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2. ACTION OTTAWA 2008 – 424 METCALFE STREET ACTION OTTAWA 2008
– 424, RUE METCALFE |
Committee Recommendation
That Council, in accordance with the provisions of the Action Ottawa program,
approve t1. hat
the Director of Housing request the Minister of Municipal Affairs and Housing, under the terms of the Canada-Ontario
New Affordable Housing Program 2003, Rental and Supportive Component, to
provide before the end of 2008 an additional $4.6
M to Phase I of the Centretown Citizens Ottawa Corporation (CCOC) Beaver
Barracks development at 424 Metcalfe Street to offset increased project
development costs since the original approval of the Project so as to allow the
Project to proceed.
Recommandation du Comité
Que le
Conseil approuve conformément aux clauses du
programme Action Ottawa, que le directeur du Logement recommande au ministre
des Affaires municipales et du Logement, en vertu des conditions du Programme
Canada-Ontario de logement abordable, d’allouer 4,6 M$ supplémentaires à la
Phase I de l’aménagement de la caserne Beaver par la Centretown Citizens Ottawa
Corporation (CCOC) au 424, rue Metcalfe pour compenser l’augmentation des coûts
d’aménagement du projet depuis l’approbation initiale de ce dernier afin
d’assurer la poursuite du projet.
Documentation
1. Deputy
City Manager's report, City Operations, dated 6 November 2008
(ACS2008-COS-HOU-0017).
Report
to/Rapport au :
Community
and Protective Services Committee
Comité des services communautaires et de
protection
and Council / et au Conseil
6 November 2008 / le 6 novembre 2008
Steve
Kanellakos, Deputy City Manager / Directeur municipal adjoint
City Operations
/ Opérations municipalesSubmitted by/Soumis par: Steve Kanellakos, Deputy
City Manager/Directeur municipal adjoint,
Community
and Protective Services/Services communautaires et de protection
Contact
Person/Personne ressource : Russell Mawby, Director
Housing/Logement
(613) 580-2424 x 44162,
russell.mawby@ottawa.ca
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Ref N°:
ACS2008-COS-HOU-0017 |
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SUBJECT: |
ACTION OTTAWA 2008 – 424 Metcalfe Street
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OBJET : |
Action
Ottawa 2008 – 424,
rue Metcalfe
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REPORT
RECOMMENDATION
That Community and Protective Services Committee recommend that
Council, in accordance with the provisions of the Action Ottawa program, approve
t1. hat
the Director of Housing request the Minister of Municipal Affairs and Housing, under the terms of the Canada-Ontario
New Affordable Housing Program 2003, Rental and Supportive Component, to
provide before the end of 2008 an additional $4.6
M to Phase I of the Centretown Citizens Ottawa Corporation (CCOC) Beaver
Barracks development at 424 Metcalfe Street to offset increased project
development costs since the original approval of the Project so as to allow the
Project to proceed.
RECOMMANDATION DU
RAPPORT
Que le
Comité des services communautaires et de protection recommande au Conseil
d’approuver, conformément aux clauses du programme Action Ottawa, que le
directeur du Logement recommande au ministre des Affaires municipales et du
Logement, en vertu des conditions du Programme Canada-Ontario de logement
abordable, d’allouer 4,6 M$ supplémentaires à la Phase I de l’aménagement de la
caserne Beaver par la Centretown Citizens Ottawa Corporation (CCOC) au 424, rue
Metcalfe pour compenser l’augmentation des coûts d’aménagement du projet depuis
l’approbation initiale de ce dernier afin d’assurer la poursuite du projet.
This report addresses Motion no. 43/2 that was carried at City Council
on September 24, 2008 wherein Corporate Services and Economic Development
Committee Report 30, Item 5, was deferred to the City Council meeting on
November 26, 2008 to allow time for the developer, Centretown Citizens Ottawa
Corporation (CCOC), to finalize site and construction issues for the project at
424 Metcalfe Street before taking over ownership of the land from the City.
CCOC’s
original proposal for Phase I of Beaver Barracks was to build a 195-unit
project with 100 units of funding. Since the project was awarded, construction
costs have increased at a rate beyond typical levels, particularly with respect
to concrete, fuel, steel, site remediation and financing costs. Due to these cost increases and site design
issues, CCOC will only be able to build 160 units in Phase 1 using the current
funding allocation of 100 units, and will have to delay or remove the
implementation of some of their amenity, energy efficiency and sustainable
design features. Given that the
City has unallocated AHP funding available, the Housing Branch is requesting
that Council request that the Minister of Municipal Affairs and Housing provide
the Beaver Barracks project with an additional $4.6 million in funding to fully fund 60 units
being provided over and above the 100 units originally funded in Phase 1, based on
providing an average of $70,000 per unit per the AHP program guidelines.
Staff have consulted with the
Minister of Municipal Affairs and Housing and the Minister is supportive of the
City’s request for additional funding in the amount of $4.6 million from the Canada-Ontario
New Affordable Housing Program 2003, Rental and Supportive Component.
DISCUSSION
In May 2007, the
City of Ottawa issued a call for proposals to develop low-income affordable
housing at 424 Metcalfe Street. The RFP
offered the land, development incentives, up to $3.0 million of City capital
funding and up to $7.0 million of funding from the Canada-Ontario New
Affordable Housing Program 2003, Rental and Supportive Component (the “AHP”). Thise AHP funding was new money provided
by the Province for development of brownfields sites. The City requested this funding in 2006, and received 100 units
out of a total of 300 from the Province.
The Beaver Barracks site clearly qualifies as a brownfields site, and
thus all $7.0 million of the AHP brownfields funding Ottawa received was
allocated to the RFP for that site.
Centretown Citizens Ottawa Corporation (CCOC) was the successful proponent, based on a
proposal to build 195 units of housing.
As part of the selection process, the Housing Branch retained KPMG to
provide financial and cost analysis of all proponent submissions and
specifically to review and comment on the capital and operating budget of the
project. CCOC’s capital and operating budgets were found to be reasonable and
construction costs reflected the industry standard.
Since the project
was awarded, project
development construction costs have increased at a
rate beyond typical levels, particularly with respect to concrete, fuel, steel,
site remediation as well as financing costs.
Due to these cost
increases and site design issues, CCOC will only be able to build 160 units in
Phase 1 using the current funding allocation of 100 units, and will have to
delay or remove the implementation of some of their amenity, energy efficiency
and sustainable design features.
Unlike typical residential
development, the Affordable Housing Program places a cap on the maximum unit
rent participating projects can charge.
Thus, the developer or building owner has no ability to cover cost pressures
by adjusting their operating revenues through such means as raising rents,
selling units like in a condominium, or targeting more affluent buyers or
renters. In addition, in May 2008 the Ministry of Municipal
Affairs and Housing terminated its contracts with the Ontario Mortgage Housing Initiative (OMHI) Qualified Lenders (i.e. MCAP
Financial Services and TD Bank) which financing
specifically for AHP projects and with interest rates approximately 1-2% lower
than comparable rates. Since the
termination of the OMHI the Housing Branch has been working closely with CCOC
to optimize various elements of the project and budget, including discussions
with Infrastructure Ontario to secure better financing terms for the project
than can be provided from typical private sector financial institutions.
With respect to the overall
goals of the Affordable Housing Program, the City of Ottawa still has an
allocation of approximately $4.6M from the Canada-Ontario New Affordable
Housing Program 2003, Rental and Supportive Component that must be dedicated to an affordable
housing project by the end of 2008 or the funding will be lost. The Housing
Branch had attempted to allocate the remainder of these funds, which totalled
approximately $14.7M in June 2008 to meet the
Affordable Housing Program timelines but was only able to allocate proposals
totalling approximately $10.1M because the City did not have any available land
or funds to top up Federal – Provincial capital for new construction as we did
in the past. Schedule A provides an update of the AHP program funding since
2005 and how that funding has been or will be allocated.
With respect to site remediation, on July 11, 2007 City
Council approved a recommendation of the CPSC “That up to $300,000.00 be
provided from the Social Housing Reserve for the environmental clean-up cost of
the 424 Metcalfe site.” This cost
was based on a Phase II Environmental Assessment commissioned by the City that
revealed the presence of subsurface demolition materials that needed to be
removed and disposed off-site. The cost to remove these materials soils was
estimated to be $300,000.00. The CPSC Report that was presented to Council on
July 11, 2007 indicated that the Housing Branch would apply to the Federation
of Canadian Municipalities Green Municipal Fund for assistance of up to 50% of
the $300,000.00 cost for
site remediationto clean up the site. The Housing
Branch’s application for the said funding was not successful. In addition, the
construction plans now involve more extensive excavation than what was
originally anticipated and the total estimated cost to dispose the subsurface materials clean up the
site is now $1,070,000,
which includes contingency for any materials disposal related to Phase 2
development of this project. The
request to the Minister of Municipal Affairs and Housing for an additional $4.6 million of AHP funding of $4.2 million will address all construction cost
increases including the
additional costs includes the
new estimate of $600,000 for subsurface materials disposal. the current
environmental clean-up cost of the 424 Metcalfe site.
Phase II, which
includes an additional 87 units of housing on the location of the Catherine
Street paramedic post is not included in this initial phase and will only
proceed once the Metcalfe – Catherine Street building in Phase I is ready for
occupancy. However, the additional AHP funding will
allow a contingency fund for any possible materials disposal from that part
of the development site.
In summary,
CCOC has tried to build a 195-unit project with 100 units of funding, but has run into significant
and unforeseen costs
related to materials, construction and site development. Given that the City has
unallocated AHP funding available, the Housing Branch is requesting that Council
request the Minister of Municipal Affairs and Housing to provide the Beaver
Barracks project with
an additional $4.6
million in AHP funding to fully fund the 60 units being provided over and above
the 100 units originally funded in Phase 1., based on providing an average of $70,000 per unit
per the AHP program guidelines.
Staff have consulted with CCOC and the Ministry and this proposal is supported, subject to Council approval.
Table 1, below, shows the total project funding and total project cost, including the additional AHP funding proposed in this report.
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Beaver
Barracks |
No. Units |
Total Fed/Prov Funding |
Total City Funding |
Total Public Funding |
Total Project Cost (Est.) |
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Phase 1
Brownfields |
100 |
$
7,540 |
$
10,726 |
$
18,266 |
$
35,076 |
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Phase 1
AHP funding 2008 |
60 |
$
4,600 |
$ - |
$
4,600 |
$ - |
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Phase 2 |
87 |
$
6,090 |
$
2,873 |
$
8,963 |
$
15,920 |
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Total |
247 |
$
18,230 |
$
13,599 |
$
31,829 |
$
50,996 |
FINANCIAL IMPLICATIONS
There are no direct financial implications to the City, as the additional $4.6M is requested from the Province and is provided directly to CCOC.
SUPPORTING DOCUMENTATION
Schedule A: Affordable
Housing Program Funding Summary (2005-2008)
DISPOSITION
Housing Branch will notify the
Province of the recommended housing projects approved by Council. Upon receiving Provincial approval, the
Housing Branch will inform proponents that they may proceed with development.
Housing Branch staff will work to
ensure timely implementation of all necessary funding agreements.
Schedule A: AFFORDABLE HOUSING PROGRAM FUNDING- RENTAL AND SUPPORTIVE and
BROWNFIELDS PROGRAMS ($ 000’s)
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Project Name |
Status |
No.
Units |
Federal
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Provincial |
Total
Fed/Prov Funding |
City
Capital |
City
Fees |
City
Land and Incentives |
Total
City Funding |
Total
Public Funding |
Total
Project Cost |
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COMMUNITY RENTAL HOUSING PROGRAM |
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2004 CRHP |
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Blue Heron Co-op |
Occupied |
271 |
$
6,775 |
$
1,084 |
$
7,859 |
$
3,024 |
$
309 |
$
3,352 |
$
6,685 |
$
14,544 |
$
35,680 |
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John Howard |
Occupied |
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Nepean - Meridian |
Occupied |
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OCHC - Hartman's |
Occupied |
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Ottawa Salus - Athlone |
Occupied |
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AFFORDABLE HOUSING PROGRAM -
RENTAL AND SUPPORTIVE and BROWNFIELDS PROGRAMS |
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Total Allocation |
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495 |
$
16,760 |
$
17,840 |
$
34,600 |
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2005 Strong Start |
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Clarence View |
Occupied |
139 |
$ 3,336 |
$
5,004 |
$
8,340 |
$
4,170 |
$
295 |
$
827 |
$
5,292 |
$
13,632 |
$
23,396 |
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MHI |
Occupied |
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Gloucester |
Occupied |
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McLean |
Occupied |
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2006 AHP and BROWNFIELDS |
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Beaver Barracks Ph 1 Brownfields |
Devel |
201 |
$
8,556 |
$
6,454 |
$
15,010 |
$
4,230 |
$
1,083 |
$
7,439 |
$
12,752 |
$
27,762 |
$
37,972 |
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Wigwamen |
Approved |
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2008 AHP I |
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Tompkins |
Devel |
16 |
$ 426 |
$ 694 |
$ 1,120 |
$ 480 |
$ 57 |
$ 486 |
$ 1,023 |
$ 2,143
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$ 2,144 |
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2008 AHP II |
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Beaver Barracks Phase 2 |
Approved |
140 |
$
3,923 |
$
6,207 |
$ 10,030 |
$
320 |
$
328 |
$
2,823 |
$
3,471 |
$ 13,601 |
$
24,400 |
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Live Work Play |
Approved |
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Multifaith Housing Blake St. |
Approved |
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Dovercourt Co-op |
Approved |
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Safe Housing Ottawa |
Approved |
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TOTAL AHP |
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496 |
$
16,241 |
$
18,359 |
$
34,600 |
$
9,200 |
$
1,763 |
$
11,575 |
$
22,538 |
$
57,138 |
$
87,912 |
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Total All Programs |
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767 |
$ 23,016 |
$ 19,443 |
$ 42,459 |
$ 12,224 |
$ 2,072 |
$ 14,927 |
$ 29,223 |
$ 71,682 |
$ 123,592 |
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