Unforeseen drainage issues on the site of Canmore’s newest affordable rental project have resulted in $600,000 in added costs.
But with financing already in place, Canmore Community Housing Corporation asked council to provide the unanticipated amount with a loan.
In a letter to council, CCHC chair Joanna McCallum made the loan request to allow completion of the 48 unit stacked townhouse project on Dyrgas Lane, which is 100 Perpetually Affordable Housing (PAH) rental units.
“The total construction for McArthur Place is now $10 million,” McCallum said. “At completion of the McArthur Lane project, the appraised valuation for both phase one and two will be $12.5 million with a lifespan of 65 years. The average price per unit is approximately $209,000, with a projected square footage cost of $250.91 per unit.
“The board is asking council to consider granting a five-year loan (with interest) to be repaid at the end of year five.”
Manager of financial services Katherine Van Keimpema recommended granting the loan with a simple interest of two per cent per annum. Interest would amount to $60,000 and Van Keimpema said it would be paid in full, along with the entire loan, when CCHC refinances its mortgage with Bow Valley Credit Union in five years.
The cause of the cost increase for the project, she told council, was a drainage issue between the two phases of the development. When phase two was undertaken immediately after phase one because of beneficial pricing CCHC received from the builder, it was discovered that site drained onto phase one.
Van Keimpema said discovering the issue during construction meant that it was addressed early. She said if it had been discovered at a future date, mitigation would likely have cost more.
“I am pleased to support this motion,” said Councillor Sean Krausert. “I think it is a good solution to unanticipated costs and I am excited for the new units coming online in 2016.
“I think it will have an impact on our housing situation.”
