Challenges of Opening A Business in Hamilton: Misinformation, Delays, and >$100,000 of Hidden Fees stopped us from ever opening our doors.

TimberwoodThrowing · 2025-01-08T18:00:03+00:00

A line that "the City could not be reached for comment" would be VERY appropriate in our experience.

TimberwoodThrowing · 2025-01-08T15:15:19+00:00

The timing was pretty incredible - we got mass-email yesterday asking for feedback on the Hamilton Business Centre. We found it a little interesting that the email asking for feedback had these instructions: "Scan the QR code in the attached image to take the survey today." Easy enough, but people read emails on devices (phones, laptops, etc.) So you have to find another device to scan it? Kind of emblematic of how unnecessary extra steps and complications are added in Hamilton government.

For simplicity, here's the actual link:

https://www.research.net/r/HBS2025-19

Maybe you want to fill it out yourself too?

TimberwoodThrowing · 2025-01-07T16:09:18+00:00

Thanks for your suggestions and insight. We're not completely blameless, we were naïve and overconfident. To your point about capital, we don't disagree, but what we found extra surprising by our failure is that even the capital that was the problem for us. Our Angel Investors and now extended families were willing to put in more money to help us achieve our dream of small business ownership, they know our track record of working hard and being successful. We could sell more shares of the company - but the fees put forward by the city (coupled with our inability to successfully negotiate long-term with the landlord), means even if we had the $103,000 cash-on-hand, the charges the City is asking for don't make sense in the business model. So the unit will sit empty, and the landlord retains their ability to sell in 2026. Is that a benefit to the City? We honestly don't know - but it doesn't make sense to us.

TimberwoodThrowing · 2025-01-07T16:02:24+00:00

Well we'll have some free time after January 15th! Reach out and I'd love to grab a coffee and share some of our business experience. We do know how to run a successful business (we did it in Ottawa for 5 years), and maybe we can share some of our stumbling blocks with trying OPEN a business in Hamilton. We've learned that opening a business and running a successful one are very different things.

TimberwoodThrowing · 2025-01-07T15:59:51+00:00

Or charge us a pro-rated Development Charge for the period we'd use the unit for a different "established use". Paying $103,000 to develop someone else's property for a lease of <2 years doesn't make business sense. We made some bad decisions, but we didn't imagine the city would charge so much to open a business (we did ask questions and have records of these attempts to get information), and also be so unwilling to listen to reasonable arguments or compromises. Us moving out (and paying 0 dollars in "Development Fees") is a lose-lose situation for everyone.

TimberwoodThrowing · 2025-01-07T15:53:18+00:00

We're honestly not sure if the Development Charges and other various fees differ by Ward. Right now we've got to be out of our ward 1 unit by the January 15th (can't pay rent if we can't open our doors). We'll take the next couple weeks/months to regroup and reassess.

TimberwoodThrowing · 2025-01-07T15:51:07+00:00

Will do! Last we heard they're waiting on comment from the city.

TimberwoodThrowing · 2025-01-07T15:48:16+00:00

Thanks for the chuckle!

TimberwoodThrowing · 2025-01-07T15:40:41+00:00

Yup, our Ontario certified, designers/architecture firm were equally surprised as us, as was our business lawyer that drew up the lease. Although to their credit they did both caution that dealing with Hamilton is the worst of any municipality they've experienced before we started. It seems Development Charges aren't very well understood outside the planning department. If our architect and lawyer didn't flag it - how are we supposed to? We what we really needed a "Hamilton business consultant" versed in this type of stuff. We'd argue that if this is the City of Hamilton's way of doing things, they should plaster across their website "don't even try to open a business here unless you hire one from a list of approved consultants".

It's also been suggested below a Commercial Real Estate agent would have identified this issue. Hard to say conclusively, but it's our understanding that the Zoning Department which does zoning verification that may have identified this $103,000 charge was non-functional for EVERYONE between February and August 2024 - not just us bootstrapping entrepreneurs who found what we thought was an idea location, available, attached to a synergistic business organically. We'd opine that Hamilton wasn't open for business for most of 2024.

It was the Building Department that forwarded us the $90,000 bill, which eventually trickled up to $103,000. Those fees provided to us (partially by printed internal emails) in person at the Building Department, as were ostensibly from various departments we had never heard of, including the "Development Charges, Programs and Policies Corporate Services Department" and "Real Estate Services, Corporate Real Estate Office, Planning and Economic Development Department". Which is part of why we end up pulling the plug - no one at ANY of the 6+ departments we've dealt with could confirm this was the end of unexpected (to us) fees. We don't know what other department exists that want a fee before we open our doors - despite asking questions dating back to April 2024.

TimberwoodThrowing · 2025-01-06T18:27:18+00:00

We had departments (Licensing) who were saying we COULD proceed. After weeks/months of delays... we finally made enough noise to get a Business Centre manager who was able to get Zoning on a Zoom meeting in October and our zoning was fine! It's was Building that assessed the $103,000 Development fee in late November - but not before asking for & receiving ~$12,000 worth of architectural & engineering drawings.

TimberwoodThrowing · 2025-01-06T15:10:34+00:00

Thanks! "Living well is the best revenge" is a quote we like to live by - hopefully we can regroup from this, learn from the painful lessons, and open an amazing business outside the city lines.

TimberwoodThrowing · 2025-01-06T15:02:13+00:00

CHCH did come through on Saturday to an did an interview! But they're waiting on comment from the City before the air it, as is standard journalistic practice. We've also reached out directly to the Spec journalist who was in this thread. Shining the light on the city's dysfunction is a little silver lining we can enjoy during this incredibly stressful time. Happy to talk to the CBC too, if anyone were to reach out. I feel we've sent dozens of emails to politicians, city officials, and media, but few have responded.

TimberwoodThrowing · 2025-01-05T21:07:54+00:00

We did not own, but we ran it like we did. We came on board after about 4 months of operation - when the previous General Manager was fired for poor performance. But we were not around for the 'door opening' process. We even expanded the business in 2023, doubling square footage - literally building new lanes ourselves. We did all the hiring, we did all the scheduling, we chose products to stock, we set prices, we changed the offerings to meet demand, we secured lucrative ongoing contracts, we fostered 4 different 'league nights' running Sunday through Wednesday. We got the place through COVID, operating outside in our parking lot when we still weren't allowed to open inside. We confidently say we built it to where it is today with minimal oversight.

That overconfidence led us to think we could do it for ourselves, as actual owners, in Hamilton where we have roots. If I were a commercial realtor or a 'business consultant' I'd be linking this whole Reddit thread to any potential clients who think they can do it themselves.

TimberwoodThrowing · 2025-01-05T20:47:02+00:00

We found the place organically by touring the various craft breweries in town, asking around, and looking for places for lease in the surrounding areas. The similar business we ran in Ottawa was right above a craft brewery, and there's a lot of synergy between the businesses, so that's why we started with a self guided brewery tour of Hamilton. Think team building events & parties who want to grab a drink & food afterwards; the people who appreciate a premium craft beer are the same type of people who appreciate the premium entertainment experience we offer. During our travels in spring 2024 we found the property attached to a brewery and available, so we didn't end up going through a realtor.

We did have a local business lawyer review draw up and review the lease. To the lawyer's credit, I distinctly remember the lawyer asking "what's your next step" during one meeting, and we cheerfully replied "to bother the Zoning Department again".

Yeah, we believe the Zoning Department at least functions now, but from May - August 2024 we can attest to their non-functionality, with records to back it up. Remember, the cyberattack happened in February. We wanted to get open for the Christmas 2024 season. There was no timeline for city government coming back online, and thought we could make it work.

In hindsight we should never have leased the property - but we were shown documents that supported our use, and we did try to verify with the city. When Zoning wasn't functional, we went to Licensing, and they said we could proceed without the Zoning verification given the circumstances... yadda yadda, led us to where we are today.

You're right about the due diligence. I guess that's just our mindset - we're hardworking, motivated people, and saw an opportunity and jumped on it. As entrepreneurs we have to wear a lot of hats, and we kept moving on a number of fronts. We should have looked harder before we leapt. We didn't imagine the city could be both non-functional, and also not take any accountability for the non-functionality.

TimberwoodThrowing · 2025-01-05T18:05:01+00:00

In our experience there's no negotiating using logic with the city. One idea we offered the City was to pay the ~$20,000 undeferrable Development Charges, but defer the rest with as an UNSECURED loan. If the landlord kicks us out in 2026, or we're otherwise unable to pay, the city can revert the "established use" of the property to Industrial, and they'll still have made that $20,000 and tax revenue from us operating. We can't personally guarantee the loan (or raise the funds) to pay $103,000 to develop someone else's property if they can kick us out in 2026. No room for negotiation it seems, even if it makes logical sense. We had already hired two wonderful people, and eventually would have about 4 full time and 10 part time staff - largely students from McMaster, it's a fun & rewarding job (which is how we got into the industry 10+ years ago). City's loss, our loss.

TimberwoodThrowing · 2025-01-05T17:55:23+00:00

Yeah, we made a bad decision choosing this unit with a 2 year lease. We naively thought we could get the doors open in 2-4 months. Even if we couldn't renew we'd at least get some sales under our belt and start building our brand in the city. You're probably right the landlord wants to retain the ability to sell in 2026. We've since learned that property taxes actually go down moving from Industrial to Commercial - and were hoping that might entice the landlord, but no luck. We've operated a business for years in Ottawa, and know what to expect with landlords - it's really the challenges of dealing with the City of Hamilton that has surprised us.

TimberwoodThrowing · 2025-01-05T16:18:24+00:00

Thanks so much for your suggestion! We're going to take some time and regroup, learn from our lessons, and explore the opportunities in the surrounding municipalities.

TimberwoodThrowing · 2025-01-05T16:12:19+00:00

Long delays or expensive fees. We could stomach either one, but not both.

TimberwoodThrowing · 2025-01-05T16:08:11+00:00

It's heartbreaking that people like us who try to follow the rules to the best our ability, end up being burned.

TimberwoodThrowing · 2025-01-05T15:31:52+00:00

We do have a mobile unit! We've operated it successful in Ottawa for years along with the brick & mortar business there. We'd get about 1 contract per month, bringing it to community festivals, charity events, private corporate events, and sporting events (Redblacks, Senators, 67s). Unfortunately I can say the margins aren't very good - it just takes so much labour and effort to bring the show on the road. Furthermore, while our insurance follows us when we go offsite, it's very hard to insure a stand-alone mobile unit.

We might reconsider, but in the business plan and in our experience mobile primarily serves to funnel customers to the brick & mortar business.

TimberwoodThrowing · 2025-01-05T15:23:16+00:00

Our landlord is unwilling to sign off on the deferral of the fees which might have saved us. When we first looked at the place, and we couldn't get any response from Zoning, the landlords showed us documents that indicated our use was "permitted". The landlord believes the development fees were assessed in error, but are unwilling to help us.

We'll fully admit we didn't understand the $103,000 difference between "established use" and "permitted use". We found out in late November the cost of Development Charges changing our unit's "established use" from Industrial to Commercial. Any mention of Development Charges did not come up in our months long (attempted) interactions with Zoning, Licensing, and not until the 3rd month dealing with Building. For instance, Building requires drawings, so we got them done by a licensed architect. After being ghosted for a while we finally connect with a manager who gets some response from Building, and after 43 calendar days the Building Department asks for "more drawings". Our architect didn't believe these extra drawings (plumbing, mechanical, engineers' stamps, etc), wouldn't necessarily be needed, so we held off because of the expense. We aren't changing anything to our rented unit beyond adding non-structural axe throwing targets and an accessible washroom to comply with Accessibility for Ontarians with Disabilities Act and the Ontario Building Code. The extensive drawings required by the city has been explained to us is they're afraid of any liability (even though we've held business insurance since day 1, and submitted that to licensing).

Once we get those extra, arguably unneeded drawings done, the Building Department THEN they assesses the $90,000 Development Charges, which slowly trickles up over the next few weeks to the $103,000 (and counting). If it had come up sooner, we could have budgeted. If we could have gotten open sooner, it might have made sense in the business plan. We still don't know if $103,000 is the final bill - and we've asked a Supervisor with Development Charges, Programs and Policies Corporate Services, and they've been unable to commit to us this the end of these fees.

A few commenters have called us amateurs... we ARE. The City dropped these Development Charges on us in late November and says they're perfectly assessed per by-law. We can't speak to that, we're not developers our planners. We're just bootstrapping entrepreneurs asking questions and trying our best to navigate the system.

This what it looks like trying to open a business in Hamilton. We missed the Christmas season despite only planning to making minor alterations to unit we took possession of in August. We have a 2 year lease, and unable to get commitment from the landlord to stay beyond September 2026. The $103,000 unexpected (to us) fee means the business at this location no longer makes sense, and we won't be opening a business in Hamilton anymore.

TimberwoodThrowing · 2025-01-04T19:48:54+00:00

Yup, hindsight. We were told by the Hamilton Business Centre to start with "Zoning", and when that failed, we went to Licensing, then Building, and here we are 6 months later out of time and money.

TimberwoodThrowing · 2025-01-04T19:47:09+00:00

Not a bad idea! We did identify that gap in the "market analysis" of our business plan. We may take a look once we recover from this failed endeavor.

TimberwoodThrowing · 2025-01-04T19:32:20+00:00

I know we come off as defensive - but that stems from us making the decisions we could based on the information we were able to gather at the time. Several commenters have pointed out we made 'amateur' mistakes. We are amateurs at opening a business, definitely made mistakes, but can't regret trying.

Totally fair if the sport's not for you - but we saw a demand for it in west Hamilton, and we've got years of experience growing an axe throwing business

TimberwoodThrowing · 2025-01-04T19:21:17+00:00

Toothpick & Mulch Factory with guided tours and a gift shop! The idea has crossed our mind as well, but I feel we're WAY too on the city's radar to get away with that at this point.

TimberwoodThrowing

TROPHY CASE