Submitted by Philip Cox, on behalf of the Planning and Development Committee.
Based on the membership’s “go-ahead” decision at the October 3rd General Meeting (see box below), our applications to CMHC and CFM for the green retrofit of existing buildings and for the 15-unit rebuild are assembled and ready to submit to funders for the development phase and construction. The snag we continue to face is with the City of Calgary over our tenure on the land after the 2039 end-date on our current lease.
On the surface, little has changed after many months of discussion with the City. Up close, there are openings and glimmers of hope.
Last year, the City placed a value on the Sunnyhill site that made a land purchase unattainable. We shifted gears and began discussing a lease scenario. Late in the year, the City’s Real Estate and Development Services (REDS) indicated that a commercial land lease would amount to just over $1 million a year. This figure has subsequently been lowered, factoring in recent precedents in discounting for affordability as well as information that Sunnyhill provided. The discounted lease rate that emerged earlier this year narrowed the price gap for Sunnyhill but not by nearly enough, given what we can afford.
So where do we see those glimmers of hope?
Our consultant, Lee, is completely on top of the issues we face with the City; his out-of-the-box thinking and sensitive stewardship are truly awesome
Since the beginning of the year, we have been working with REDS senior staff who are demonstrating commitment to the file and a desire to find a mutually satisfactory solution; we meet every three weeks
The REDS team is encouraging us to be creative in developing a formula and background argument for consideration
There are multiple variables bearing consideration, including: the affordability thresholds used in the City’s calculations; the number of units to be considered “affordable”; the formula used to determine the discount on the lease value, and the “in-kind” value of non-cash commitments that might be inserted in the calculation.
Our challenge over the next couple of months is to refine our pro-forma calculations, make the case for a revision to the City’s own lease formulation, and build an overarching presentation that makes a compelling case for Sunnyhill to provide affordable housing options well beyond 2039. The final decision will belong to City Council, but the backing of City Administration is a critical first step.
Planning and Development remains focused on being ready to start the work in 2023, at least for the retrofit component of the project. As you can appreciate, a lot of steps and permissions stand between now and that green light. Watch this space for updates as we continue to navigate with the City and our funding partners. We will fully brief the membership when there are substantive developments or proposals to consider.
Motion presented to the Sunnyhill Membership, 3rd October 2021
The Planning and Development Committee moves that SHC approves submitting applications to CMHC and FCM for the capital funding phase of the redevelopment project, which will include design development, construction, and warranty. The applications would be based on pro-forma projections prepared by Boundary Design and the Altus Group that achieve a minimum debt service cover ratio of 1.10 which means that Sunnyhill can pay off all of our debt and operating costs and still have 10% of our income remaining for future needs and development.
Moved/seconded/carried unanimously
The merits of the housing cooperative model are not understood. It is one reason why our conversation with the City is taking so long. See this from the CBC: https://www.cbc.ca/news/canada/co-op-housing-affordability-1.6374412