model for industrial development. With the bulk of the city’s industrial lands now in private hands, Charest predicts city hall’s roll will gradually change from the prime – the – pump model used in the Northwest and Brandeida industrial parks to more of a facilitator and marketing partner. But that’s a matter for a different future.

Meanwhile, Charest has earned many kudos for his brownfield work.

Coun. Larry Kings, says he admires Charest's ability to turned a much-disputed development at Harding Carpets into an exemplary project and improve the neighbourhood at the same time.

"I know there was a lot of resistance at the beginning, but the work Steve has done for Holmedale (neighbourhood) to create some-thing safe out of something that was dangerous is wonderful," he says.

"What I also like is that he just didn't come and make some money here, he has become involved in our city. People in Brantford are particular about that."

Ajay Kaushik is a Toronto-based consultant for several brownfield re-developers, including Dalib Multani, owner of local builder Multani Custom Homes, which is redeveloping two industrial properties, the former Barber Ellis site on Grey Street and
Solaray on Grand River Avenue.

While consulting for Multani, Kaushik has closely followed Charest's labours in industrial redevelopment in the same city. He believes that they, combined with Multani's housing projects on other brownfields and heritage redeveloper Gabriel Kirchberger's work on old buildings in the downtown have contributed greatly to a new trend in
Brantford's development.

HIGH LOCAL AWARENESS

He says their examples have, in turn, created a high level of local awareness about brownfield and community renewal issues.

Kaushik believes Brantford has come a lot further than other cities in its understanding of how to breathe new life into its old industrial sites and use them for infill projects. It is also better positioned to take advantage of the Ontario government's new policies preferring infill and old sites redevelopment over sprawl.

"Multani, Charest and Kirchberger each work in different areas but they're all part of the broader picture of this kind of community renewal," says Kaushik.

"Brantford is doing good work in redeveloping old neighbourhoods because it has had to. Other communities could learn from this city and these developers."

Charest points the Hummer toward the Canadian Military Heritage Museum at 347 Greenwich, in the heart of the city's biggest brownfield area.

He likes to drop in regularly and chat with the guys who took over an old building in the Massey-Harris site a decade ago and, by hook or by crook, have fashioned a facility that houses one of the nation's best collections of military artefacts.

Charest has come to the museum this day because Rick Shaver, chairman of the board of directors, wants to show him a plaque made by the now-defunct Harding Carpets to commemorate employees who served in the Second World War.

Shaver had intended to present it to Charest at the United Way's warehouse sale kickoff as part of the festivities but wants to show it to him first. The businessman gushes at all the symbolism.

Like the Speaker's Corner of his youth, the military museum is another of Charest's favourite inspiration spots.

"What I see is people who have a passion to make something out of a place like this," he says back outside. "They're fighting every step of the way."

From this vantage point, Charest also can turn in one direction and see the clumps of trees following the canal’s course to the Grand River just beyond a wooded vanishing point.

Then he can turn in the opposite direction and view the scene of dereliction that is Greenwich-Mohawk.

"I like to pull up here just like today and see something that looks like Muskoka on one side and a ghetto on the other. On the canal I see kids skating in winter and sometimes I hear music. When I look at these old buildings, I think we have a real opportunity here to do something for kids in Eagle Place.

"That's really what it's all about."