Submitted by Eric Moschopedis on behalf of Planning and Development
Hello neighbours,
So sorry for not being in touch with you all more over the last while. There have been some strange developments and some exciting work to share with you. Please see below:
Relationship with Urban Matters
Over the past two months there were some things happening that, for a while, looked like they were going to have some negative effects on our project, but they have been resolved and we are back on track. In October, Planning and Development was informed that Lee Prevost had been laid off from Urban Matters. This was a huge shock to both Planning and Development and to Lee. In short, Urban Matters has decided to move away from working with affordable housing providers that are doing major development projects. It was explained to us that because affordable housing providers are grant reliant, the risk of working with the sector was too great. Urban Matters will likely still do some targeted work with not-for-profits, but not large-scale work. Sunnyhill was not the only organization affected by this sudden change. Lee was working with 11 different organizations across the country.
The change led to two months of negotiations and hard work for Urban Matters, Lee, Planning and Development, and the Board. We have now arrived at a solution: Urban Matters has hired Lee on contract to complete Phase 2 of the work plan for us. The Phase 2 Extension, Phase 3, and subsequent work will be conducted by Boundary Design, Lee’s private development company that he founded in 2001. The company has been on hiatus for the past seven years while Lee worked with the City of Calgary and Urban Matters. The good news is that we are ultimately dealing with just a change of name from Urban Matters to Boundary Design. We will still get to work with Lee and all the subcontractors (MODA, Altus, etc.) that Lee had been working with at Urban Matters.
Suffice it to say, it was nerve-wracking to see our work come to a sudden halt and sit largely idle for so long. But as of late last week, we are up and running again. Running we are! So much work to catch up on.
New Build Design
As a result of the slowdown, MODA has been in a bit of a holding pattern. They shared one-bedroom unit layouts that they made to simply test the square footages of one bedroom units. The design group will be able to workshop more detailed layout options in the future. Additionally, MODA ran a draft of the design permit drawings past Planning and Development, but there are some corrections that needed to be made and we are awaiting these.
Other pieces of work
In addition to the design work, Lee has now started tackling other elements of Phase 2 that have been sitting idle. This includes completing the site assessment (geotechnical work etc.), undertaking a land valuation for our negotiations with the City of Calgary, reviewing the affordable housing needs assessment for our area written by Urban Matters, and of course working through both capital budgets and operating scenarios. All of these will be fed into the ongoing negotiations with the City of Calgary.
City of Calgary Land Purchase Negotiations
As you may recall, Planning and Development submitted a letter to the City of Calgary in May 2020 to trigger clause 19.01 of our current lease that permits us to purchase the land at “fair market value”. As a result, the City of Calgary conducted an assessment of the land and responded that fair market value was $20 million dollars. Planning and Development anticipated a high valuation, but in conversations with Lee we don’t believe the value-to-use ratio for the land is accurate (many different factors indicate this). More importantly, the City can sell it to Sunnyhill for less and has consistently indicated that this is their intention. Our job will be working with the City to do so. This of course is an exercise in bureaucracy, but it also opens the door for us to formally begin negotiations. The purchase price that Sunnyhill is looking at is much closer to the “book value” of the land which, as we understand, is closer to $5.5 million dollars. Purchasing land at book value is a practice that the City of Calgary uses when selling property to not-for-profits through their Land Disbursement Strategy (LDS). This strategy sells land to not-for-profit organizations that meet a number of different criteria and more importantly through an open bid process. Sunnyhill meets all of the criteria for the LDS, but we simply cannot have the land be put out to an open bid process as it is possible another not-for-profit housing provider could purchase the land we currently live on. So attmpting to use the LDS as is won’t work for us.
What is the way forward? In addition to negotiating a land purchase price, Sunnyhill needs to navigate different levels of administration and seek to amend the LDS in order to allow not-for-profit organizations to purchase land currently occupied or used by not-for-profit organizations without an open bid process. This task should not be as daunting as it appears. Based on Lee’s experience working in the City of Calgary’s Affordable Housing Department and having helped to develop the Affordable Housing Strategy, we have a strong plan to make our case. In particular, Sunnyhill needs to argue its case in relation to the City of Calgary’s existing affordable housing offerings, situate ourselves within the affordable housing sector, emphasize Sunnyhill’s background and successful history, and of course speak to the financial analysis that indicates our capacity to grow and remain sustainable and affordable.
To facilitate this process, the Board and Planning and Development have struck a negotiating team to work with Lee. We will quote Richard Harrison’s recent letter to the co-op:
"Under the continued guidance of Lee Prevost, a negotiating team made up of myself, Eric Moschopedis from P&D, and Sherry Kozak, with Sarah Stephens from the Board and Bob Bott from P&D, will be helping to shape the narrative with which we will be approaching the City. Our backups are Mark Terrell, Phil Cox, and David Broadhead. The mandate is, as it has been from the start, to negotiate the purchase of the land at a price we can afford.”
Phase 2 extension and Phase 3
Phase 2 has been very successful thus far. We have seen the overall project move forward in leaps and bounds. However, there is still additional work to be completed. In particular, we need to evaluate the new build and retrofit schematics with greater scrutiny towards becoming net zero ready (NZR). NZR is a requirement of the Federation of Canadian Municipalities Green Municipal Fund, for which Sunnyhill was awarded $112,000. NRZ is a stricter standard than that of the CHMC funding programs and the targets we were seeking to hit when Phase 2 began. Ideally, we would have integrated some of this work more fully into the design phase of the new building, but confirmation of the funding came late in the process. That said, MODA did design the building with an eye towards NZR, and it just needs to be looked at by a specialist. Of the $112,000 awarded, $16,000 is allocated to pay for a sustainability consultant to work with MODA to ensure the new build and existing townhouses meet the necessary requirements.
Phase 2 will seamlessly merge with Phase 3 and will see Boundary Design (Lee’s company) produce final recommendations for us. Planning and Development is expecting to receive a fully costed Phase 2 extension and Phase 3 proposal in the coming days. We will bring this to membership for approval shortly after.