Council approves loan up to $5 million to move affordable projects forward

UPDATE: Council voted 9-5 in favour of  the request for a $5 million loan to support continued pre-construction activities, and the declaration of Projects of Community Interest for two affordable housing projects.

Much discussion ensued balancing the need to move forward years of effort and the need to be cautious and seek further options.

Noted several times was zero support from the federal government, and little from the provincial government.

“We are on our own,” said councillor Phil St.-Jean, chair of the housing board… People in our community need us to move forward on this. And yes, the board has, over a lengthy period of time, discussed all options… and over several months of trying to exhaust every opportunity. We are still working on all options.”

Councillor Bill Roberts agreed, noting the motion allows exploration of other options and respects the experts on the board and the staff efforts.

“To say nothing has been done? Who around here knows what it takes to actually get a corporation up and running? It takes time and it takes money – especially something of this scope. So much as been done behind the scenes. We are ready to succeed. Let’s do it.”

Mayor Steve Ferguson agreed that council should move forward after making a commitment years ago to affordable housing and “nothing has happened”.

“We have to start somewhere,” he said, adding the municipality will continue to apply for funding when it becomes available that could help purchase the Queen Elizabeth School property.

Councillors Harrison, Engelsdorfer, Braney and Pennell and Prinzen were opposed to the motion.

Director of Housing Adam Goheen stated the (now dated) costs are approximately $16-20 million for the development at Wellington; with about $450,000 in pre-construction costs; and $3.9 to 4.4 million for construction of Disraeli in Picton, with a pre construction cost of about $250,000.

It was noted effort would be put into the Disraeli project as the priority as it is the smaller, more quickly achievable project.

Director of Finance Amanda Carter, in response to a question, stated believes the municipality has the skills necessary to oversee and manage the loan in this one-off situation and expressed confidence it would be repaid. She noted in a worst-case scenario, liens on the property would apply and pay the debt.

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Housing corp seeks loan of $5 million to move affordable projects forward

With slow movement forward on affordable housing projects in the County, and the recent rejection of lifeblood funding from the Canada Mortgage and Housing Corporation (CMHC), council is being asked to approve a $5 million loan to allow two projects in the County to continue.

At council Tuesday night, council is being asked to approve the line of credit style loan, with an interest rate of 2.5 per cent for a five year term, to the Prince Edward County Affordable Housing Corporation (PECAHC).

Late February, after seven months of waiting, the County learned its application to the federal Housing Accelerator Fund was not successful. The $14 million application was to support a variety of needs, also including the redevelopment of Queen Elizabeth Public School – is not related to this ask for funding (except for some aspects of the Disraeli Street project). Council is to hear a report April 11 on potential solutions for that and other projects.

Meanwhile, the use of up to $5 million would be used toward PECAHC’s Niles Street Wellington, and Disraeli Street Picton projects.

“Staff have worked with the board and are recommending a ‘line of credit’ approach which will provide the flexibility of interim financing needed for pre-construction work,” stated Director of Housing Adam Goheen, and Director of Finance Amanda Carter in their report.

“Progress on the housing projects would slow considerably without a new and ongoing source of funding,” the report states. “While a loan could be pursued through the conventional banking system, today’s high interest rates would serve to raise the ultimate cost over the long term, a potential threat to a project’s viability.”

The report states the loan would not impact the County’s surplus/deficit situation as it would come from “idle cash” in the general bank account which typically used for low-risk investments such as GICs.

Council approved the formation of PECAHC in 2018 to increase the supply of affordable housing in the County.

The former Duke Dome arena at 230 Niles Street was demolished last June to clear the way for the development of a 36-unit apartment building along with four townhouse units.

Seed funding through CMHC was received and fully allocated to site planning, environmental and demolition.

Demolition began late March last year and was paused May 8 after some vermiculite asbestos used for insulation in the concrete blocks was found in the west wall. This asbestos material was not found during earlier abatement work in April. Demolition ceased while removal of the asbestos was conducted by a company certified to perform the removal.

Former Wellington arena (Duke Dome) demolished

Next steps for the Wellington site include completion of remediation work and of phase two Environmental Site Assessment, the submission of the record of site condition with the Ministry of the Environment, Conservation and Parks; and the retention of a consultant for detail design of the buildings and a cost estimate. All this work is currently without a funding source.

The 30 Disraeli Street Picton project had also received CMHC SEED funding to build 12 modular one bedroom housing units in a partnership project with Tyendinaga First Nations. The units are to be filled by youth on the housing waiting list with the Mohawks of the Bay of Quinte.

The project was first discussed in 2021 with zoning  approved by council in 2022 and construction was to start in 2023.

However, while the County has pipes in the ground, it requires ‘last mile funding’ of about $400,000 to hook up municipal services to the end of the street and extend roadwork to allow a snowplow turnaround.

Next steps include a consultant or construction manager to advance the detail design of the building and site (servicing, grading, landscaping, electrical). Once a cost estimate is made, an application through the CMHC Co-Investment Funding program can be initiated.

The report notes that while approximately $30,000 of the CMHC SEED funding remains, the amount is not sufficient to advance the project to the construction ready stage.

PECAHC is also asking council declare the two “Projects of Community Interest” which allows avenues for fundraising campaigns, the provision of community bonds, sponsorships, or other approaches as determined by the new PECAHC Board’s Community Fundraising Working Group.

Council meets Tuesday at 7 p.m. in Shire Hall.