County to explore five expressions of interest for former Queen Elizabeth school

By Sharon Harrison
At a special committee of the whole meeting Wednesday evening, council learned more details about Queen Elizabeth School re-development partnership expressions of interest and recommended next steps.

Five expressions of interest were received by the County during the one-month process (June 21-July 19), from New View Holdings, Sterling Group, Port Picton Homes/Cleave Group, A3 Partners, and Quinte’s Isle Non-Profit Housing Corporation (see full details on project ideas below).

Adam Goheen, the County`s director of housing described the EOIs received as “above and beyond what we expected from the partners. It’s great to see that level of idea being generated”.

Two main objectives were required to be met: to include an affordable housing component, and rental space for a community hub, in the County’s search to find a private party or non-profit investment partner, where Goheen explained that an EOI is typically a precursor to a more structured, formal agreement.

“The purpose of the initial screening was to ensure that potential partners possess the experience, capability and resources to undertake this scale of re-development project,” explained Goheen in his report. “While not all submissions were as detailed as others, the review team ultimately recommended that all EOI submissions undergo a secondary review and be presented to council.”

In an unexpected development, the County’s application to the federal housing accelerator fund – for funds required to purchase the property and undertake improvements to convert the existing school building for tenancy – was not successful, which meant the municipality, having since purchased the property on the recommendation of staff (in April 2024), now requires an avenue(s) of external investment (either a private sector or non-profit investor to partner with the County) to proceed with the proposed project.

Located at 35 Barker Street in Picton (with frontage on Elm, Centre and Barker Streets), the objective behind the purchase of the 1.8 hectare property was to re-develop with affordable housing units in mind, “to provide as many affordable housing units as possible”, as well as providing rental space (of up to 37,000 square feet) for community-based agencies.

The municipality is also looking to recoup its original investment of approximately $1.5 million in the 2024 calendar year. The County has invested $1,475,127 in the property, so far.

The special meeting, open to the public – originally to be a closed meeting – saw four members of the public provide comments, as well as hearing lengthy debate from many members of council that included discussion on whether the County should simply sell the building (or sell the land and keep the building), to a wish list of wants for the site, and whether all five EOIs should be pursued, with some suggesting a few of the less-detailed submissions not be pursued at this time.

“We are at a great space here in this community and we are actually seriously considering a very important development in our community,” reminded councillor Phil St-Jean. “I think there has been a little bit of slight misunderstanding in our community with where we are at with the process, and I just want to reassure everyone that tonight is just the first step of a few as we move forward to this process of identifying the best and most appropriate use of the Queen Elizabeth property that this council approved purchasing back in May.”

Councillor Sam Branderhorst said she was “oddly surprised” by the EOIs and the ideas received.

“I think what we are getting is not quite a sell-out if we are getting 50 per cent affordable housing, with a chance of RGI (rent-geared-to-income), that’s a win,” said Branderhorst, who also added that Quinte’s Isle Non-Profit Housing Corporation (QINPHC) “had piqued her interest 100 per cent”.

“They say they need a developer’s help, and I would like to see staff work with QINPNC to team-up with a potential developer,” she said. “They have showed great support for our community, and they have shown time and time again that they can work efficiently with RGI and affordable properties and manage them well, and they have proven to work well with other community partnerships.”

Councillor David Harrison about the economic impact if no agreement was reached by year-end. Goheen stressed there is an urgency in moving the project forward to get the $1.5 million back, and how time is running out.

“We don’t have that luxury of rolling it over [to 2025 budget] as it would represent a significant increase in taxation potentially, or we would have to find the money somewhere,” Goheen said. “If it means to sell it, we sell it, before the end of the year.

“We had not budgeted for this, we had expected the funding to come from an external source. We don’t have the money in our reserves to pay for this, we can’t go it alone, we need funding through an investor,“ he added. “The five were variable in what could be done, and we have a number of different approaches of what could be done.“

County CAO Marcia Wallace indicated if no agreement was reached by the end of the year, the levy to taxes would be three per cent (on $1.5 million), as a worst-case scenario.

“If we were in this worst-case scenario, the treasurer would have to look to see if there are any contingency funds we could use to balance budget,” she said. “In the absence of sufficient contingency, we would then have to look to the levy.”

Councillor Nieman said he was “not thrilled with giving up ownership of that property”, where he asked whether the property could be used for municipal office space to cut costs. Wallace reminded the direction from council had been for a community space, not office space.

Comments from the audience spoke to what the guiding principles for the development would be; not giving up on a space that improves the community and enhances the neighbourhood and concern over the level of intensification and high density.

David Middleton said he was impressed with the social hub idea when it first came up, but “was very sad to hear that it wasn’t going to go forward because of lack of funding”. He noted the guiding principles should be that the surrounding neighbourhood should be involved, that it enhances the greater community, includes desperately-needed affordable housing and includes a community garden.

Hirsch said he would like to see as much of the 30,000 square feet, that the tenant selection committee suggested, be preserved as possible, “I think 12,000 square feet is too low”.

Goheen provided an overview, context and background, noting over time, “a plan for its re-use has come into vision, being the potential for this community services hub, a rental space for these agencies to operate in a central location, and also the development of affordable housing.”

“There is significant potential for this property to be reanimated for the betterment of the residents of Prince Edward County, in terms of centralizing various services in the areas of healthcare, youth and childcare, housing and food insecurity, education and training, among many others,“ noted Goheen in his report to council. “As well, there is the opportunity for new much-needed affordable housing units that would be located in the heart of a walkable area and surrounded by services, commercial areas and employment opportunities.”

Next steps in the process is to invite the partners to refine the proposals by Nov. 1, with early public engagement (early September), where it is expected the item will come back later in the year for council decision with a final staff recommendations (proposed for Nov. 14 council meeting) to allow for an agreement to be in place before the 2025 budget deliberations begin in December.

“We want to hear from the neighbours,” said Goheen, “We understand this level of intensification is significant, we definitely want to make sure we hear from the community in how this project should come forward and be refined.”

Documentation relating to the decision by the County to purchase and re-develop the former Queen Elizabeth School site, including the expression so interest, can be found on the County’s website.

The decisions made at this meeting are to be ratified at the next council meeting (Aug. 27).

Below is a summary of each of the five expressions of interest, along with staff recommendations:

New View Holdings
New View Holdings proposes to purchase the property, with no conditions, for $1.5 million, as outlined in its “very detailed submission”, one that would include the removal of the existing school building and come with the construction of three, four-storey residential buildings comprising approximately 246 units, with a 207-stall surface parking area within an internal court.

“The plan would include 50 to 60 per cent market-rate rental units and the remaining 40 to 50 per cent (approx. 98-123 units) would be affordable and supportive housing, to be managed by their in-house affiliate. “

“Over 100 units of affordable. I would say it’s a game changer in the County, it’s a great number, it’s much needed,” Goheen said.

A new community hub would be created with a floor area of approximately 12,000 square feet, with rent at-cost.

“New View would work with the County to select community agency tenants and the space would be leased at cost with no profit to the developer”, noting a potential occupancy date of November 2027, dependent on when a re-development partner is ultimately selected by the County.

Noting 25 years of development and operation experience in the housing sector, across the spectrum from market, to affordable, to supportive, with strong corporate and social values, New View is currently working to advance two other mixed-market housing projects in Picton.

Sterling Group
Sterling Group’s proposal suggests partnering with the County to re-develop the school property and proposes to explore opportunities for the adaptive re-use of some or all of the school building into purpose-built mixed-market rentals, in addition to the construction of medium-density units on the surplus lands.

The conceptual site plan indicates 234 units (124 and 110 over two phases), with on-site parking on a one-to-one basis.

Sterling’s offer to purchase the property, for $1.5 million, comes with a 60-day due diligence period, and suggests a closing date of Dec. 1.

The EOI mentions the provision of rental space for community-based agencies.

“The Sterling Group highlights their decades of experience in the construction of new homes and commercial properties“ and currently has a residential development project underway in Wellington

Recommendation:
In his report, Goheen notes how the New View Holdings and Sterling Group EOI submissions are very detailed and well thought out, and the firms are experienced and have the capabilities and resources to implement their plans, which align very well with all four of the stated objectives.

“From a technical perspective, there is additional assessment work to be undertaken from land use and infrastructure perspectives to ensure the property and surrounding area can support the level of density being proposed,“ stated Goheen.

His recommendation is for New View and Sterling to be invited to engage in further discussion with housing and development services staff to refine their proposals.

Port Picton Homes and Cleave Group
“Their EOI submission did not lay out a plan about how they could realize council’s vision for the Queen Elizabeth School project,” noted Goheen, saying Port Picton Homes and the Cleave Group are local developers and property managers.

No indication as to the number of affordable housing units, or the amount of floor space for a community hub were provided by Port Picton Homes, and they did not indicate a purchase price suggestion for the site, or any timeframe for the project.

“The firm possesses the team, local contacts in the community agency space and other resources to complete the re-development project.“

Recommendation:
Goheen noted that the EOI lacked detailed information about a plan that would meet the project’s objectives, but did recommend Port Picton Homes and Cleave Group be invited to engage in further discussion to further develop their proposal.

A3 Partners
The proposal submitted by A3 Partners is a little unusual as they suggest negotiation with a deal that also involves a separate piece of property they propose to develop located in Wellington, something Goheen said may complicate things. The A3 Partners proposal is to create a private-public partnership with the County than spans both Wellington and Picton projects.

The 70-acre parcel of land in Wellington (along the village‘s eastern boundary), owned by A3 Partners, “which they have conceptualized a unique fusion of residential and agricultural development called an ‘agri-hood community‘, where a key element of the development is the provision of affordable housing“.

Goohen notes in his report that the Wellington property is located outside the current settlement boundary of the village of Wellington.

“In exchange for assistance in opening their Wellington land for development (which would require a settlement boundary expansion), A3 proposes to purchase the Queen Elizabeth school property and lease it back to the County for one dollar for a period of two years.“

He explains that the County could then implement the community hub as originally envisioned, adding that A3, in partnership with TAS Impact, “would determine a plan for affordable housing at the school site in consultation with the County, and their Wellington site would see the required land use planning changes to allow their development to proceed“.

Speaking to the condition of expanding the boundary on Wellington, councillor John Hirsch said, “I would be very cautious about approaching that, and to me that can only be considered if we were to somehow reduce the other areas, so probably not a good concept.”

At the end of the two years, subject to the objectives of the partnership being achieved, the County would have the option to re-purchase or continue in a lease arrangement.

Goheen noted that A3 Partners provided no estimate of affordable housing units proposed for the school site.

Councillor Prinzen spoke to red flags.

“I have a hard time with, ‘I want to help you out, but you’ve got to help us out first’ expressions,” said Prinzen. “I ask for caution with some of them; I don’t think they all are worth coming back.”

CAO Wallace spoke to the proposal for request for a trade of some sort, indicating that there are some legal limitations to what can be done.

“You can’t bind a future decision. In order to do that, you would need to make a change to secondary plan and our official plan, that would require ministerial approval to prove you are not overpopulating the area,” said Wallace.

Recommendation:
In his recommendation, Goheen notes two challenges, one being that significant investment would be required in the existing building to prepare the space for tenancy (where he noted how there is no apparent source of funding available to accomplish it).

“The second challenge is that A3s Wellington property is outside the boundary where development is currently permitted,“ he said. “The A3 Partners EOI proposes a partnership that would provide affordable housing beyond the Picton site and would permit the community hub concept to be implemented within the existing school building according to the original plan. “

Goheen recommended that A3 Partners be invited to engage in further discussion to further develop their proposal.

Quinte’s Isle Non-Profit Housing Corporation
The fifth and final EOI received came from Quinte’s Isle Non-Profit Housing Corporation (QINPHC), who indicated they are interested in new non-profit social housing stock with ownership and/or operation of deeply-affordable housing units (with funding through PELASS to support the RGI model). It was noted that they welcomed their first tenants at a 42-unit townhouse development on Richmond Street in Picton in 1993, with units rent-geared-to-income, supported by Prince Edward-Lennox and Addington Social Services.

Their vision includes the provision of supportive or special needs housing in partnership with the Community Living Prince Edward, Alternatives for Women, and the Prince Edward Learning Centre. QINPHC also suggests that some community hub space could be provided within the future development

In order to carry out the proposal, QINPHC acknowledge they would require a land development partner.

Recommendation:
Goheen notes that the QINPHC EOI goes further than the others in terms of affordability of the future housing units, beyond the County’s definition of affordable housing, and into the deeply affordable and supportive housing realms.

“While there is no question that housing across the non-market spectrum is a critical need within Prince Edward County, Quinte’s Isle needs a development partner in order to further structure a business plan.“

He suggested there is an opportunity for the County to facilitate discussions between Quinte’s Isle and other EOI respondents to determine whether a potential partnership between the housing provider and a developer could be forged. Goheen recommended QINPHC be invited to engage in further discussion to further develop their proposal.