Innovation Event

TACKLING THE EOA MONSTER:WHO IS DOING WHAT AND HOW?

September 22, 2015

Partnerships & Leveraging Social Housing Assets

Bruce Hynes, Chairman of the Board

Marguerita Residence Corporation

September 22, 2015

Marguerita Residence Corporation

• Two senior non-profit buildings in Brockville

�Marguerita Building

�Maryanna Building

• Committed under Section 56.1/95 of the

National Housing Act

Marguerita Building

• 79 Units

• Built in 1980

• Operating

Agreement,

Subsidy, &

Mortgage expired

in 2015

(Church St, Brockville)

Maryanna Building

• 45 Units

• Built in 1984

• Operating

Agreement &

Mortgage expire in

2019

(Clarissa St, Brockville)

Marguerita Residence Corporation

• Well maintained and managed buildings

• Excellent financial track record

• Well funded capital and operating reserves

• Experienced, capable, stable Board of Directors

• Over 50% of units are Rent Geared to Income

- All covered by operating surpluses

- ie. No subsidy is received.

• Waiting list

– Over 200 applications on hand

– Not uncommon for an applicant to wait 5 years or more

Our Partners

Non-Profit Housing Provider

Wall Street Village Inc

United Counties of Leeds and Grenville

Infrastructure Ontario

City of Brockville

Our Partners

• 20 year initiative by Wall Street United Church to build

affordable seniors apartment building

• Through fund-raising and donations, acquired

properties on the site adjacent to the Church

• Both Wall Street Village and Marguerita have the same

objective: to build a new affordable seniors residence

in Brockville

• Land is to be sold from Wall Street Village to

Marguerita for $1

Wall Street Village Inc.

Our Partners

• Approved the allocation of 30 units of rent

supplement for the new building

• Also approved a loan guarantee for up to

$2.5m

United Counties of Leeds and Grenville

Infrastructure Ontario

• Lending program for social housing using

debenture issues to provide preferred rates

Our Partners

• Multi-residential taxed at single-residential

rate

• Community Improvement Program (CIP):

new construction taxed for 5 years at

current property assessment and potential

‘site-improvement ‘ grants

• Building will be exempt from development

charges (non-profit housing)

City of Brockville

Current Status

• Two members of Wall Street Village joined the

Marguerita Residence board in 2013

• In 2014, development committee formed comprising

members of both boards and a development

consultant (volunteer)

• CMHC approved $10,000 in 'seed' funding

• Site work completed

• Architect selected

• Building design finalized

Current Status

• Initial construction budget developed

• All zoning amendments submitted & approved by

City

• Obtained Rent Supplement commitment and Loan

Guarantee from UCLG

• Loan application submitted to Infrastructure Ontario

– not yet approved; in the credit review process

• Support from UCLG, City of Brockville, MP, MPP

• Extensive positive local publicity

Wall Street Village

• Six-stories, 85 units

• 32 one-bedroom units, 53 two-bedroom units

• Construction is concrete block and core slab

Project Costs

• Initial construction budget - $12.6 million (includes

5% contingency and 5% construction management

fee)

• Architectural fees, soft costs, and HST bring the total

to $13.5 million

Proposed Funding Sources

Source 1:

• 35 year mortgage on building at 48 Church Street

expired on 1 April 2015

• Was recently appraised at $4.1m

• Infrastructure Ontario loan requested for 70% of

that value, or $2,870,000

Annual mortgage payment $152,000

Annual subsidy $38,000

Net New “revenue” $114,000

Proposed Funding Sources

Source 2:

• The “as built” valuation of Wall Street Village

is somewhere between $10m and $13m.

• We have proposed a valuation of $10,840,000

to Infrastructure Ontario (to be negotiated

upon approval of our loan application)

• A 75% loan would provide $8,130,000

Proposed Funding Sources

Source 3:

• The two Infrastructure Ontario mortgages

would total $11,000,000

• Need a further $2,500,000

• Mortgage on Marguerita Residence's second

building on Clarissa St. expires 1 June 2019

Proposed Funding Sources

Source 3:

• Seeking a $2.5 million interest-only loan from

a lending institution to cover the interim

period from the start of construction until

June 2019, when the Clarissa building can be

re-mortgaged

• The UCLG loan guarantee will back this loan

Summary

The Wall Street Village proposal is possible

because of three key factors:

1. Availability of land and the common goals of

the Marguerita and Wall Street organizations.

2. Historic low interest rates.

3. The expiry of non-profit housing mortgages

committed 35 years ago.

Dealing with EOA… No Monster

• Huge non-event; no challenges to speak of

• Board has never considered changing its mandate

or philosophy; that was made clear to UCLG when

Rent Supplement was requested

• Absolutely no impact on our tenants

• Business as usual

• Only real impact is financial, and in a very positive

way (extra $100,000+/year with mortgage expiry)

• Critical to our plan for a third building

Thank you

Contact information:

Bruce Hynes

E-mail: brucehynes57@cogeco.ca