Kitchener has gone through an impressive transformation over the past 20 years as a decaying core and declining manufacturing base gave way to over $2 billion in downtown residential and commercial construction and a rapidly growing technology sector.
Some of that progress was kickstarted by a $110-million Economic Development Investment Fund in 2000 and the rallying of public and private partners. Further growth will be aided by a new $110-million investment fund and the Make It Kitchener 2.0 strategy.
“In less than 20 years, we went from a place nobody would invest in to selling out residential units in minutes, to massive investments in transportation infrastructure supporting an innovation corridor,” Mayor Berry Vrbanovic said during a recent webinar hosted by the Urban Land Institute’s Toronto chapter.
Vrbanovic was a councillor for 20 years before becoming mayor of the city of about 250,000 residents in 2014.
He’s witnessed construction of the Region of Waterloo’s light rail transit system, the 2008 opening of the University of Waterloo School of Pharmacy in downtown Kitchener, the revitalization of an old tannery building into a tech hub, the redevelopment and repurposing of the former Kauffman footwear industrial building into residential units and more.
Kitchener sets table for new growth
The team at the Digital Kitchener Innovation Lab explores how emerging technologies can improve city services, including climate and air quality monitoring, multimodal traffic counting and asset tracking.
Vrbanovic said improvements to transportation infrastructure will continue. A $1-billion investment is being made to provide all-day GO Transit rail service between Kitchener and Toronto, recognizing the importance of the innovation corridor between the two cities.
The Make It Kitchener 2.0 strategy was approved in November 2020. Part of the plan is to contribute $80 million by strategically leveraging some of the city’s land assets, retaining commercial and residential units for future strategic use and reinvesting the proceeds of those sales.
This funding will support long-term investments in health innovation, creative industries, a startup network focused on the United Nations’ sustainable development goals for community vibrancy and provide affordable housing.
“We need to ensure a full range of affordable housing options, from supportive housing to attainable home ownership, which means thinking differently and tackling affordability straight on,” said Vrbanovic.
“Our ambition is to pioneer mixed-income, mixed-use communities through new investment models that enable the city to actively create affordable and attainable housing.”
In April, Kitchener was among the first municipalities in Ontario to change its zoning to allow for tiny and backyard homes. It’s estimated up to 25,000 properties could be eligible to be built under this zoning.
As the first major investment from the Make It Kitchener 2.0 fund, the City of Kitchener has partnered with the University of Waterloo to build a 90,000-square-foot innovation arena at the downtown Health Sciences Campus.
“By leveraging our strengths in innovation, technology, data communications and manufacturing, we believe we will emerge as a centre for health innovation and medical technology,” said Vrbanovic.
Communitech was founded in 1997 by entrepreneurs committed to making the Region of Waterloo a global innovation leader and helping tech companies start, grow and succeed. It has grown into a public-private innovation hub supporting over 1,600 companies — from startups to scale-ups to large global players.
“We’re making it cool to be a founder,” said Communitech marketing and events vice-president Saj Jamal. “’Don’t just get a job, change the world and create jobs’ was the mantra.
“So we did it by creating density and putting problem solvers together. They will start to collaborate and there will be inherent competitiveness.”
Communitech’s original goal was to support 100 companies, generate 2,000 jobs and attract $100 million in capital. In its first five years, Jamal said it generated 16,000 jobs. It attracted $800 million in capital in each of 2018 and 2019.
Its member companies have more than a million employees.
In the fiscal year starting in April 2020, 348 new companies were founded, the number of new jobs created rose to 22,400 and member companies now have more than 5,000 open roles to fill. Affiliated companies attracted $1.37 billion in capital, blowing past Communitech’s 2025 target.
Communitech attracted an additional $1.1 billion in new capital during the 30 previous days, according to Jamal, who said Kitchener is “home to risk-takers willing to make big bets.”
Maxwell Building Consultants
Momentum Developments was one of the first developers to build residential units on a large scale in downtown Kitchener and has brought almost 1,200 condominium units to the market.
“Kitchener was aiming to attract the very same target market that we were as condominium developers and the City of Kitchener was making a huge investment to make sure that it succeeded,” said Mike Maxwell, who co-founded Momentum.
Maxwell is now president of Maxwell Building Consultants, which provides development, construction management and consulting services for the residential construction market. Maxwell has a particular interest in affordable housing as supply lags demand.
“The issue of housing affordability is incredibly complex,” said Maxwell. “Land and construction costs are up dramatically. Design and approvals are taking longer and involve more parties and steps. Demand is increasing due to migration patterns and population growth.”
Maxwell said several solutions or programs are needed to continue addressing the supply issue and they need to be implemented quickly and in parallel.
“We are better off to have a partial solution that is 75 per cent correct and have it implemented in three months than to develop a solution that is 90 per cent correct but isn’t implemented for three years.
“This allows new programs and initiatives to be reviewed, improved, tweaked, enhanced, eliminated or doubled-down on, depending on their success.”
University of Waterloo
The University of Waterloo has 42,000 students, with its main campus in Kitchener’s neighbouring city of Waterloo. It has the largest co-op education program in the world and students graduate with up to two years of paid work experience. The university works with almost 1,000 local companies to place students in workplaces every four months.
University of Waterloo researchers work with local manufacturers and other businesses to help upgrade their operations. Its Velocity incubator is currently helping about 80 companies through providing business and product development support.
VP of university relations Sandra Banks said the City of Kitchener contributed land and $30 million in 2005 to build its School of Pharmacy. She expects Velocity to occupy one of the two floors in the new innovation arena, which will be located in a redeveloped warehouse, in mid-2023.
The innovation arena’s second floor will have shared collaborative space that will allow small businesses to interact with more established tech firms to solve health challenges. It’s also reaching out to medical schools, healthcare providers and health tech and innovation researchers.
“The mission of the innovation arena is to deliver new health solutions for practitioners and patients, taking a very different approach from traditional medical schools, because we don’t have one,” said Banks.
“We take a technology-first approach to solving both global and local health challenges, and a mission that will aim to deliver new companies, new jobs and economic growth for the region.”
Armen Bakirtzian was in his final year of engineering studies at University of Waterloo in 2007 when he created a product to make hip replacement surgeries more accurate. After winning the Next Top Young Entrepreneur Start-Up Pitch Competition in 2010, and securing an initial round of investment, Bakirtzian and two other entrepreneurs co-founded Intellijoint Surgical.
The Intellijoint HIP has been utilized by surgeons in thousands of procedures in the United States, Canada, Australia and New Zealand. Intellijoint Surgical is expanding into other areas, including knee arthroplasty.
The company has raised more than $50 million in capital and has almost 100 employees.
Intellijoint also spearheaded the creation of Medical Innovation Xchange, Canada’s first industry-led hub dedicated to helping medical technology startups scale successfully. It’s located in a 30,000-square-foot facility on Wellington Street in Kitchener.
“I’ve always believed that Kitchener-Waterloo has the potential to be a powerhouse of domestic medical technology companies,” said Bakirtzian. “Intellijoint’s story speaks to this belief from day one.
“Our region is uniquely positioned, equidistant to Toronto, London and Hamilton, giving us access to amazing clinicians and academic hospitals, and of course the heart of our ecosystem, the University of Waterloo,” said Bakirtzian.
“Intellijoint has proven that you can build a global medical technology company from Kitchener-Waterloo. And with the continued investments we are making in the innovation arena and a strategic focus on health innovation, our potential as a region has only gone up.”