Joseph Segal is pleased to be involved in the revival of a place where he helped make his mark in the business world.
The City of New Westminster announced last week that it sold Merchant Square for $36.5 million to 777 Columbia Street, a partnership jointly owned by Kingswood Capital and Duke Holdings – a company jointly owned by businessmen Joseph Segal and Suki Sekhon. It’s been years since Segal has been to New Westminster, but his business roots on Columbia Street go back more than four decades.
“I used to own a company called Fields. Store Number 2 was in New Westminster, just sitting about where this new convention centre is,” he told The Record. “That is coincidental.”
At one time, Segal also owned a Zellers store that was located in New Westminster.
In addition to founding Fields Stores Limited, Segal’s business dealings include purchasing Zellers in 1976, becoming a major shareholder and member of Hudson’s Bay board in 1979, and forming Kingswood Capital Corporation, a real estate developer and acquirer of companies for turn-around in 1979.
When the Uptown Property Group withdrew from the Merchant Square project, the city decided to build the office tower on top of its new convention and community facility, Anvil Centre.
Mayor Wayne Wright said he wrote a list of three potential purchasers and put out a call to the first person on his list – Segal.
“He said, yes,” Wright recalled of their meeting. “That’s why it’s magic. My intention was maybe to have someone that was local that could maybe do more for our city because of who they were or the business they had, and their affiliation with the city, now or in the past. That really made the list pretty small.”
Segal said the initial meeting between himself, Sekhon and Wright was very straightforward and gauged potential interest in the project. The businessmen were interested.
“I think that this is a very fair deal – both ways. That is the important thing. A deal that is imbalanced is never going to work,” he said. “This is good for the city and it will be, hopefully, good for us. The city knows exactly what it is – we don’t. We are not going to know what the result is – it could take a year, it could take two, it could take three. Who knows? We’ve got to find a tenant. Do you want to lease some space?”
While “very few” institutions or people buy empty buildings because of the costs of owning unleased buildings, Segal said “everything is a calculated risk” and Merchant Square was a risk worth taking.
"It didn’t matter that the other people didn't deliver, or weren't interested. That didn’t bother me at all. You look at things the way they are in your eyes, not somebody else's eyes,” he said. “It is in the eyes of the beholder.”
Segal said the building’s proximity to SkyTrain was its main selling feature.
“It's the simple fact that it is on transit. It is part of the convention centre and it makes economic sense,” he said. “There is not a lot of office market in New Westminster, but we are going to have to create that market, and that's what we will try and do.”
Segal recalls the days when the downtown was a economic hub for the region.
"I think New Westminster, it was the jewel in the crown, is going to come back. It’s going to be a jewel in the crown again,” he said. “You've got everything going for you. You are sitting right smack in the middle of everything. All you have to do is open your arms and make everybody aware of where you are, and what you are. You are central, you are focused. You have to make it inviting."
As part of the business deal, the city will retain ownership of Anvil Centre, a conference and community facility, ground-level retail space and the three-level underground parkade. Segal believes the project is a step forward for New Westminster.
"I can tell you very frankly if you want to create a community and you want to create fulcrum in the city, you need office space, you need a convention centre,” Segal said. “This was not the development of an office building. This was a complex. This is a convention centre, so that if you have a wedding, if you have a convention, if you have a need to accommodate 300, 400 or 500 people, why would you send them away to Vancouver or Burnaby because you can’t accommodate them. We bought the office building because we believe in the potential.”
Some community members viewed the city’s decision to proceed with construction of the office tower as a bold move, while others thought it was too financially risky.
“Who else would have precipitated something of this nature in downtown New Westminster? No one. They would have said, ‘New Westminster, that’s the last place in the world I want to build an office building or a convention centre,’ so the city did it because it’s important for the evolution of the city,” Segal said. “So now the net result will be that it will be the fulcrum and there will be other things that will happen as a result of it within the city. Hopefully it will attract some other business to the city as tenants. If the marketplace isn’t going to do it, and the city believes in it, they should do it. It’s a calculated risk. What’s the worst that happens? So it takes a little longer or you make a little less, but it’s not as if it’s the end of the world. It’s a city. New Westminster was the fulcrum, it was a community that everybody that lived there was proud of – and then it sort of went into decay and Columbia Street became derelict. It used to be a vibrant street and this is going to revive it.”
In addition to his business dealings, Segal and his wife Rosalie are well-known philanthropists, having contributed millions of dollars to charitable causes including Variety Club, education scholarships and the Vancouver General Hospital and UBC Hospital Foundation. Locally, the Segals have contributed to Honour House, a facility that provides temporary housing for wounded or injured military personnel and first responders, and their families, who are receiving care or rehabilitation in the Lower Mainland.
"We support that because it's an important institution and they have done a lot of good for people, for a segment of the community that has been and is still overlooked to a large degree. Honour House helps those who can't help themselves. We support them financially,” he said. “If you can help, you help. We didn't buy this building because it is a gift. We bought it because it is an opportunity for us to create some value. That's basically what it is.”
According to Segal, he and Sekhon will own another property together in Vancouver and have been involved in the Merchant Square project together since their initial meeting with the mayor.
Segal rarely visits his real estate acquisitions as they are “ordinary”, but he anticipates he’ll be visiting Merchant Square once it’s complete.
“There has been a revival taking place on Columbia Street,” he said. “I think this is a commitment. This stands out and says, we believe. That’s important. If the city and the city management and the city administration doesn’t believe – then why should I believe? But they did it. Does that give me comfort? Simply and purely because it’s a step in the right direction. A step in the right direction is better than a slide in the wrong direction.”
