Canmore Community Housing Corporation is taking out a bank loan to help pay for its next perpetually affordable housing rental housing project in Three Sisters.
Executive director Jennifer Bisley said CCHC has secured financing of $4.1 million from the Bow Valley Credit Union.
“That was based on the maximum amount of debt financing we could service with rental revenues,” she told council earlier this month. “The balance would come from the perpetually affordable housing reserve fund.
“This is something new for us to go to a lender.”
Council voted to approve CCHC taking $1.7 million out of the reserve and was told the credit union has also asked the Town to provide a 25 per cent loan guarantee for the duration of construction.
However, both the debt and loan guarantee requires a bylaw be passed along with required advertising and appeal period according to manager of finance Katherine Van Keimpema.
“I can bring second and third reading before Christmas, but legally we have to wait another thirty days for the opportunity to appeal to the Court of Queen’s Bench,” Van Keimpema said.
The tricky part, she said, is that the bid price of the selected construction company expires on Nov. 14 and the earliest administration will be able to 100 per cent guarantee the loan is Jan. 15.
“We are working with Bow Valley Credit Union and the underwriter to accept that we are pursuing the bylaw,” Van Keimpema said. “We have had a positive response so far.”
The project was put out to tender in the fall for a design-build bid process and Kellerdenali Construction was the successful bid at $5.4 million. Bisley said Bob Ellard with Ellard Design Group has been working as the project manager and BRZ Partnership Architecture Inc. as lead architect helped put together the tender package.
“We are pleased it was a competitive process with seven submissions received and after doing our due diligence, CCHC selected Kellerdenali,” Bisley said.
The project has two phases with the first scheduled to develop 40 per cent of the 1.4-hectare site and 16 units of the 32-unit total with a mix of one, two and three bedrooms. The units range in size from 690 square feet to 1,012 square feet with rents being estimated at this time between $875 and $1,350.
The total cost of the project is actually $6.2 million, said Bisley, as it includes costs incurred to date and there is also a 10 per cent contingency included. It does not, however, include the cost of land. CCHC has used $443,000 from its capital reserve fund to finance the work done so far.
Van Keimpema said debt CCHC will take on also counts towards the municipality’s legislated debt limits under the Municipal Government Act. She said council will be asked to consider preparing unconsolidated financial statements as opposed to the consolidated ones is has historically prepared to avoid that situation.
Mayor John Borrowman said he was happy to approve the reserve funds going to the project.
“This is exactly what the reserve fund was created for in the first place,” he said. “I am really happy to see a project started again; it has been too long since we have had shovels in the ground for an affordable housing project.”
