Joel Auge is about to hit play on a new business in Hamilton.
The 33-year-old already runs a 23-employee company in Toronto called HitGrab, which develops online games — think popular Facebook fantasy MouseHunt — for social networks.
He’s ready to expand into the mobile game market in a big way, but first HitGrab’s CEO wants to expand his virtual biz physically into Hamilton.
“Part of it is the talent pool … I don’t think very many companies are taking advantage of this particular talent pool in Hamilton,” said Auge, who hopes to scoop up between four and 10 talented programmers and designers — perhaps McMaster and Mohawk grads — before they “scatter” to other cities.
As a Flamborough resident, Auge is also looking forward to skipping the commute to his Toronto headquarters. “But to be honest, it comes down to cheap space, too.”
He’s part of a growing trend of business owners eyeing Hamilton as a potential relocation destination, according to city business gurus. “It’s absolutely happening,” said city economic development director Neil Everson. “Our last four years have probably been the best in the last 25 in terms of (incoming) companies and company expansion.”
Canada Revenue Agency statistics show Hamilton had about 350 more businesses in 2010 with revenues over $30,000 compared to 2009. They’re not all imports, of course. But Everson said their success breeds local startups and expansions, too. “It’s all part of a positive momentum for the city,” he said.
The city doesn’t specifically track transplanted businesses or out-of-towner expansions into Hamilton, but Everson can rattle off a list of the biggest without a second thought.
Canada Bread and later Maple Leaf Foods, its parent company, represent the biggest fish recently reeled in by the city following a countrywide consolidation. The bakery and deli meats plant will have combined to bring almost 1,000 jobs and $500 million in investment to the city’s Red Hill Business Park by 2014.
Tim Hortons opened a $30-million roasting facility in Ancaster in 2010, shortly before Winnipeg agri-food giant Parrish & Heimbecker signed a long-term lease to set up shop in almost 400,000 square feet of space on Pier 10.
The city’s “creative industries” are also luring new businesses every year, said David Adames, president of the Hamilton Chamber of Commerce, with 300 new arts and culture-related jobs created in the downtown alone last year.
Everson lists five reasons in particular for Hamilton’s success in luring out-of-towners:
Cheap, available property: The Real Estate Investment Network named Hamilton Ontario’s No. 1 place to invest.
Cost-competitiveness: It’s cheaper to set up and run a business in Hamilton. For example, wages must be higher in Toronto to account for higher cost of living.
Transportation: Easy access to railroads, the harbour, the airport and major highways such as the Red Hill Valley Parkway.
Quality of life: Don’t underestimate the value of uncongested streets.
Intellectual infrastructure: our post-secondary institutions, health research facilities and related incubation centres such as Innovation Factory.
Innovation Factory is dedicated to helping start and grow innovative new businesses, has 10 clients that have either recently arrived in Hamilton or are considering the move, said experience manager Tammy Hwang.
Several have moved from Toronto seeking cheaper real estate and a “resource network” of associated businesses, she said. One, a solar power technology company, started out in China but moved to Hamilton to better serve a slew of regional clients.
Proximity and affordability lured Stephanie McLarty, founder of surplus electronics resaler REfficient. McLarty said she started out in Mississauga, but got hooked on Hamilton after taking on a couple of area customers.
“Cost of warehousing space was huge for us. I’d say it’s 30 per cent cheaper here than in the rest of the GTA,” said McLarty, who set up shop here last year. With her business exporting more equipment to the United States, she also likes her location between the border and Toronto.
She likes the city, too — something she admits was a “pleasant surprise.”
That feeling of surprise, she said, might be one of the city’s big business challenges. “Hamilton still has that ‘dirty’ image that it needs to kick,” she said. “It’s important for my business, too, because it becomes an issue for me in attracting the talented employees I need.”
McLarty’s wish list also includes transit improvements, so she cheered the promised GO train frequency improvements on the horizon. “Whether you’re a business owner or a potential employee, you need to realize Hamilton isn’t actually that far away (from Toronto),” she said. “The better the transportation links, the easier it will be to recruit and keep people.”
What: Frozen food manufacturer, contemporary Asian cuisine, in Stoney Creek
Who: Helen Thieu
From there to here: Vietnam
When: Immigrated 2008, new manufacturing plant in 2010
What brings you to Hamilton? “I like the city very much, the convenience, everything is close, and traffic is good — we don’t have the problems, the (traffic) jams like in Toronto … I was going to go to Toronto, but I am happy here.”
What doesn’t? High property taxes
What: Surplus electronics resale, recycling and sustainability auditing services, on Sherman Avenue North
Who: Stephanie McLarty, CEO
From there to here: Mississauga
What brings you to Hamilton? “Cost of warehouse space was huge for us.”
What doesn’t? A “dirty” image problem the city needs to solve
What: Internet TV broadcaster and business training venture on the Mountain
Who: Mark Ironside
From there to here: Toronto
Employees: self-employed owner
What brings you to Hamilton? “The right space at the right price … I’m from Hamilton, so the idea of giving back was appealing.”
What doesn’t? City bureaucracy and “atrocious” taxes
Isis Digital Media
What: Mobile data collection solutions for health, education sectors in Waterdown
Who: Eric West, president
From there to here: Halton
When: late 2011
What brings you to Hamilton? “This was the perfect building, the perfect opportunity … it sounds silly, but this is the first office space I’ve worked in where I can actually open the windows.”
What doesn’t? Metered street parking in a small commercial core
What: Online marketplace and “matchmaking service” for gift cards
Who: Sean Snyder, chief “swap” officer
From there to here: Toronto
What brings you to Hamilton? “It was the economics. The cost of setting up a business, of doing business is less here, for sure.”
What doesn’t? Keeping valued employees from scattering to larger centres is a challenge
Hansen & Lubbers
What: Furniture and home décor store on James Street North
Who: Richard Lubbers and Craig Hansen
From there to here: Oakville (they still have a store there, too)
When: moved 2010, opened store 2011
Employees: 2 (owner-operators)
What brings you to Hamilton? “We moved here to live, so that was a big part of it … but we also wanted to be part of the James Street experience.”
What doesn’t? No beefs at the moment, but looking forward to GO Transit improvements
What: Online social game creator, branching out into mobile games
Who: Joel Auge, CEO
From there to here: Toronto (still has offices there)
When: Hoping for 2012
Employees: 23 in Toronto, between four and 10 planned for Hamilton
What brings you to Hamilton? “The talent pool … (and) it comes down to cheap space.”
What doesn’t? He hasn’t set up shop yet, so he doesn’t know
What: $30 million asphalt processing, shipping facility at Pier 24
Who: Kam Bhatia, vice-president engineering
From there to here: Toronto
When: Operations began 2011
What brings you to Hamilton? A great transportation hub. “Having that kind of transportation infrastructure is a key part of our business,” Bhatia has previously told The Spectator.
Chuck Gammage Animation
What: Animation studio on James Street North
Who: Chuck Gammage, owner
From there to here: Toronto
When: June 2011
What brings you to Hamilton? “I moved this way first, so moving the business meant less of a commute for me … Financially speaking, it was also a good move, because I can get more space for less.”
What doesn’t? Less frequent GO Transit to Toronto can be a “major drawback” for employees. He’s glad service is scheduled to improve.
What: Creates educational enrichment programs for kids, McMaster Innovation Park
Who: Mohan Nadarajah, CEO
From there to here: Toronto, Oakville
Employees: 17, full time and part time
What brings you to Hamilton? PlayLab partnered with Hamilton business development firm Trivaris. “We started finding more partnerships in Hamilton, with Innovation Factory, with Mohawk (College).”
Maple Leaf Foods
What: National food giant, building $395-million deli meats plant at Red Hill Business Park
Who: Michael McCain, president
From there to here: Consolidating plants across the country, including in Kitchener
When: plant should be complete in 2014
Employees: 670 estimated
What brings you to Hamilton? A central location, highway access and cheap land. “It fit perfectly for our business,” McCain told The Spectator last year.
What doesn’t? Maple Leaf abandoned a plan to bring a pork plant to Hamilton in 2005 in the face of resident opposition.
This article is for personal use only courtesy of TheSpec.com – a division of Metroland Media Group Ltd.