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City council delays, for third time, support for Building Hope project

Group asked to explore options to fund $600,000 in site security deposit; 'I would prefer ... not to put the taxpayer at risk,' said Coun. Emond
wagner and lauer at council
Coun. Tim Lauer, left, and Glenn Wagner, co-chair of the Building Hope campaign, chat during a 10-minute recess before council discussed supporting the campaign Monday night at City Hall. Dave Dawson/OrilliaMatters

The third time was not the charm for backers of the Building Hope project Monday night.

A final decision on the measure of municipal support for the ambitious $14-million project - which includes a community hub and homeless shelter for men, women and children, in addition to supportive housing and, eventually, affordable housing - has been delayed once again.

On April 2, council was asked to waive the development charges for the project, which are estimated to be about $408,000.

At the same time, they were also asked to waive a security deposit for site servicing of the project - a fee estimated to be about $600,000.

While generally supportive of the project, councillors asked for a staff report on the implications of granting the requests.

However, at their subsequent meeting April 9, Coun. Ted Emond accused the Building Hope proponents of “manipulation.”

He was referring to project chair Glenn Wagner’s pitch to council in which he said one of the conditions of up to $6.2 million in funding from the Canadian Mortgage and Housing Corporation (CMHC) was the waiver of development fees.

Emond disputed the assertion that the waiver was a condition and said he wished those who made the pitch “had been more forthright and up front about what they were saying.”

Councillors then decided to delay a decision so that a meeting could be held with County of Simcoe staff and Building Hope officials and city councillors to get more clarity on the issues.

That meeting was held last week and was “positive.”

As a result, after much discussion, council on Monday night agreed to waive the development charges (up to $450,000 so that interest could be factored in).

However, they did not agree to waive the site service security deposit - at least for now.

Rather, at the ardent urging of Emond, council asked Building Hope officials to investigate ways of paying the fee - and to report back to a special meeting of council on May 27 at which time a final decision would be made.

Emond said the city has “never before” waived the security deposit for a project. He said he was concerned about setting a precedent and noted the city would be on the hook if the developer did not live up to the city’s requirements.

“Things do happen. Suppliers go bankrupt and leave developers stuck and, ultimately, the city would” be responsible, said Emond, while stressing he believed such a result would not be intentional.

(The site security fee is used if the developer does not meet certain city guidelines related to water and sewer infrastructure and landscaping. If there are no problems, the security fee is returned to the developer. If the developer does not provide the fee, the city's only recourse, if there is an issue that can't be resolved, is to pursue litigation.)

Emond suggested Building Hope officials look at options such as obtaining a bond or “having individual supporters” guarantee a bond.

“I would prefer, as a representative of our taxpayers, not to put the taxpayer at risk,” said Emond.

Wagner, who stressed he and his volunteer group were thankful for the city’s support, was skeptical the three-week timeframe would allow serious progress and was frustrated by the last-minute delay.

He said the earlier delay was meant for “due dilligence” yet “not once (did councillors) ever ask a question about the site servicing” security, said Wagner.

He also said Emond did not make any attempt to talk to him about the issue “which is kind of strange now that we have another delay. So, I am a little surprised at that.”

He said the suggestion that officials ask the contractor to provide the secuity is a non-starter. The group has not yet put the project out to tender; there is no contractor.

Wagner said a financial institution is not likely to open their vault as the group is “a small non-profit” with little collateral.

Wagner added their primary asset, the building in which the Lighthouse operates on Peter Street, is worth about $250,000. However, it’s encumbered as it was used to secure a loan from the CMHC to help the group with cash flow.

And it’s cash flow that’s the issue, stressed Wagner.

The building permit for the first phase of the project, the supportive housing units, is expected to be issued in three weeks. At that time, the group must pay the development charges (which will be deferred and ultimately paid by the city) and the site security fee.

“If we have to (pay the) $600,000, that will drain our bank account,” said Wagner. “It would stretch us. It will make it tough.”

Wagner also bristled over a 10-minute debate at the end of the 90-minute, at times tedious and laborious, process council worked through on the issue. 

That contentious debate was sparked when Coun. Jay Fallis asked for support from his colleagues to remove the word ‘final’ from the motion.

Essentially, Emond suggested the word be in an amendment he received support on, stipulating council’s $450,000 support to cover development charges be the “final” support from the city for this project.

The second-term Ward 1 councillor gave a lengthy speech about competing demands from social service agencies and noted the city already supports that sector to the tune of a $6 million annual investment in County of Simcoe social services.

He said the word “final” was important as this latest support, coupled with earlier support, would be the “maximum amount they should expect from taxpayers for the project” on Queen Street.

“This is the third time Building Hope has come to us for a request for funding. I’d like it to be the last time,” said Emond.

“We have gone a long way beyond what in my mind is where we should have gone on this project,” he said. “Lets’ hope they can pull it together and make the project work for all of us.”

Wagner had a different outlook. He said his group came to council once “of its own volition” and the two other times were dictated by conditions from various levels of government.

He also stressed that having a service such as the Lighthouse and, eventually, Building Hope, saves the “community millions of dollars” each year.

“We continually raise funds for this community … and do the best job we can and have not been to council once to ask for operational funding” for the Lighthouse, said Wagner.

“With this type of legacy project, (with) almost $10 million from other government agencies, to suggest the city, because they give to the county, shouldn’t at least consider chipping in … it just seems strange,” said Wagner.

“It’s not that big of an ask compared to what we’ve done and what we’ve got from other government agencies.”

Coun. Tim Lauer made that case at the council table and said council should not be worried about setting a precedent. He said if another agency comes to the table and brings $10 million in government funding, they could ask for the same concessions.

“I’m aware this is a unique situation,” said Lauer. “I believe it would reflect well on us to adapt and accommodate” the request.

In the end, however, only Lauer, Fallis and Coun. Mason Ainsworth voted against the motion, while the rest of council supported it, forcing the group to look for options and return to council May 27.

 




Dave Dawson

About the Author: Dave Dawson

Dave Dawson is community editor of OrilliaMatters.com
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